Legislature(2021 - 2022)BUTROVICH 205
02/02/2021 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB43 | |
| SB25 | |
| SB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 43 | TELECONFERENCED | |
| *+ | SB 25 | TELECONFERENCED | |
| += | SB 39 | TELECONFERENCED | |
SB 25-STATE GOV'T FINANCES: WEBSITE
3:59:47 PM
CHAIR SHOWER announced the consideration of SENATE BILL NO. 25
"An Act relating to the establishment and maintenance of an
Internet website providing information on state government
financial transactions and specifying the information to be made
available on the website."
4:00:04 PM
SENATOR BILL WIELECHOWSKI, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 25, stated this legislation will create a
publicly searchable online checkbook for state government
expenditures and revenues. He highlighted that the Department of
Administration took down the online checkbook last spring, which
made Alaska the only state in the nation that does not have one.
Before that, the online checkbook was extremely slow, not easily
searchable, and not intuitive. That led to Alaska receiving an F
from a number of groups that monitor access to government
information. A report in the supporting documents from the
United States Public Interest Research Group (USPIRG) rated
Alaska's financial transparency an F in five out of the last six
years. At the last rating, Alaska was ranked 49th out of the 50
states in terms of public access to the state's financial
information.
4:01:58 PM
SENATOR WIELECHOWSKI said SB 25 would be easy to implement
because the state already collects the financial information. It
is just a matter of somebody spending a few hours to put a
publicly searchable website together and regularly update the
information. He noted that a wide range of people with diverse
political ideologies, including Grover Norquist and Ralph Nader,
supported nearly identical bills that he introduced in previous
years.
In 2009, Senate Bill 2 passed the Senate but died in the House
because the then governor said it was not needed. Senator
Wielechowski said he also introduced Senate Bill 180 in 2020 but
the bill did not pass because of a shortened session due to
COVID-19.
SENATOR WIELECHOWSKI said the argument against SB 25 is that it
would be expensive. He pointed out that last year his staff
developed an online checkbook for the state in one day and at
zero cost. It did not have all the bells and whistles that an IT
department could provide, but it shows it could be done with
little cost.
SENATOR WIELECHOWSKI said the second argument is that the bill
is not needed because the state will construct and post the
website. However, the state has not had an online checkbook
since last spring and the previous one received an F rating in
five of the last six years.
SENATOR WIELECHOWSKI said SB 25 is a good government bill
because transparency in government is not an ideological issue.
People from both sides of the aisle have voiced support. The
bill would also save money by reducing the number of Freedom of
Information Act requests for information that the public could
easily access if it were in the online checkbook. Contractors
and the business community have said this would give them the
opportunity to see what the state is spending on items and
contract, which would allow them to price and come up with
better terms to save the state money.
SENATOR WIELECHOWSKI restated that SB 25 is a good government
bill that gives Alaskans a better opportunity to understand
where revenues are coming from and expenditures are going.
4:05:31 PM
SENATOR REINBOLD said she would probably become a co-sponsor and
may offer an amendment to add grading the administration on
freedom of information requests.
CHAIR SHOWER suggested she work it out with the sponsor.
SENATOR KAWASAKI, noting that the Palin administration created
the online checkbook by executive order, asked if this
administration took it offline because of associated costs.
SENATOR WIELECHOWSKI said he could not speak to why the
administration took the website down.
4:09:49 PM
NATE GRAHAM, Staff, Senator Bill Wielechowski, Alaska State
Legislature, Juneau, Alaska, presented the following sectional
analysis for SB 25 on behalf of the sponsor: [Original
punctuation provided.]
Section 1
Names the act "the Alaska Online Checkbook Act."
Section 2
Adopts legislative findings and intent:
Subsection (a) establishes that this bill is intended
to allow people identify and discover state revenue
and expenditures.
Subsection (b) requires that this act by interpreted
in favor of disclosure and transparency.
Subsection (c) finds that state revenue and
expenditures must be accounted for and easily
accessible to the public in order to maintain a fair
and open government.
Subsection (d) adopts intent that the state should
strive to create a user-friendly website that gives
the public access to the state's financial information
in a centralized location.
Section 3
Requires that the Department of Administration to make
the financial transactions of the state and the annual
audit available electronically for use in the public
finance internet website.
4:11:00 PM
Section 4
Creates a new AS 37.05.215.
AS 37.05.215 (a) Requires the Department of
Administration to develop operate and maintain a
searchable, free to the public, website that provides
financial information available from the central
accounting system or the annual financial report.
AS 37.05.215 (a) (1)-(3) Requires the following
information and transactions to be posted on the
online check book website and monthly state income
including:
• Receipts or deposits by a state agency into a
fund or account established within the state
treasury.
• Proceeds from taxes received, categorized by
source type, including compulsory contributions
imposed by the state for the purpose of financing
services.
• Agency earnings including amounts collected for
sales or services, licenses or permits issued, or
otherwise received by an agency.
• Revenue received for the use of state money or
property including interest and lease payments
gifts, donations and federal receipts and other
revenue.
Expenditures including:
• The names and locations of any persons to whom
payment was made.
• The amounts of the expenditures disbursed.
• The type of transaction, by account code,
including the purpose of the expenditure.
• Other information specified by the department.
The balance of the following state accounts:
• Statutory Budget Reserve.
• Constitutional Budget Reserve.
• Permanent Fund Earnings Reserve Account.
4:12:30 PM
CHAIR SHOWER asked if that was an all-inclusive list.
MR. GRAHAM replied those accounts are all one might want to be
included but it is not exclusive.
CHAIR SHOWER asked if it would be a fair statement to say,
"There could be more they may put in this or things that are out
there now, for example what they're working on that might be
rolled in."
MR. GRAHAM answered yes.
SENATOR REINBOLD voiced support for more detail, including fund
sources.
CHAIR SHOWER said he leans toward more rather than less
specifics.
SENATOR WIELECHOWSKI said his preference is to make it as
specific and thus transparent as possible without triggering a
large fiscal note.
4:15:27 PM
MR. GRAHAM continued the sectional analysis.
AS 37.05.215 (a) (4)-(7) Requires the following
information be posted on the online check book website
and updated monthly:
The amount deposited into the Permanent Fund from all
mineral lease rentals, royalties, royalty sale
proceeds, federal mineral revenue sharing payments,
and bonuses received by the state.
State revenue and expenditures, summarized by:
General fund revenue sources categorized by function,
department, and account. Total general fund income
compared to expenditures.
Total assets compared to liabilities at the end of the
fiscal year. For the preceding 10 years, by fiscal
year the following:
• The number of state employees by department.
• The number of independent contractors engaged by
the state by department.
• The total long-term debt owed by the state.
• Total general fund expenditures.
• All general fund payroll by department.
AS 37.05.215 (b) Describes the reporting
requirements for the previous subsection.
AS 37.05.215 (c)(1) Requires that the website have
reference materials to assist the public in
understanding the financial [information] provided on
the website.
AS 37.05.215 (c)(2) Requires the website to have a
feature that allows users to search for information on
the website by keyword and recipient.
AS 37.05.215 (c)(3) Requires the site to have a link
to the website of the Legislative Audit Division. The
site must also include electronic copies of
information related to state service procurement
contracts, including compensation and contract length
and of information related to independent contractors
engaged by the state, by state agency, including
compensation and contract length.
4:17:08 PM
AS 37.05.215 (d) Requires the Department of Revenue
and other state agencies that use the central
accounting system to provide information to the
Department of Administration that is necessary to
comply with this act.
AS 37.05.215 (e) Clarifies that this bill will not
require the disclosure of information that is
confidential under state or federal law and requires
that aggregated information be disclosed if it can
properly protect confidentiality.
AS 37.05.215 (f) Defines "expenditure," "searchable
Internet website," and "state agency."
Section 5
Requires the website to be operating on or before October
1, 2022.
Section 6
Requires information from the previous fiscal year be on
the website by October 1, 2023 and requires site to be
updated.
4:17:54 PM
SENATOR REINBOLD stated that October 2022 is not acceptable.
SENATOR WIELECHOWSKI said he was trying to give the
administration as much time as necessary, but his preference
would be to have it effective tomorrow if that were possible.
SENATOR KAWASAKI asked if the university and court system
already account for this information.
MR. GRAHAM answered yes, but not in an online checkbook. SB 25
would require both the university and the court to make their
nonconfidential information public.
SENATOR KAWASAKI referenced the $400,000 in capital costs in the
Department of Administration's fiscal note and asked Mr. Zigmund
to elaborate on what the money is for, given that a previous
administration implemented the checkbook by executive order and
the cost was zero.
4:20:21 PM
HANS ZIGMUND, Director, Division of Finance, Department of
Administration, Juneau, Alaska, stated that increasing
transparency in public finance is a worthy goal. He advised that
the Department of Administration traditionally has provided the
state's online checkbook with reports from the Alaska Data
Enterprise Reporting System (ALDER) that provide transparent
reporting of nonconfidential state expenditures. The checkbook
reported on what the state purchased, from whom, and what it
cost, but it was not the full state balance sheet.
MR. ZIGMUND explained that in April 2020, the Division of
Finance took the state checkbook offline after a report of an
unusually large expenditure to a legislator that raised red
flags. Investigation showed that fields were misaligned and data
was not translating correctly.
MR. ZIGMUND said the expectation is that the online checkbook
will be back online on February 5. The solution was to create a
new ALDER report that assembles end-product data without any
human intervention or manipulation. The division currently is
analyzing the data to ensure that the checkbook data matches
expected results and complies with statutes and regulations.
This includes not sharing inappropriate or confidential
information like child welfare payments and victim restitution.
4:22:34 PM
MR. ZIGMUND reported that it took about eight months to fix
problems associated with the implementation of the CARES Act,
prepare the annual comprehensive financial report, and plan for
the beginning of the Integrated Resource Information System
(IRIS) upgrade. The initial root cause analysis took about 300
staff hours to get to the point of republishing the checkbook.
MR. ZIGMUND advised that the online checkbook is substantially
different from the one outlined in SB 25. The bill includes
reporting of liabilities, revenues, long-term debt for the
state, and information that is published internally but not in
the online checkbook. The bill requires revenues from the
preceding month, balances from the preceding month from the
statutory budget reserve, constitutional budget reserve, and
permanent fund earnings reserve account. It requires information
on full time, part time, and temporary employees, independent
contractors, general revenues and expenditures categorized by
function, agency, and account. Reporting requirements are
expanded to include public corporations and the universities.
He explained that the fiscal note estimates that it will take
about eight months and $400,000 to implement the new checkbook.
It would be a capital expenditure to employ contractors to build
the new website. Should the bill pass, implementation could
occur once the IRIS upgrade is completed, starting in April 2022
and the go-live date would be October 2023.
MR. ZIGMUND stated that the division and department have no
position on the bill but would implement the legislature's
policy decision. He explained that the estimated time and cost
to implement the bill stem from conversations with the vendor
for IRIS.
CHAIR SHOWER commented that it takes a lot of time and money
when government doesn't want to do something, but it can
accomplish amazing feats when it wants to. He pointed out that
in August of 1990, during Desert Storm and Desert Shield, the
government moved the equivalent of every part of a medium sized
Midwest town halfway around the world and back again, all in a
couple months. He said he doesn't believe the department is
stonewalling but he agrees with other committee members that it
can move faster if there is a will.
CHAIR SHOWER asked, aside from the confidentiality protections
and university reporting that Mr. Graham mentioned, if there
were any legal requirements or obstacles with the bill as
written.
MR. ZIGMUND replied he would defer any questions regarding
confidentiality and reporting of revenues to the Department of
Revenue. With respect to university and public corporations, he
said their information is not in IRIS so DOA would not be able
to include that information in reports and provide the
information in the online checkbook.
CHAIR SHOWER asked how finishing the IRIS update was relevant to
constructing and posting the online checkbook outlined in SB 25.
4:28:49 PM
MR. ZIGMUND explained that IRIS is the financial, procurement,
payroll, and human resource management system where all the
state's accounting takes place. ALDER is a reporting tool that
pulls from the data warehouse where all the information is
stored from the transactions that take place in IRIS. The
request to delay implementation until after the IRIS upgrade is
based on resource constraints because the department's
programmers, business analysists, and database administrators
will be working round the clock for the next year to complete
the IRIS upgrade. He emphasized the need for the department to
finish the IRIS upgrade so the foundation of the information
that rolls into the online checkbook is complete and correct
first.
4:31:14 PM
SENATOR WIELECHOWSKI agreed with the chair that if DOA put its
mind to it, they could get it done. He noted that the department
used the same argument against the original legislation in 2008-
2009. He questioned the reason DOA sees the need to hire an
outside contractor to develop an online checkbook and why it
would take so long. "I'm deeply skeptical Mr. Chairman of the
comments and statements I'm hearing."
4:32:17 PM
SENATOR REINBOLD said she too questions the need to hire outside
contractors. She asked if fund source codes would be included
when DOA reposts the online checkbook on February 5.
MR. ZIGMUND answered no; that enhancement would not be available
February 5. DOA's intention on the 5th is to restore the
information that the Division of Finance previously provided. He
said adding fund source codes could be a future enhancemen.t He
said he imagines she is looking at linking funding sources to
the source of the expenditure, which should not be too
difficult. He said he would consult with programing staff and
follow up if that was incorrect.
4:34:08 PM
SENATOR REINBOLD said fund source codes are elementary
bookkeeping and not having them in the online checkbook makes it
difficult to do budget subcommittee work. She said she would
like to work with the sponsor and the administration on this
issue.
SENATOR KAWASAKI asked if the fiscal note would be zero if the
online checkbook did not have the enhancements mentioned
earlier. Rather, it would include general fund revenue sources
categorized by function, state agency, and account, and then
general fund revenue versus expenditure.
MR. ZIGMUND confirmed that reducing the technical work makes it
an easier lift for the department and reduces the cost.
SENATOR KAWASAKI said he would like to tease out the analysis of
the fiscal note to understand what is driving the $400,000 cost
estimate and eight-month timeline. He offered to do this
offline.
MR. ZIGMUND said he would be happy to have those discussions.
CHAIR SHOWER asked the members to submit their questions to his
office so they could be answered before the bill moves to
Finance. He restated his belief that a tighter timeline made
sense.
4:40:05 PM
CHAIR SHOWER held SB 25 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 43 Sectional Analysis.pdf |
SSTA 2/2/2021 3:30:00 PM |
SB 43 |
| 3 SB 25 Sponsor Statement.pdf |
SFIN 4/20/2021 9:00:00 AM SSTA 2/2/2021 3:30:00 PM |
SB 25 |
| 4 SB 25 Sectional.pdf |
SSTA 2/2/2021 3:30:00 PM |
SB 25 |
| 5 SB 25 Supporting Doc 1 Follow the Money 2018 Report.pdf |
SFIN 4/20/2021 9:00:00 AM SSTA 2/2/2021 3:30:00 PM |
SB 25 |
| 6 SB 25 Supporting Doc 2 Historical 10-19 Reports Follow The Money.pdf |
SFIN 4/20/2021 9:00:00 AM SSTA 2/2/2021 3:30:00 PM |
SB 25 |
| 7 SB 25 Supporting Doc 3 Online Checkbook Examples.pdf |
SFIN 4/20/2021 9:00:00 AM SSTA 2/2/2021 3:30:00 PM |
SB 25 |
| 2 SB 25 Ver.A.PDF |
SSTA 2/2/2021 3:30:00 PM |
SB 25 |
| ppt Presentation to Sen State Affairs Committee.pdf |
SSTA 2/2/2021 3:30:00 PM |
SB 25 |
| Agenda SSTA 2.1.2021.pdf |
SSTA 2/2/2021 3:30:00 PM |
|
| SB 43 Explanation of Changes from Version B to I.pdf |
SSTA 2/2/2021 3:30:00 PM |
SB 43 |
| SB 43 CS Bill.pdf |
SSTA 2/2/2021 3:30:00 PM |
SB 43 |
| SB 43 Fiscal Note 70.pdf |
SSTA 2/2/2021 3:30:00 PM |
SB 43 |
| SB 43 Research Ballot Measure 2.pdf |
SSTA 2/2/2021 3:30:00 PM |
SB 43 |