05/07/1998 04:30 PM House FIN

SENATE BILL NO. 358                                                            
                                                                               
"An Act relating to disclosure of the use of state                             
funds related to personnel records."                                           
                                                                               
PAT DAVIDSON, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT                           
DIVISION testified in support of SB 358.  She explained that                   
the legislation would divide investigations from personnel                     
actions in regards to disclosure.  Personnel actions would                     
remain confidential.  Public disclosure would be allowed                       
when there is a misuse of state resources.  The original                       
legislation was limited to public funds.  The Senate changed                   
"public funds" to "state resources".                                           
                                                                               
Ms. Davidson reviewed the bill.  Section 1(a) identifies                       
that any state agency authorized by law to conduct a state                     
audit can ask for the public release of information.  They                     
would have to ask the employee for permission to release                       
information.  If the employee declines a review procedure                      
would be used as contained in subsection (c).  This protects                   
the employee by allowing someone outside of the                                
investigation to look at it before it can become public.                       
She observed that the Department of Administration, Division                   
of Finance would appoint a review officer for cases                            
involving employees of the executive branch, including                         
employees of the University of Alaska.  She suggested that                     
the appointment be elevated to the commissioner or his                         
designee. She observed that the bill states that the                           
appropriate reviewing officer for employees of the judicial                    
branch is the administrative director of the Alaska Court                      
System.  The appropriate reviewing officer for employees of                    
the legislative branch is the:  (1) director of the                            
Legislative Affairs Agency for employees of the agency; (2)                    
legislative auditor for employees of the division of                           
legislative audit;  (3) legislative fiscal analyst for                         
employees of the division of legislative finance; ombudsman                    
for employees of the Office of the Ombudsman.                                  
                                                                               
Representative Mulder questioned if the expansion from                         
"public funds" to "public resources" was necessary.  Ms.                       
Davidson did not know how expansive the legislation would be                   
under public resources.  Representative Mulder observed that                   
an $100 thousand dollars fiscal note accompanies the                           
expansion.                                                                     
                                                                               
In response to a question by Representative Kelly, Ms.                         
Davidson noted that as the agency conducting the audit that                    
she would first ask the employee for a public release.                         
                                                                               
Representative Davies expressed concern that there are                         
certain aspects of personnel records that maintain privacy,                    
which are not protected in other places in law.  Ms.                           
Davidson reiterated that the intent is to separate personnel                   
action that has been taken from investigation results.                         
Representative Davies acknowledged that it would be                            
important to know that a state employee did an action, but                     
stated that it might not be important to know the identity                     
of the state employee.  Ms. Davidson argued that public                        
officials must be accountable for their actions when they                      
are dealing with financial transactions.  She noted that                       
there might not be as clear a distinction with the use of                      
"public resource".                                                             
                                                                               
Representative Davies stated that he supports the general                      
principle of the legislation.  He stressed that there are                      
already mechanisms for punishing wrongdoers.  He emphasized                    
that information would be helpful in cases where policy                        
might be changed.  He posed a hypothetical situation where a                   
state vehicle was misused through an honest                                    
misinterpretation of the rules.  He stressed that it would                     
not be advantageous to punish the person and damage their                      
reputation.  The information would be useful for future                        
policy decisions.                                                              
                                                                               
KATHLEEN STRASBAUGH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT                    
OF LAW testified that the Department of Law has some                           
reservations similar to those of Representative Davies.  The                   
Department of Law worked with the Legislative Budget and                       
Audit Committee on the original legislation.  They                             
considered the limited issue of financial transactions                         
during discussions.  They agreed that there could be                           
substantial injury to a person's reputation that is accused                    
of misuse, fraud or embezzlement.  The objection process                       
solves a problem that is created under state and federal                       
Constitutions regarding injury of reputation.  There are                       
accepted principles with financial transactions.  The                          
legislation would allow Legislative Budget and Audit                           
Committee to use conclusions instead of doing their own                        
audit.  The Legislative Budget and Audit Committee could use                   
public documents to question the employee.  The fiscal cost                    
would be zero without the change to "public resources".  The                   
use of public resource broadens those things that could be                     
subject to grievances.  She agreed that there needs to be                      
debate about the misuse of public resources, but emphasized                    
that an immediate problem could be resolved with a more                        
limited approach.                                                              
                                                                               
Ms. Strausbaugh stated that she has some reservations                          
regarding name revealing.  She gave the example of an                          
accounting clerk that routinely messed up their work. She                      
observed that an internal audit could be redone.                               
                                                                               
Representative Martin stated that misuse of public money;                      
land or resources should be public knowledge.                                  
                                                                               
Ms. Strausbaugh explained that the Department of Law only                      
advises members of the executive branch to comply with AS                      
39.25.080.  She emphasized that the legislation is a quick                     
fix that was requested by the Legislative Budget and Audit                     
Committee to deal with a specific problem that was costing                     
them a lot of time.  The Department of Law only advises                        
their clients to uphold the law.                                               
                                                                               
Representative Davies noted that if the reviewing officer                      
finds that the audit results are not based on substantial                      
evidence or that the decision is unreasonable, the officer                     
shall prohibit the public release of the audit results.  He                    
questioned if the audit results would then be made public.                     
Ms. Strausbaugh said they would.  Representative Davies                        
concluded that the legislation does not allow the hearing                      
officer to make a distinction between a case where it would                    
be in the public interest to release the generic versus                        
releasing the individual's name.  Representative Martin                        
observed that the Legislative Budget and Audit Committee has                   
been careful with the use of names.                                            
                                                                               
Representative Davies noted that the information is                            
available.  He stated that he wanted to get the facts of the                   
circumstance released to the public, but stressed his                          
concern about instances when the individual is not charged.                    
Representative Mulder felt that there are sufficient                           
protections.