Legislature(2015 - 2016)BUTROVICH 205
02/18/2016 08:30 AM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB171 | |
| SB91 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 171 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 91 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SB 171-DOA PAYMENTS; REPEAL OTHER DOA DUTIES
8:33:27 AM
CHAIR STOLTZE announced the consideration of SB 171.
8:33:55 AM
JOHN BOUCHER, Deputy Commissioner, Alaska Department of
Administration (DOA), Juneau, Alaska, introduced SB 171 stating
the following:
The genesis of this bill essentially was an
examination of the statutes covering the department
and during the course of last summer and we found
certain statutes that we thought it was appropriate to
either repeal or amend, simply due to the evolution of
processes as they've occurred in the department right
now. We've identified essentially five or six things
that we'd like to address in that process. SB 171 was
essentially an act relating to the duties of the
department in relating to how we handle certain
administrative functions.
8:36:43 AM
SCOT AREHART, Director, Division of Finance, Alaska Department
of Administration (DOA), Juneau, Alaska, provided a sectional
analysis of SB 171 as follows:
Section 1, it is a change to the way judgements are
routed through the state. Judgements come in and
currently they go through the Department of
Administration which then get routed over to the
Department of Law, who then dispositions those
judgements through already, appropriations, or looks
for payments through the Legislature. What this does
is takes the Department of Administration out of that
loop as an intermediary and streamlines efficiencies
within state governments. We changed it from the
Department of Administration to the Department of Law
and added one sentence that says, "Which shall seek
approval for payment of the judgement."
One thing that has come up is we get in the Department
of Administration, questions about these judgements,
we have to then catalog them, send them to the
Department of Law, who then has to disposition them,
and then any questions that come up are then routed
through from the plaintiff or their attorneys though
the Department of Law. We would just like to direct
them straight to the Department of Law.
8:38:01 AM
SENATOR WIELECHOWSKI joined the committee meeting.
CHAIR STOLTZE addressed the judgement on a settlement involving
a mining project and asked that Mr. Arehart describe the case's
process and how the process would be changed by the bill.
MR. AREHART replied that he was not familiar with the case.
CHAIR STOLTZE responded that he presumed that the DOA handled
the case and noted that the settlement was a $350,000 item
proposed in the budget.
MR. AREHART explained that judgements that the DOA receives are
routed back to the Department of Law who then follows through on
the judgement and applies the appropriation. He summarized that
the DOA simply routes judgements over to the Department of Law.
CHAIR STOLTZE asked Mr. Boucher to verify that there was no
discussion on a $350,000 issue. He remarked that the state was
going through a tight-budget time and he was trying to figure
out how the bill would change the process.
8:40:32 AM
MR. BOUCHER explained that an appropriation would be identified
in the settlement process through the Department of Law. He
detailed that the Department of Law does the settlement
negotiations and the DOA largely plays the accounting function
in the process.
CHAIR STOLTZE stated that he was trying to figure out the
rationale of involving the DOA in the process. He speculated
that the involvement of the DOA was due to a concern for a
safeguard or an extra review process. He pointed out that the
testimony lacked historical context and understanding.
MR. BOUCHER replied that he did not know what the original
intent was. He reiterated that the DOA more or less acts as a
pass-through for the settlement process.
SENATOR WIELECHOWSKI quoted the section that would be repealed
as follows:
The Department of Administration shall examine and
audit every receipt, account, bill, claim, refund, and
demand on the funds in the state treasury, it shall
determine whether or not the obligation is incurred in
accordance with laws and regulations adopted under
authority.
He remarked that the section was not being replaced with similar
type of language. He asked Mr. Arehart to verify that the
replacement language was very different than the requirement to
audit receipts, accounts, bills, etc.
MR. AREHART asked if the committee had moved on to Section 2.
CHAIR STOLTZE replied no. He specified that the committee was
still on Section 1 and asked that the question posed by Senator
Wielechowski be answered.
8:43:52 AM
MR. BOUCHER replied that Mr. Arehart may have been asking if the
committee had moved past the original question. He disclosed
that Section 2 was directed at Senator Wielechowski's question.
MR. AREHART explained that there are system functions that take
into account the items that are being repealed. He specified
that there were items within the financial system that performs
the different items as far as making sure that the expenditures
have the appropriate budget controls. He said one of the key
points DOA put in the section was the segregation of duties
where multiple individuals would look at the payments so that
the authorizations were met within the funding source.
8:45:43 AM
SENATOR WIELECHOWSKI pointed out that the section being repealed
had a very specific requirement to examine and audit every
receipt, account, bill, claim, refund, etc. He remarked that the
replacement section looked like it had taken away the
requirement for an audit. He asked if there was a requirement
elsewhere for an examination and audit.
MR. AREHART explained that post-payment audits occur all of the
time. He specified that the intent was to leverage some of the
controls that were already in the system. He conceded that
coming back to the committee with revised language to
specifically pinpoint the controls might be the best option.
SENATOR WIELECHOWSKI remarked that the proposed change seemed
pretty substantive that was not being replaced.
CHAIR STOLTZE summarized that the proposed changes bypasses the
DOA as well as repeals the audit provision.
8:47:20 AM
SENATOR HUGGINS asked that the process in requesting the
statutory change be explained.
MR. BOUCHER specified that the genesis for the legislation was
part of a periodic statutes review by the Office of Management
and Budget.
SENATOR HUGGINS asked how the specific statute request occurred.
MR. BOUCHER explained that there was an internal vetting and
prioritization process where specific requests were based upon
needs.
8:49:43 AM
MR. AREHART detailed that language in Section 3 was changed
where a term "tourist class" would be replaced with "lowest
fare." He said the intent was to make sure that travel used the
lowest fare during the state's time of budgetary constraints. He
added that language would be included that documented any
deviation from the lowest fare.
CHAIR STOLTZE asked that an example be given where flying first
class would be in the best interest of the state.
MR. AREHART explained that first class was not an option and
first-class fares were not booked. He remarked that individuals
flying in first class would most likely be using upgrades.
CHAIR STOLTZE remarked that he had never seen a governor in
first class, but noted that he had seen deputy commissioners in
first class and agreed that personal upgrades were probably
used.
MR. AREHART answered correct. He specified that the DOA does not
purchase first class.
8:51:59 AM
SENATOR HUGGINS noted that the Senate was under a travel
restriction and asked what the process was to assure that people
were abiding by the intent of a travel restriction.
MR. BOUCHER answered that the DOA has travel reports on all of
the departments that details every trip.
SENATOR HUGGINS asked what the DOA does when a person deviates
outside of the cost parameters.
8:53:17 AM
MR. BOUCHER explained that the DOA provides information and the
commissioners or those that do the management of travel expenses
provide oversight or enforcement.
SENATOR WIELECHOWSKI asked for an explanation of the repeal in
Section 5.
MR. AREHART explained that Section 5 had to do with a statute
that was put on the books in the late 1970s where the University
of Alaska was having cash flow problems and the mechanism in the
statute allowed advances to be made to the university that then
had to be repaid. He revealed that the statute had not been used
for over a decade and the repeal request was considered a
cleanup.
8:55:25 AM
SENATOR WIELECHOWSKI pointed out that Section 39 was a repeal
for employee savings bonds deductions and asked if anyone ever
made requests anymore.
MR. AREHART explained that the IRS instituted "Treasury Direct"
in 2010 that allowed employees to buy savings bonds directly. He
specified that the state no longer buys bonds and the repeal was
a statutory cleanup.
CHAIR STOLTZE summarized that all of the departments and
branches of government were trying to find cost savings. He said
the bill might be an opportunity to look at the University of
Alaska and the court system as well. He added that the bill
could be a real cleanup by the time the committee was done.
8:57:17 AM
CHAIR STOLTZE announced that SB 171 was set aside and public
testimony remained open.
MR. BOUCHER remarked that the DOA would return with more
specific answers and asserted that the department was not trying
to shirk its responsibilities.
8:58:58 AM
CHAIR STOLTZE asked for a summary on discussions with the
University of Alaska regarding working together for efficiencies
and savings.
MR. BOUCHER replied that the conversations have been very
productive on multiple levels. He noted that one topic addressed
was the sharing of facilities within the information technology
(IT) space.
CHAIR STOLTZE commented that there was no choice but to make
government smarter and better.
9:00:45 AM
CHAIR STOLTZE announced that SB 171 would be held in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 171 Sponsor Statement - Governor's Transmittal Letter.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 171 |
| SB 171 DOA Hearing Request 2-12-16.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 171 |
| SSSB 91 Fiscal Note - ACS-TRC 2-16-16.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 91 |
| SSSB 91 Public Testimony & Correspondence to SSTA (Second Batch - 45 POMs) 2-17-16.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 91 |
| SB 171 Sectional Analysis by Department of Administration 2-17-16.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 171 |
| SSSB 91 Letter - Alaska Peace Officers Association 2-11-16.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 91 |
| SSSB 91 Office of Victims Rights - Written Testimony 2-18-16.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 91 |
| SB 171 Alaska Dispatch Article on Judgments Against the State 2-18-16.pdf |
SSTA 2/18/2016 8:30:00 AM |
SB 171 |