Legislature(2021 - 2022)BUTROVICH 205

02/25/2021 03:30 PM Senate STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Invited & Public Testimony --
Department of Administration
- Kelly Tshibaka, Commissioner
- Hans Zigman
Heard & Held
-- Testimony <Invitation Only><TBA> --
**Streamed live on AKL.tv**
              SB 25-STATE GOV'T FINANCES: WEBSITE                                                                           
3:43:03 PM                                                                                                                    
CHAIR SHOWER  reconvened the meeting and  recognized that Senator                                                               
Costello  had  joined  the meeting  via  teleconference,  thereby                                                               
establishing a quorum to do business.                                                                                           
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."                                                                                                      
He listed the people available  to answer questions and noted the                                                               
proposed committee substitute.                                                                                                  
3:45:26 PM                                                                                                                    
SENATOR  HOLLAND   moved  to  adopt  the   work  draft  committee                                                               
substitute  (CS)  for  SB  25, work  order  32-LS0217\B,  as  the                                                               
working document.                                                                                                               
3:45:44 PM                                                                                                                    
CHAIR SHOWER objected for discussion purposes.                                                                                  
3:45:56 PM                                                                                                                    
SENATOR  BILL  WIELECHOWSKI,  Alaska State  Legislature,  Juneau,                                                               
Alaska,  sponsor of  SB 25  explained that  Mr. Graham  spent the                                                               
last several weeks  collaborating with the chair's  staff and the                                                               
Department  of  Administration (DOA)  to  resolve  some of  DOA's                                                               
concerns and  reduce the fiscal  note. He deferred to  Mr. Graham                                                               
to present the proposed changes.                                                                                                
3:46:53 PM                                                                                                                    
NATE  GRAHAM,  Staff,  Senator Bill  Wielechowski,  Alaska  State                                                               
Legislature, Juneau,  Alaska, described the following  changes in                                                               
the CS for SB 25:                                                                                                               
     The Senate State Affairs  Committee made clarifying and                                                                    
     technical changes to SB 25  (version A) Specifically to                                                                    
     Section 4 (a)(1)-(3), Section 4  (c)(3), Section 4 (d),                                                                    
     & Section 6 (b).                                                                                                           
        • Page 3 Line 7  Adds "Unaudited" allowing for the                                                                      
          Department of Administration to provide unaudited                                                                     
          state revenue numbers in the Alaska Online                                                                            
        • Page 3 Line 20  Adds "Unaudited" allowing for                                                                         
          the Department of Administration to provide                                                                           
          unaudited state expenditures in the Alaska Online                                                                     
        • Page 3 Line 28  Adds "Estimated" allowing for                                                                         
          the Department of Administration to provide the                                                                       
          estimated fund balances of the Statutory Budget                                                                       
          Reserve,   Constitutional   Budget  Reserve,   and                                                                    
          Permanent Fund                                                                                                        
        • Earnings Reserve in the Alaska Online Checkbook.                                                                      
          Page 5  Line 3-8 Clarifies that  the Alaska Online                                                                    
          Checkbook   will   have   searchable   information                                                                    
          related  to  state service  procurement  contracts                                                                    
          and independent contractors.                                                                                          
             o (B) " a searchable internet website that                                                                         
               provides   information   related   to   state                                                                    
               service   procurement  contracts,   including                                                                    
               name,   compensation,  contract   length  and                                                                    
               contract type;                                                                                                   
             o (C) a searchable Internet website that                                                                           
               provides  information related  to independent                                                                    
               contractors  engaged by  the state,  by state                                                                    
               agency,    including   name,    compensation,                                                                    
              contract length, and contract type.                                                                               
        • Page 5 Line 9-12  Clarifies that state agencies                                                                       
          and  corporations  that  do not  use  the  central                                                                    
          accounting  system  shall provide  information  to                                                                    
          the   Department   of   Administration   that   is                                                                    
          necessary to  comply with the requirements  of the                                                                    
          Alaska Online Checkbook.                                                                                              
             o "Including a state agency that does not use                                                                      
               the central accounting system.                                                                                   
        • Page 6  Transitional Provisions                                                                                       
             o The Department of Administration shall                                                                           
               continue to make  the Alaska Checkbook Online                                                                    
               Internet   website    the   department   made                                                                    
               available online  in February  2021 available                                                                    
               to  the   public  and  continue   to  publish                                                                    
               information  from  the  statewide  accounting                                                                    
               system  on  the  website until  the  Internet                                                                    
               website   established  under   AS  37.05.215,                                                                    
               added  by  Sec.  4  of   this  Act,  is  made                                                                    
               available to the public.                                                                                         
3:49:44 PM                                                                                                                    
CHAIR SHOWER removed his objection; finding no further objection                                                                
the CS for SB 25 was adopted.                                                                                                   
He asked Mr. Zigmund for a 30,000-foot explanation of IRIS.                                                                     
3:51:56 PM                                                                                                                    
HANS  ZIGMUND,  Director,  Division  of  Finance,  Department  of                                                               
Administration  (DOA) Juneau,  Alaska, recalled  a question  from                                                               
the previous hearing  about the intersection of  the IRIS upgrade                                                               
project and  the work  required to  produce the  online checkbook                                                               
outlined in SB  25. He explained that the  resource constraint is                                                               
that the Division of Finance's  five programmers and one database                                                               
specialist are 100 percent committed  to working on the multiyear                                                               
IRIS  upgrade project.  IRIS is  the  state's central  accounting                                                               
system,  HR and  payroll system,  procurement system,  and vendor                                                               
services system.  Alongside that is  the upgrade to  ALDER, which                                                               
is the  reporting tool used  to pull accounting  information from                                                               
IRIS. That reporting tool is essential  to be able to produce the                                                               
online checkbook.                                                                                                               
MR.  ZIGMUND estimated  that it  would take  about six  months to                                                               
implement the online  checkbook envisioned in SB 25.  That is how                                                               
long it  took a  team of  five people in  Ohio to  implement that                                                               
state's online checkbook,  which is similar to the one  in SB 25.                                                               
He noted that Ohio has  dedicated two people fulltime and $75,000                                                               
a year to maintain the software.                                                                                                
MR.  ZIGMUND stated  that DOA  views the  online checkbook  as an                                                               
important tool  to support transparency  in public  finances. The                                                               
department looks forward  to this project and  estimates that the                                                               
October  2022  effective  date is  achievable  with  some  modest                                                               
3:55:39 PM                                                                                                                    
CHAIR  SHOWER  asked  him  to  explain  IRIS  versus  the  online                                                               
MR. ZIGMUND  explained that  IRIS is  the state's  general ledger                                                               
system  where the  transactions  occur. By  contrast, the  online                                                               
checkbook provides  a visualization  into where the  state spends                                                               
money and  where that  money comes  from. It  will also  show the                                                               
estimated  value  of  funds such  as  the  Constitutional  Budget                                                               
Reserve  (CBR),  the  Statutory Budget  Reserve  (SBR),  and  the                                                               
Earnings Reserve  Account (ERA). It  is an easily  understood way                                                               
for legislators, businesses, and the  public to have insight into                                                               
the state's finances.                                                                                                           
CHAIR  SHOWER  asked what  drove  the  IRIS  upgrade, if  it  was                                                               
supported, and what it cost.                                                                                                    
3:57:53 PM                                                                                                                    
MR.  ZIGMUND explained  that the  vendor  stopped supporting  the                                                               
original version  of IRIS in April  2019 after it released  a new                                                               
version. Since DOA was actively  engaged in upgrading the system,                                                               
the vendor agreed to provide support  for the old version as long                                                               
as  the upgrade  was underway.  The upgrade  is a  new underlying                                                               
technology with  a redesigned user interface  with a mobile-first                                                               
design  approach. Some  of the  150 new  features on  the finance                                                               
side include GASBY  87 compliant lease accounting and  a new bond                                                               
accounting module.  About 75  new features also  will go  live on                                                               
the  HR side.  The upgrade  also provided  the opportunity  to do                                                               
process automation for  timesheets, payroll correction documents,                                                               
and vendor setup.                                                                                                               
With  regard  to  whether  DOA will  have  additional  needs,  he                                                               
explained  that the  vendor no  longer requires  massive upgrades                                                               
every few years  and instead will push  out software improvements                                                               
periodically, similar to cellphone  updates. Over time, this will                                                               
save the  state money.  He highlighted  that there  is additional                                                               
functionality within  the new  version 4 that  is not  within the                                                               
current   budget.   These   include   statewide   grantee/grantor                                                               
functionality,  enhanced  accounts   receivable  technology,  and                                                               
inventory management processes.                                                                                                 
4:01:57 PM                                                                                                                    
CHAIR  SHOWER asked  for  the  total cost  and  the timeline  for                                                               
MR. ZIGMUND  related that the  estimated completion date  for the                                                               
IRIS upgrade is  January 25, 2022. The planning  phase took about                                                               
a year and  staff training on project  management techniques took                                                               
a month.  The build phase is  about a year, the  achieve phase to                                                               
do  change management  and training  is about  3 months,  and the                                                               
post  implementation  and  support  phase is  from  January  2022                                                               
through April  2022. He described the  implementation schedule as                                                               
typical  for a  massive upgrade.  The two  capital appropriations                                                               
for  the project  were  for  $4.1 million  and  $7.1 million.  He                                                               
anticipated producing a viable project on budget.                                                                               
4:04:47 PM                                                                                                                    
SENATOR HOLLAND asked if someone  will need to be prepared month-                                                               
to-month to help with updates  or when the unexpected arises with                                                               
the online checkbook.                                                                                                           
MR. ZIGMUND confirmed that he  does anticipate that ongoing need.                                                               
He noted that  Ohio has two people on staff  for that purpose but                                                               
it was  unclear how  much of  their time  is dedicated  to online                                                               
checkbook maintenance.                                                                                                          
CHAIR  SHOWER asked  if  the  CGI contractor  was  doing all  the                                                               
upgrades or if DOA staff was also involved.                                                                                     
MR. ZIGMUND replied  both state employees and  the contractor are                                                               
working on the IRIS upgrade project.                                                                                            
4:08:10 PM                                                                                                                    
CHAIR SHOWER asked if the  on-cost and on-time IRIS upgrade would                                                               
be done at the same time as the online checkbook.                                                                               
MR.  ZIGMUND replied  the IRIS  upgrade will  go live  January of                                                               
2022  and SB  25  requires the  online checkbook  to  be live  by                                                               
October  2022.  Once  the  upgrade   is  complete,  he  said  the                                                               
department can  redeploy resources  to the online  checkbook with                                                               
the  assistance of  probably one  contractor and  perhaps outside                                                               
help with design.                                                                                                               
CHAIR SHOWER asked the sponsor if he had any questions.                                                                         
4:09:45 PM                                                                                                                    
SENATOR  WIELECHOWSKI asked  if the  fiscal  note for  SB 25  was                                                               
still indeterminate or if it could be absorbed in DOA's budget.                                                                 
4:10:14 PM                                                                                                                    
MR. ZIGMUND  replied the  fiscal note may  be amended  before the                                                               
bill is  heard in Senate  Finance. One  cost that will  change is                                                               
for the  forward-facing software because DOA  has identified some                                                               
licenses  that  it  already  owns  that can  be  used  for  that.                                                               
However, there  may still  be server costs  on the  capital side.                                                               
There is  also the question of  the cost for outside  help on the                                                               
design phase and for contractors.                                                                                               
SENATOR WIELECHOWSKI said his office  would continue to work with                                                               
the administration to  come up with a good  product that provides                                                               
transparency in a timeline that is  as short as possible and at a                                                               
cost that  is as low  as possible, ideally within  DOA's existing                                                               
budget. "I don't think we need a Rolls Royce," he said.                                                                         
CHAIR SHOWER  said he would  not hold  the bill awaiting  the new                                                               
fiscal note.                                                                                                                    
4:15:16 PM                                                                                                                    
CHAIR SHOWER opened public testimony on SB 25.                                                                                  
4:15:39 PM                                                                                                                    
BRENDA  ANGASAN,  representing  self, Anchorage,  Alaska,  stated                                                               
support  for  SB  25 because  Alaskans  deserve  transparency  in                                                               
government.  She looks  forward  to Alaska  no  longer being  the                                                               
worse in the nation for data transparency and availability.                                                                     
4:16:11 PM                                                                                                                    
TIMOTHY HALE,  representing self, Butte, Alaska,  stated that the                                                               
online checkbook is a fantastic  tool, but the state's old system                                                               
was  like a  1992 Honda  Accord with  300,000 miles.  He reported                                                               
that the IT  and finance departments in the  Mat-Su Borough built                                                               
an  online checkbook  last year  that is  user-friendly and  cost                                                               
very little. He reiterated his support.                                                                                         
4:18:15 PM                                                                                                                    
ESTELLE  TOKASH,  representing  self, Anchorage,  Alaska,  stated                                                               
that she  supports SB 25  because she wants more  transparency in                                                               
government spending.                                                                                                            
4:19:06 PM                                                                                                                    
VERI DI  SUVERO, Alaska Public Interest  Research Group (AkPIRG),                                                               
Anchorage,   Alaska,    stated   that   AkPIRG   is    the   only                                                               
nongovernmental   nonprofit   focused  on   addressing   Alaska's                                                               
consumer and trust  issues. Transparency is the  cornerstone of a                                                               
democracy and  is essential for  its government. She  said AkPIRG                                                               
supports  SB 25  and believes  the implementation  of the  online                                                               
checkbook  is   critical  for  the   public  to   understand  how                                                               
government  is spending  public  dollars. Access  to the  state's                                                               
financial  information  is  an important  element  of  government                                                               
accountability  and provides  a functional  system of  checks and                                                               
balances.  She  said the  enhancements  of  the online  checkbook                                                               
contained in SB  25 include searchable features,  the addition of                                                               
procurement documents  and agencies that  do not use  the state's                                                               
accounting  system,  and  embedded  links  to  primary  financial                                                               
documents, among other things.                                                                                                  
MS.  DI  SUVERO  suggested  that   the  online  checkbook  should                                                               
include:  accounting codes  that are  specific to  the associated                                                               
transaction  and  identified  with explanations;  definitions  of                                                               
accounting terms;  a chart of  accounts guide; credits  and other                                                               
costs  to  reflect  the  true   cost  of  certain  policies;  and                                                               
interagency  receipts,  particularly   for  personal  travel  and                                                               
relocation costs.                                                                                                               
4:21:52 PM                                                                                                                    
NAURI  TOLER,  representing  self, Eagle  River,  Alaska,  stated                                                               
support for SB 25. She said  it is important to have transparency                                                               
and for  the online checkbook  to be comprehensive, easy  for the                                                               
average  person  to  navigate,   and  include  information  about                                                               
whether money  actually was  spent on projects  for which  it was                                                               
4:24:00 PM                                                                                                                    
CHAIR SHOWER  closed public testimony  on SB 25 and  reminded the                                                               
public   that   written   testimony   could   be   submitted   at                                                               
CHAIR SHOWER asked Commissioner Tshibaka  if she had any comments                                                               
on SB 25.                                                                                                                       
4:25:04 PM                                                                                                                    
KELLY  TSHIBAKA,  Commissioner,   Department  of  Administration,                                                               
Anchorage, Alaska, stated  that DOA has chosen  to prioritize the                                                               
IRIS  upgrade because  the system  has not  been supported  since                                                               
April 2019. The project is on  time and on budget. The only delay                                                               
was when the Division of Finance  had to take down the old online                                                               
checkbook. She  agreed with Mr.  Zigmund that DOA supports  SB 25                                                               
and the new online checkbook, but  the condition is that the IRIS                                                               
upgrade must be finished first.                                                                                                 
CHAIR  SHOWER  observed that  it  sounded  like the  sponsor  was                                                               
willing to work with the department.                                                                                            
4:27:15 PM                                                                                                                    
CHAIR SHOWER held SB 25 in committee for future consideration.                                                                  

Document Name Date/Time Subjects
SB 25 Amendment 1.pdf SSTA 2/25/2021 3:30:00 PM
SB 25
SB 25 Amendment 2.pdf SSTA 2/25/2021 3:30:00 PM
SB 25
SB 25 Amendment 3.pdf SSTA 2/25/2021 3:30:00 PM
SB 25
SB 25 Amendment 4.pdf SSTA 2/25/2021 3:30:00 PM
SB 25
SB 25 Amendment 5.pdf SSTA 2/25/2021 3:30:00 PM
SB 25
SB 25 CS.pdf SSTA 2/25/2021 3:30:00 PM
SB 25
SB 25 Explanation of Changes.pdf SSTA 2/25/2021 3:30:00 PM
SB 25
SB 25.pdf SSTA 2/25/2021 3:30:00 PM
SB 25