Legislature(2013 - 2014)HOUSE FINANCE 519
03/28/2013 05:30 PM House LEGISLATIVE BUDGET & AUDIT
| Audio | Topic |
|---|---|
| Start | |
| Approval of Minutes | |
| Executive Session | |
| Release of Audits | |
| Other Business | |
| Audit Request | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
March 28, 2013
5:39 p.m.
MEMBERS PRESENT
Senator Anna Fairclough, Chair
Senator Kevin Meyer
Senator Cathy Giessel
Representative Mike Hawker, Vice Chair
Representative Bob Herron
Representative Andy Josephson
MEMBERS ABSENT
Senator Click Bishop
Senator Donald Olson
Senator Mike Dunleavy (alternate)
Representative Alan Austerman
Representative Kurt Olson
Representative Scott Kawasaki (alternate)
Representative Bill Stoltze (alternate)
COMMITTEE CALENDAR
APPROVAL OF MINUTES
EXECUTIVE SESSION
RELEASE OF AUDITS
OTHER BUSINESS
AUDIT REQUEST
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
REPRESENTATIVE SHELLY HUGHES
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a request for an audit of the
regional economic assistance program in the Department of
Commerce, Community & Economic Development.
KRISTIN CURTIS
Legislative Auditor
Legislative Audit Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information on the audit request.
ACTION NARRATIVE
5:39:20 PM
CHAIR ANNA FAIRCLOUGH called the Legislative Budget and Audit
Committee meeting to order at 5:39 p.m. Representatives Herron,
Josephson, and Hawker, and Senators Fairclough, Giessel, and
Meyer were present at the call to order.
^Approval of Minutes
Approval of Minutes
5:40:12 PM
CHAIR FAIRCLOUGH announced that the first order of business
would be approval of the minutes.
REPRESENTATIVE Hawker made a motion to approve the minutes of
March 11, 2013. There being no objection, the minutes from the
meeting of March 11, 2013 were approved.
^Executive Session
Executive Session
5:40:45 PM
CHAIR FAIRCLOUGH announced that the next order of business would
be to move into Executive Session.
5:40:51 PM
REPRESENTATIVE HAWKER made a motion to move to Executive Session
for the purpose of discussing confidential audit reports under
AS 24.20.301. There being no objection, the committee went into
executive session at 5:41 p.m.
5:41:04 PM
The committee took an at-ease from 5:41 p.m. to 5:57 p.m.
5:57:05 PM
CHAIR FAIRCLOUGH brought the committee back to order at 5:57
p.m. Representatives Herron, Josephson, and Hawker, and
Senators Fairclough, Giessel, and Meyer were present at the call
back to order.
^Release of Audits
Release of Audits
5:57:15 PM
CHAIR FAIRCLOUGH announced that the next order of business would
be the release of audits.
REPRESENTATIVE HAWKER made a motion for the final audit for the
State of Alaska Single Audit for the Fiscal Year ended June 30,
2012 to be released to the public for response. There being no
objection, it was so ordered.
^Other Business
Other Business
5:57:30 PM
CHAIR FAIRCLOUGH expressed her intention to schedule a
Legislative Budget and Audit Committee meeting later in the
summer, or early fall, to discuss the higher level
recommendations by the Legislative Audit Division in the
aforementioned audit, and to ask each department to testify to
the committee as to the implementation of these recommendations.
5:58:02 PM
REPRESENTATIVE HAWKER commended the efforts of the auditors, and
endorsed the recommendation by Chair Fairclough for a follow up
with the departments.
^Audit Request
Audit Request
5:58:38 PM
CHAIR FAIRCLOUGH announced that the final order of business
would be an audit request by Representative Hughes of the
regional economic assistance program in the Department of
Commerce, Community & Economic Development (DCCED). [Included in
members' packets]
5:58:50 PM
REPRESENTATIVE SHELLY HUGHES, Alaska State Legislature, noted
that, as the committee was already aware of the Alaska Regional
Development Organizations (ARDOR), she would simply explain her
reasons for the audit request of the program. She affirmed that
ARDOR was generally a good program, but expressed her concern
for the role of the state with support and assistance to the
program. She had recently been made aware that the program,
established in 1988, had never been audited. She pointed out
that its current annual fiscal note was about $800,000, which
accounted for millions of dollars spent on the program over the
years. She referred to her written request, which listed her
concerns. In addition, she noted that two other items had a
"healthy discussion" on the floor of the House. She reported
that the re-authorization for the program had been shortened to
three years, with the knowledge that the audit request was going
to be presented to the committee. She pointed out that a report
from the DCCED on the statewide and regional economic strategies
and projects was now required, as well. She declared that the
requested audit was also important. Referring to discussions
from the House Finance Committee and the House floor, she asked
that the salaries of the ARDOR directors and staff be reviewed,
and that the role of DCCED be further defined to "be proactive
in their assistance to ARDORs in finding additional program
dollars as well as advancing projects."
6:02:40 PM
CHAIR FAIRCLOUGH clarified that these additional requests needed
to be in writing in order to appropriately capture the requests
and ensure they were an auditable function.
KRISTIN CURTIS, Legislative Auditor, Legislative Audit Division,
Alaska State Legislature, reported that committee members had
previously added to an audit request as it was being discussed,
so that both the notes and the committee minutes would be
sufficient to incorporate these additional requests into the
audit.
6:03:16 PM
REPRESENTATIVE JOSEPHSON offered his belief that this audit would
report the effectiveness of the programs. He expressed his
assumption that the auditor would detail other sources for the
ARDOR directors' salaries, which would be beyond the purview of
the legislature. He asked Representative Hawker to clarify why
there had not been a previous audit of ARDOR.
6:04:13 PM
MS. CURTIS, in response to Representative Josephson, explained
that sunset audits were required by statute, as there was a
termination date in the statute. She noted that other agencies,
although set up by the Legislature to be subject to termination,
did not contain a requirement for audit. She clarified that
ARDOR had a sunset provision but did not have an audit
requirement.
6:05:00 PM
REPRESENTATIVE HAWKER extolled that this was the reason for
state auditors.
REPRESENTATIVE JOSEPHSON asked Ms. Curtis if this had been "a
little capricious," and was there any reasoning for some
programs to require an audit, while others did not.
MS. CURTIS replied, "I never question what the Legislature did,"
and that she never questioned its wisdom.
REPRESENTATIVE HAWKER stated that this was a question of policy
for the legislators. He offered "his personal perspective" that
these were policy calls made by the Legislature over time. He
declared that it was desirous to have a sunset clause for some
agencies, and he referred to a statute for agencies subject to
sunset audits, as many of them held custodial funds for
regulated groups. He noted that many of the state boards, which
were another level of regulation over a profession or an
industry, needed to also operate in accordance with state
statutes in an effective, efficient manner with appropriate
levels of funding. He pointed out that, as this internal state
agency was a part of the recurring budget process, it would not
normally fall into the statutory requirement for a complete
sunset audit.
6:06:58 PM
REPRESENTATIVE HERRON reported that the House Special Committee
on Economic Development, International Trade and Tourism had had
a discussion with the ARDOR directors, and he expressed his
concern with the underperformance of some of those directors.
He noted that consolidation for some of the ARDOR regions had
also been discussed. He emphasized that there were also some
outstanding role models among the ARDOR directors, as well.
6:07:42 PM
CHAIR FAIRCLOUGH asked Ms. Curtis if this audit could be
accommodated in the existing schedule.
6:08:07 PM
MS. CURTIS, in response, said Legislative Audit Division would
not be able to accomplish the audit prior to the next
legislative session, but would be able to complete the audit
prior to its sunset in three years.
CHAIR FAIRCLOUGH pointed out that the majority of the immediate
auditor time would be invested in the just released State of
Alaska Single Audit.
6:08:47 PM
SENATOR MEYER applauded the audit request, as he had also
questioned the ARDOR program.
6:09:01 PM
REPRESENTATIVE HAWKER made a motion to approve the audit request
for the regional economic assistance program in the Department
of Commerce, Community & Economic Development. There being no
objection, it was so ordered.
6:09:20 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
6:09 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| LB&A Agenda 3.28.13.pdf |
JBUD 3/28/2013 5:30:00 PM |
|
| LB&A Meeting Minutes 3.11.13.pdf |
JBUD 3/28/2013 5:30:00 PM |
|
| Audit Request- Rep. Hughes.pdf |
JBUD 3/28/2013 5:30:00 PM |