12/07/2015 01:30 PM House LEGISLATIVE BUDGET & AUDIT
| Audio | Topic |
|---|---|
| Start | |
| Revised Program - Legislative (rpls) | |
| Executive Session | |
| Final Audit Reports | |
| Performance Review Reports | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
ANCHORAGE, ALASKA
December 7, 2015
1:32 p.m.
MEMBERS PRESENT
Representative Mike Hawker, Chair
Senator Anna MacKinnon, Vice Chair (via teleconference)
Representative Kurt Olson
Representative Lance Pruitt
Representative Steve Thompson (via teleconference)
Representative Sam Kito
Senator Lyman Hoffman (via teleconference)
Senator Click Bishop (via teleconference)
MEMBERS ABSENT
Senator Cathy Giessel
Senator Bert Stedman
Representative Mark Neuman (alternate)
Senator Pete Kelly (alternate)
COMMITTEE CALENDAR
REVISED PROGRAM - LEGISLATIVE (RPLs)
EXECUTIVE SESSION
IRIS AUDIT PROCUREMENT
RELEASE OF FINAL AUDIT REPORTS
RELEASE OF PERFORMANCE REVIEWS
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
HEIDI TESHNER, Director
Administrative Services
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Presented RPL 05-6-0111, Child Nutrition
Programs.
LACEY SANDERS, Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified regarding RPL 05-6-0111.
KRIS CURTIS, Legislative Auditor
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the process after releasing the
final performance review reports from the committee.
ROSS ALEXANDER
Legislative Audit Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered a question regarding the final
performance review reports.
ACTION NARRATIVE
1:32:59 PM
CHAIR MIKE HAWKER called the Legislative Budget and Audit
Committee meeting to order at 1:32 p.m. Representatives Kito
Olson, Thompson, and Hawker, and Senators Bishop, Hoffman, and
MacKinnon were present at the call to order. Representative
Pruitt arrived as the meeting was in progress.
^REVISED PROGRAM - LEGISLATIVE (RPLs)
REVISED PROGRAM - LEGISLATIVE (RPLs)
1:34:15 PM
CHAIR HAWKER announced that the first order of business would be
RPL 05-6-0111, Department of Education and Early Development,
Child Nutrition Programs.
1:34:54 PM
HEIDI TESHNER, Director, Administrative Services, Department of
Education and Early Development, advised that the Division of
Teaching and Learning Support, Child Nutrition Programs (CNP) is
requesting an increase of $8.7 million in federal receipt
authority in order to receive additional U.S. Department of
Agriculture (USDA) grant funds. She noted that this request
would bring the FY2016 Child Nutrition Program's total federal
receipt authority to a little over $61 million. She explained
that these programs are fully federally funded and the spending
will provide support for the significant growth they have
experienced, within its USDA Federal Nutrition Services Block
Grant. The grant includes programs such as, the National School
Lunch Program, Child and Adult Care Food Program (CACFP), Summer
Food Service Program, and others. Without full authority, she
further explained, the USDA Meals Program will be terminated or
reduced which will impact school districts, child care centers,
Head Start agencies, and the summer meal program. She said the
major growth within school meals is directly attributed to a
community eligibility program which provides free breakfast and
lunch to all students of low-income schools. The schools in
Alaska, as well as other states, have experienced an overall
increased participation in meal programs when meals are free,
and [find] that students are better prepared to receive their
education "with food in their bellies." She expressed that this
RPL requires no state funding as it is fully federally funded,
and is requested because more students are eligible to
participate. She noted that students do not have to
participate.
1:37:30 PM
CHAIR HAWKER requested confirmation that this is additional
federal money available to the State of Alaska without requiring
any additional general fund investments or in-kind
contributions.
MS. TESHNER answered, "That is correct."
1:38:09 PM
SENATOR BISHOP referred to page [3] of the RPL "Budgetary
Issues," and asked for clarification that this is authorization
for $8.7 million for billable claims.
MS. TESHNER responded that the [amount] is based upon actual
claims of actual meals served.
CHAIR HAWKER noted this is the second time the RPL has been
before the committee because during the last meeting there was
not sufficient votes to pass it. He said there was concern that
this program would create a deepening of consideration of what
would be a welfare class and would bring more people onto
federally subsidized programs, thereby, creating increased
reliance on them. He also noted constituents' concern that they
do not want their children placed in increasing reliance upon
federal government handouts. He asked for Ms. Teshner's
response and why the committee should create additional further
reliance upon the federal government to run this program knowing
that federal money is "always going to be challenged" and it may
not be available in the future after creating the expectation
that these programs provide.
MS. TESHNER replied that parents can determine whether or not
their children participate in the program, and do not have to be
singled into the low income category. She pointed out that
students learn better when they've had a decent meal and not
everyone has access to a decent meal. This allows all of those
students to take advantage [of the program] that will assist
them in learning, she pointed out.
1:41:13 PM
CHAIR HAWKER said he appreciates the clarity that parents are
not required to participate, but from the state's perspective
questioned whether it is a good thing for the committee to
create increased reliance upon a federally subsidized program
that likely will not be sustainable in the future. Thereby, he
remarked, causing expectations by the families that these funds
would be made up by the State of Alaska. He queried whether
this is a good route to go.
MS. TESHNER answered "personally, yes," in that this is a fully
federally funded program and if it is not approved, school
districts would have to use state money to fulfill the backfill
of not having the federal money to pay for the meals already
served.
1:42:12 PM
CHAIR HAWKER surmised that the state is already obligated to pay
general fund money for this program should the state not receive
this money from the federal government.
MS. TESHNER responded, no. She offered that the programs would
have to be seriously reduced or terminated because school
districts could not afford to pay. In the event anything had
already occurred, beyond the federal money they could receive,
[school districts] would have to backfill with state funding.
CHAIR HAWKER surmised that this [funding] would curtail a
proposed increase, which is a net zero, and noted that it does
not make sense.
MS. TESHNER advised that if there is no federal funding
authority to pay school districts for meals they have already
disbursed to students, there is a chance they would either have
to terminate the program during the school year, or would have
to substantially reduce it to the federal authority they
received, and "they would not have to subsidize that with state
dollars." She related that it would affect the programs without
the funding, but "we" will not come back for more state funding
for the Child Nutrition Program itself.
1:43:43 PM
CHAIR HAWKER referred to Ms. Teshner's statement that "it is
your opinion," and asked whether that is her opinion or the
opinion of the agency and Governor Bill Walker's administration.
MS. TESHNER replied that it is the opinion of the agency and the
administration.
1:44:10 PM
REPRESENTATIVE KITO commented that the state has federal funding
opportunities available to help the state's disadvantaged
students. He cautioned that the legislature should consider
that the state is receiving $300-$400 million a year from the
federal government for the state's federal highway
transportation program, and is receiving approximately $100
million from the Federal Aviation Administration for capital
construction on the state's aviation program. He reminded the
committee that the state receives a significant amount of
federal money every year on the capital side as well as the
operating side. The legislature, he pointed out, needs to be
certain it has the ability to capitalize on the amount of
federal funding the state can receive to help Alaska's
residents. When discussing the possible loss of federal funds,
it should not be forgotten that the state receives a significant
amount of capital funds it could lose as well. He opined that
legislators would not consider decreasing the state's federal
fund receipts for aviation or highways and to keep that in mind
when considering these other programs.
1:45:28 PM
REPRESENTATIVE OLSON asked whether they are giving the federal
government artificially inflated numbers with regard to families
that do not participate, and questioned whether the state has
any liability for over-reporting.
MS. TESHNER advised that the state is not providing artificially
inflated numbers to the USDA, as it bases its numbers on the
average of the last two school years. While they will receive a
set authorization from the federal government, they are only
billed for what the state paid for actual claims, she explained.
1:46:34 PM
SENATOR BISHOP surmised that the increase is due to the
population growth of school aged children in Anchorage, and
noted it is reimbursable up to $8.7, but there is nothing to say
that the state will bill $8.7 million.
MS. TESHNER responded that Senator Bishop is correct, in that
they are asking up to $8.7 million, but all of the authority may
not be used as it is based upon actuals.
1:48:07 PM
LACEY SANDERS, Fiscal Analyst, Legislative Finance Division,
Alaska State Legislature, stated that there are no general funds
required and no additional staff is needed regarding RPL 05-6-
0111. The Legislative Finance Division finds no technical
issues, she advised.
1:49:07 PM
REPRESENTATIVE OLSON made a motion and asked unanimous consent
that the committee approve RPL 05-6-0111, Department of
Education and Early Development, Child Nutrition Programs for
$8,700,000 Federal Receipts, Fund Code 1002, as an operating
budget item.
A roll call vote was taken. Representatives Kito, Olson,
Thompson, Pruitt and Hawker, and Senators Bishop, Hoffman, and
MacKinnon voted in favor of RPL 05-6-0111. Therefore, RPL 05-6-
0111 was approved by the Legislative Budget & Audit Committee by
a vote of 8 to 0.
^EXECUTIVE SESSION
EXECUTIVE SESSION
1:50:55 PM
CHAIR HAWKER announced the next order of business would be an
executive session.
1:51:09 PM
REPRESENTATIVE OLSON moved and asked unanimous consent, that the
Legislative Budget and Audit Committee enter executive session
under Uniform Rule 22(b)(1) and (b)(3), as the meeting will
involve a discussion of matters, that the immediate knowledge
of, would adversely affect the finances of a government unit and
under AS 24.20.301 for the discussion of confidential audit and
performance review reports.
CHAIR HAWKER announced that seeing no objection, it was so
ordered.
1:51:54 PM
The committee took an at-ease from 1:51 p.m. to 4:03 p.m.
4:03:28 PM
CHAIR HAWKER brought the committee back to order at 4:03 p.m.
Representatives Kito, Olson, Thompson, and Hawker, and Senators
Bishop, Hoffman and MacKinnon were present at the call to order.
IRIS AUDIT PROCUREMENT
4:05:32 PM
REPRESENTATIVE OLSON made a motion that the Legislative Budget
and Audit Committee authorize the Legislative Auditor to award
and enter into a contract for specialized information technology
expertise to review the State's Integrated Resource Information
System (IRIS) in an amount not to exceed $400,000. There being
no objection, it was so ordered.
^FINAL AUDIT REPORTS
FINAL AUDIT REPORTS
4:06:18 PM
REPRESENTATIVE OLSON made a motion that the following final
audits be released to the public: Division of Alaska Pioneer
Homes, and Big Game Commercial Services Board, Sunset. There
being no objection, it was so ordered.
^PERFORMANCE REVIEW REPORTS
PERFORMANCE REVIEW REPORTS
4:06:45 PM
REPRESENTATIVE OLSON made a motion that the committee release
the following final Department of Health and Social Services
performance review reports to the public: Behavioral Health,
Long-Term Care, and Administrative Structure.
CHAIR HAWKER emphasized, for clarity, that there are three
separate physical reports.
CHAIR HAWKER objected and commented that these are significant
performance reviews of a significant agency that are of a great
deal of interest to many people. He noted there are some
controversial findings in the report, and "a lot of meat to
digest." He asked Kris Curtis, Legislative Auditor, to explain
the process as the reports are released to be certain the
information is available to legislators, the House and Senate
Finance Committees, and the public at-large.
4:07:59 PM
KRIS CURTIS, Legislative Auditor, Legislative Finance Division,
Alaska State Legislature, stated that subsequent to the
committee's release, the full reports and summaries will be
posted on the web site. However, she noted, the reports are
full of findings and recommendations in that each report is over
200 pages. She encouraged all legislators to have their budget
knowledgeable staff review these reports because there can
certainly be other information in them of particular interest to
specific legislators that may not be included within the
summaries. She explained that the summaries will be posted on
the web site to help guide people in reviewing the reports, and
[the division] will prepare a summary of potential legislation
that legislators may be interested in sponsoring that are
suggested within the reports. These reports, she emphasized,
are the opinion and product of the contractors hired by "us" and
are independent, objective reviews by experts in the field. She
said her expectation is that within the next day or two, emails
with the above information will be directed to every legislator
and co-chairs of the House and Senate Finance Committees.
MS. CURTIS, in response to Chair Hawker, advised that her office
will send out a public press release regarding the availability
of the audit. She offered that hard copies will be sent to the
chairs of the House and Senate Finance Committees, chairs of the
House and Senate Health and Social Services Committees, and
chairs of the House and Senate Finance Committees' subcommittees
for health and social services.
4:10:37 PM
CHAIR HAWKER asked that the very voluminous reports be posted on
the web site with a reduced .pdf size.
MS. CURTIS advised they would also attempt to include links
within the summaries allowing people to drill down into the
voluminous reports more efficiently.
4:11:09 PM
SENATOR MACKINNON asked Ms. Curtis how in depth documentation
was performed with regard to Medicaid waivers for 1915(i) and
(k), and whether the reports highlight the state's options or
potential risks on the waivers.
CHAIR HAWKER advised Senator MacKinnon that Ms. Curtis is not
qualified to respond.
4:11:50 PM
MS. CURTIS advised that the reports are not public at this point
and she must wait until they are released before addressing
their content.
CHAIR HAWKER asked Senator MacKinnon to withdraw her question
until the vote was concluded.
SENATOR MACKINNON agreed.
4:12:11 PM
CHAIR HAWKER advised that the question before committee is the
release of the Department of Health and Social Services
performance review reports selectively identified for the
Behavioral Health Division, Long-Term Care Activities, and
Administrative Structure of the agency. There being no
objection, it was so ordered.
4:12:38 PM
SENATOR MACKINNON pointed to Ross Alexander, Legislative Audit
Division, and the Medicaid waivers 1915(i) and (k), and advised
she has knowledge as to what 1915(i) and (k) obligates the state
to do. She asked Mr. Alexander whether the report currently
released contains any of the negative consequences or accurately
reflects a comparison of the state's potential risks for those
two waiver programs.
4:13:36 PM
ROSS ALEXANDER, Legislative Audit Division, Alaska State
Legislature, advised that the reports themselves do not go in
depth into risk. They do include a disclaimer; however, that
the reports themselves are providing a recommendation on how the
state can shift costs to the federal government and collaborate
with the federal government on ways to lower state expenditures.
He offered that the reports recognize that in order to move
forward on any of the recommendations, the state will need to
seriously consider the risks. Although, he remarked, they do
not go in depth into the risks themselves, they do not make a
blanket "this is a good idea" on moving forward on any of the
options or waivers without further study.
4:14:23 PM
SENATOR MACKINNON inquired whether it is true the Department of
Health and Social Services did not comply with the request to
show the committee a ten percent reduction anywhere.
MR. ALEXANDER responded that she is correct, in that the
proposed list of reductions put forth by the department is a
list of totally and approximately 4.5 percent of its general
fund budget. He explained that it is part of Governor Bill
Walker's amended budget put out last year. Therefore, he
responded, it is not in full compliance with the requirements of
the statute.
SENATOR MACKINNON commented to the committee that the committee
has gone through two audit cycles, with two different
departments, and it has not received the results the committee
had hoped for under passage of the bill. She said she wondered
whether the committee should have a discussion on the efforts,
as it moves forward, and investing "this much money" to
understand what the department is doing, and having departments
refuse to comply with Alaska State Statute.
4:16:12 PM
CHAIR HAWKER noted that Senator MacKinnon echoed his sentiments
exactly. He asked whether there were any other committee
concerns for the good of the order. Hearing and seeing none he
thanked the committee members for their attendance.
4:17:08 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
4:17 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Agenda .pdf |
JBUD 12/7/2015 1:30:00 PM |
|
| RPL Packet.pdf |
JBUD 12/7/2015 1:30:00 PM |