Legislature(2023 - 2024)ADAMS 519
05/09/2024 05:00 PM House LEGISLATIVE BUDGET & AUDIT
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| Audio | Topic |
|---|---|
| Start | |
| Approval of Minutes | |
| Executive Session | |
| Other Committee Business | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
May 9, 2024
5:07 p.m.
MEMBERS PRESENT
Representative Ben Carpenter, Chair
Senator Bert Stedman, Vice Chair
Representative Sarah Vance
Representative Frank Tomaszewski
Representative Andy Josephson
Senator Bill Wielechowski
Senator James Kaufman
Senator Scott Kawasaki
Representative Mike Cronk (alternate)
Senator Click Bishop (alternate)
MEMBERS ABSENT
Representative DeLena Johnson
Senator Lyman Hoffman
OTHER LEGISLATORS PRESENT
Representative Louise Stutes
Representative Sara Hannan
Senator Robert Myers
Senator Cathy Giessel
Senator David Wilson
COMMITTEE CALENDAR
APPROVAL OF MINUTES
EXECUTIVE SESSION
OTHER COMMITTEE BUSINESS
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
KRIS CURTIS, Legislative Auditor
Legislative Audit Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Spoke to the FY 23 single audit release and
the Alaska Railroad Corporation audit request.
SENATOR ROBERT MYERS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the Alaska Railroad Corporation
Audit Request.
ACTION NARRATIVE
5:07:06 PM
CHAIR BEN CARPENTER called the Legislative Budget and Audit
Committee meeting to order at 5:07 p.m. Representatives Vance,
Tomaszewski, Josephson, Cronk (alternate), and Carpenter and
Senators Wielechowski, Kaufman, Kawasaki, Bishop (alternate),
and Stedman were present at the call to order.
^APPROVAL OF MINUTES
APPROVAL OF MINUTES
5:07:51 PM
CHAIR CARPENTER announced that the first order of business would
be the approval of minutes.
5:07:56 PM
SENATOR STEDMAN moved that the Legislative Budget and Audit
Committee approve the minutes for the April 4, 2024, and May 7,
2024, meetings, as presented. There being no objection, the
minutes were approved.
^EXECUTIVE SESSION
EXECUTIVE SESSION
5:08:18 PM
REPRESENTATIVE CARPENTER announced that the next order of
business would be executive session.
5:08:27 PM
SENATOR STEDMAN moved that the Legislative Budget and Audit
Committee go into executive session under Uniform Rule 22(b)(3)
for the discussion of matters that may, by law, be required to
be confidential. He asked that the following persons remain in
the room or online: Emily Nauman, legislative services
director, and necessary staff; Kris Curtis, legislative auditor,
and necessary staff; any legislators not on the committee; staff
of legislators on the committee; and Senate Finance Committee
staff. There being no objection, it was so ordered.
5:09:33 PM
The committee took an at-ease from 5:09 p.m. to 5:25 p.m. for
the purpose of executive session.
5:25:59 PM
CHAIR CARPENTER called the Legislative Budget and Audit
Committee meeting back to order at 5:25 p.m. Representatives
Vance, Tomaszewski, Cronk (alternate), and Carpenter and
Senators Wielechowski, Kaufman, Kawasaki, Bishop (alternate),
and Stedman were present at the call back to order.
5:26:22 PM
REPRESENTATIVE CARPENTER announced that during the executive
session, the committee discussed the single audit release for FY
23.
5:26:48 PM
SENATOR KAUFMAN explained that [the committee] had initiated a
top-audit finding resolution process to try to reduce the
quantity of findings and clear the most important ones from the
books. He asked Ms. Curtis to provide an update on that
process.
5:27:19 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, explained that once the audit
is released as a final public document, the [Legislative Audit
Division] identifies top concerns from the single audit and any
performance audits issued throughout the year. The concerns are
presented to the Legislative Budget and Audit Committee and sent
to the state departments with a request for their status in
correcting those top audit findings. The committee then decides
whether the findings require additional follow up during
legislative session.
5:28:17 PM
SENATOR STEDMAN moved that the Legislative Budget and Audit
Committee approve the audit release of the FY 23 Single Audit.
There being no objection, it was so ordered.
^OTHER COMMITTEE BUSINESS
OTHER COMMITTEE BUSINESS
5:28:42 PM
CHAIR CARPENTER announced that the final order of business would
be the Alaska Railroad Corporation (ARRC) audit request from
Senator Myers.
5:28:59 PM
The committee took an at-ease from 5:28 p.m. to 5:29 p.m.
5:29:21 PM
CHAIR CARPENTER asked Senator Myers to explain the ARRC audit
request.
5:29:44 PM
SENATOR ROBERT MYERS, Alaska State Legislature, explained that
shortly after he was elected, he was made aware of some issues
with ARRC and its usage by constituents. He reported that a
number of elected officials across the state raised similar
issues regarding land use and rights-of-way. He said he did not
have a problem with railroad operations or the corporation's
finances; nonetheless, he said he was trying to find information
on ARRC's land, its value, and how much money is made off the
rights-of-way and land not directly related to railroad
operations.
SENATOR STEDMAN asked whether ARRC had been nonresponsive to
prior requests for information.
SENATOR MYERS shared his belief that his constituents had been
stonewalled. He said ARRC put out just enough information to
answer requests without satisfying concerns. He recalled that
over the past few years, bills had been introduced to request
audits of this type, but the corporation stymied that
legislation. He concluded that a special audit would be another
way of getting that information.
5:32:26 PM
SENATOR STEDMAN pointed out that often, information can be
obtained from a department by request. He asked whether the
inquiries to ARRC were made by Senator Myers or other elected
officials, as opposed to constituents. In addition, he asked
Ms. Curtis whether ARRC had refused to answer real estate-
related inquiries regarding leases.
5:33:48 PM
MS. CURTIS sought to clarify whether Senator Stedman was asking
whether she had reached out to ARRC with these specific
questions.
STEDMAN STEDMAN said he was asking whether these inquiries had
been made to ARRC and whether the corporation refused to answer
them. In addition, he asked how long it would take the
Legislative Audit Division to conduct an audit and whether
background work had been performed.
MS. CURTIS stated that the division's backlog was looking
"pretty good" right now with two audits "in the hopper." She
added that she had helped craft the language in the Alaska
Railroad Corporation Audit Request memorandum [included in the
committee packet] by reviewing ARRC's outside audit.
5:35:08 PM
SENATOR STEDMAN asked whether ARRC had been unresponsive to a
written request from Senator Myers.
SENATOR MYERS clarified that he did not send a written request
to ARRC. All requests had been made in person or over the phone
in an attempt to convey his constituents' concerns. He
reiterated his opinion that ARRC had effectively been
stonewalling.
SENATOR STEDMAN opined that an audit should be the last route
because it takes time and costs money. He suggested that
Senator Myers write the corporation a letter that includes a
series of questions and an indication that failure to respond
would result in an audit request. He shared his belief that
this would be an easier way for ARRC to answer the senator's
questions.
5:37:30 PM
SENATOR KAWASAKI agreed with Senator Stedman. He speculated
that reporting on ARRC's non-operating revenues by source should
be existing information that's either been in an audit or posted
through the Federal Railroad Administration (FRA) or Federal
Transit Administration (FTA).
MS. CURTIS assured the committee that nothing in the audit
request was available through the outside audit.
SENATOR KAWASAKI opined that the process should start with a
written request for information and if there's no response, the
committee could pursue something more directly.
5:38:52 PM
SENATOR BISHOP agreed with the two previous speakers. He
advised that the Senate Transportation Standing Committee could
take the lead [on the written request] and build a track record.
If there's no response, the Interior delegation could send the
same letter. If both options fail, the Legislative Budget and
Audit Committee [could proceed with the audit request].
REPRESENTATIVE VANCE noted that the ARRC had appeared before the
House Transportation Standing Committee numerous times, and as
vice chair, she was not satisfied with their answers, which were
vague. She said she could see why Senator Myers was asking for
more detailed answers to his questions. She reiterated that
ARRC had provided numerous presentations to the House
Transportation Standing Committee with beautiful photos and
large numbers, but no detail. For that reason, she said she was
in agreement with the special audit request.
5:40:57 PM
SENATOR STEDMAN asked when the Legislative Budget and Audit
Committee would meet next.
CHAIR CARPENTER replied that the next meeting had not been
scheduled.
SENATOR STEDMAN suggested that Senator Myers could send a formal
written request and if the corporation does not respond, the
audit could be taken up at the next Legislative Budget and Audit
Committee meeting. He added that any sensitive questions or
concerns could be discussed in executive session.
CHAIR CARPENTER asked whether the third bullet point in the
Alaska Railroad Corporation audit request memorandum could be
drafted into a question to the corporation.
MS. CURTIS said, "Certainly." She noted that there is a
difference between [the information received from the
commission] and the information gathered from an audit. She
explained that the committee would want to tie the commission's
responses to their audited financial statements to ensure that
the information is complete and accurate.
5:43:07 PM
SENATOR KAWASAKI asked how much time and money this audit would
require.
MS. CURTIS estimated 1,200 hours.
CHAIR CARPENTER asked for a projected timeline if the special
audit were authorized today.
MS. CURTIS stated that the audit could be started in the spring
of 2025 and completed by the fall.
5:43:49 PM
SENATOR WIELECHOSWKI, referencing bullet point number two, asked
how granular the division would go in preparing a schedule of
ARRC's assets and whether it would include pens, pencils, and
paper clips, for example.
MS. CURTIS explained that the categories would include asset
classes such as land, real property, road and roadway
structures, equipment, right-of-way/easements, and leases.
5:44:38 PM
CHAIR CARPENTER said it seems that the information could be
requested without an audit. He asked how the auditor would know
whether the information provided was complete.
MS. CURTIS indicated that the information would be itemized and
tied to ARRC's outside audit, which includes information about
various assets.
CHAIR CARPENTER asked whether the same assessment could be
conducted without an audit.
MS. CURTIS answered, "To some extent." Without an actual audit,
there's nothing to compel ARRC to cooperate.
5:45:57 PM
SENATOR BISHOP suggested that Senator Myers lead with a letter
from the Interior delegation.
CHAIR CARPENTER asked whether Senator Myers would be willing to
draft a letter through the Legislative Budget and Audit
Committee with the hope that it would carry more weight.
SENATOR MYERS said he would be interested and would like to
include other legislators who have expressed similar concerns.
5:47:18 PM
SENATOR STEDMAN pointed out that if the committee "plays
hardball" with an audit, it would be one year from January until
action could be taken. He emphasized the effectiveness of
asking questions during the budgetary process, indicating that
other mechanisms were available, such as the House
Transportation Standing Committee, the Senate Transportation
Standing Committee, and both Finance Committees. He reiterated
his belief that a direct letter would motivate ARRC to answer
questions, which would be much easier than sitting in front of
the Finance Committee.
CHAIR CARPENTER stated that if it's the will of the committee, a
letter could be sent out. Following the letter, ARRC could come
before the Legislative Budget and Audit Committee within 90 days
to discuss the results of the letter.
5:48:54 PM
CHAIR CARPENTER said he would not seek the will of the committee
at this time. He explained that his office would work with
Senator Myers to draft a letter and move forward in that
direction.
5:49:26 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
5:49 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Railroad Audit Request.pdf |
JBUD 5/9/2024 5:00:00 PM |
Alaska Railroad Corporation Audit Request |