Legislature(2025 - 2026)SENATE FINANCE 532
02/05/2026 05:15 PM House LEGISLATIVE BUDGET & AUDIT
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| Audio | Topic |
|---|---|
| Start | |
| Approval of Agenda | |
| Approval of Minutes | |
| Top Audit Issues | |
| Consideration of Contract Amendment: Alaska Center for Energy and Power (acep) | |
| Executive Session | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
February 5, 2026
5:17 p.m.
MEMBERS PRESENT
Senator Elvi Gray-Jackson, Chair
Representative Zack Fields, Vice Chair
Senator Cathy Giessel
Senator Bill Wielechowski
Representative Neal Foster
Representative Andy Josephson
Representative Chuck Kopp
Representative Julie Coulombe
Senator Scott Kawasaki (alternate)
Representative Bryce Edgmon (alternate)
MEMBERS ABSENT
Senator Bert Stedman
Senator Lyman Hoffman
OTHER LEGISLATORS PRESENT
Senator James Kaufman
COMMITTEE CALENDAR
APPROVAL OF AGENDA
APPROVAL OF MINUTES
TOP AUDIT ISSUES
CONSIDERATION OF CONTRACT AMENDMENT: ALASKA CENTER FOR ENERGY
AND POWER (ACEP)
EXECUTIVE SESSION
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: Presented the corrective actions for FY 25
top audit issues.
JEFF STEPP, Staff
Senator Elvi Gray-Jackson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave background information on the Alaska
Center for Energy and Power contract amendment.
ACTION NARRATIVE
5:17:32 PM
CHAIR GRAY-JACKSON called the Legislative Budget and Audit
Committee meeting to order at 5:17 p.m. Representatives Foster,
Josephson, Kopp, Coulombe, Edgmon (alternate), and Fields and
Senators Wielechowski, Giessel, Kawasaki, and Gray-Jackson were
present at the call to order. Also present was Senator Kaufman.
^APPROVAL OF AGENDA
APPROVAL OF AGENDA
5:18:48 PM
CHAIR GRAY-JACKSON announced that the first order of business
would be approval of the agenda.
REPRESENTATIVE FIELDS moved that the Legislative Budget and
Audit Committee approve the agenda. There being no objection,
the agenda was approved as presented.
^APPROVAL OF MINUTES
APPROVAL OF MINUTES
5:19:09 PM
CHAIR GRAY-JACKSON announced that the next order of business
would be approval of the minutes.
REPRESENTATIVE FIELDS moved that the Legislative Budget and
Audit Committee approve the minutes of the two meetings on
November 19, 2025, and the meeting on January 20, 2026. There
being no objection, the minutes were approved.
^TOP AUDIT ISSUES
TOP AUDIT ISSUES
5:19:26 PM
CHAIR GRAY-JACKSON announced that the next order of business
would be a summary of the corrective actions addressing the
Division of Legislative Audit's top audit issues for fiscal year
2025 (FY 25)
5:19:52 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, referred to a document that
displayed a matrix titled, "FY 25 Top Audit Issues - Status of
Corrective Action" [included in the committee file]. She
recalled that during a prior committee meeting she was directed
to request the status of corrective actions from the various
state departments for the 12 top audit issues, which are
summarized in the aforementioned document. The plan today is to
determine whether the findings should be forwarded to other
legislative committees for follow up, as addressed in the last
column of the matrix, "Next Action." The issues ripe for
further legislative consideration are audit issue 6, concerning
the Department of Military & Veterans' Affairs (DMVA) and the
Department of Health (DOH) not working together to bill $279.8
million of federal disaster grant expenditures in a timely
manner, which resulted in lost investment earnings; audit issue
7, related to the Department of Corrections (DOC) overspending
their FY 24 budget; audit issue 8, related to unaddressed budget
shortfalls in three departments; audit issue 9, the Alaska
International Airport's (AIA) struggle to produce audited
financial statements for inclusion in the state's financial
statements; audit issue 10, concerning the Division of Public
Assistance's (DPA) material internal control deficiencies and
material noncompliance with several federal programs; and audit
issue 12, a special audit of the Office of Children's Services
(OCS) noncompliance with foster care reform. She said she would
continue to work with the chair on formally referring these to
the legislative committees identified in the matrix.
5:22:00 PM
REPRESENTATIVE KOPP asked whether the money for the Federal
Emergency Management Agency (FEMA) disaster grant associated
with audit issue 6 was eventually recovered.
MS. CURTIS stated that it's part of an ongoing audit. She
shared her understanding that the department has finally billed
for the revenues; nonetheless, it would be a great item to
follow up on in the budget committees to figure out the timing.
She reported that as noted in the finding, there was an
estimated $1.3 million of lost investment earnings per month.
REPRESENTATIVE KOPP asked how many months have lapsed.
MS. CURTIS responded that the finding corresponds to the end of
FY 24 and now it is the middle of FY 26. She reiterated that
determining when the department billed for the revenues would be
a good follow up.
^CONSIDERATION OF CONTRACT AMENDMENT: ALASKA CENTER FOR ENERGY
AND POWER (ACEP)
CONSIDERATION OF CONTRACT AMENDMENT: ALASKA CENTER FOR ENERGY
AND POWER (ACEP)
5:23:10 PM
CHAIR GRAY-JACKSON announced that the next order of business
would be a consideration of a contract amendment for the Alaska
Center for Energy and Power (ACEP).
REPRESENTATIVE FIELDS moved that the Legislative Budget and
Audit Committee authorize the legislature to add $100,000 to the
existing ACEP reimbursable service agreement (RSA), for a total
"not to exceed" amount of $150,000; and to extend the completion
date of the RSA from June 30, 2026, to June 30, 2027.
CHAIR GRAY-JACKSON objected for purposes of discussion.
5:24:01 PM
JEFF STEPP, Staff, Senator Elvi Gray-Jackson, Alaska State
Legislature, offered the following remarks on the ACEP contract
amendment [original punctuation provided]:
For background, the Committee first authorized a
reimbursable service agreement with the Alaska Center
for Energy and Power, or ACEP, at its February 26,
2025, meeting, for an amount not to exceed $50,000, to
provide independent, expert analysis on energy-related
topics to support legislative decision-making.
At the June 30 meeting, the Chair noted that the
contract period would be extended into the following
fiscal year, with no increase to the original not-to-
exceed amount, and if any additional funding would be
needed in the future, a request would be brought back
to the Committee for approval during the forthcoming
session.
The current request, reflected in the joint letter
from Representative Fields and Senator Giessel,
explains that ACEP completed multiple technical tasks
in 2025, including original research, policy briefs,
and testimony on issues such as LNG import facilities,
Railbelt transmission regulation, battery storage,
load growth projections for the Railbelt, and clean
energy project licensing and permitting and more.
Legislators anticipate continued or increased --
demand for that support this session, throughout the
interim and into 2027.
Just as a reminder, ACEP provided a comprehensive
report summarizing the work they have completed under
this contract. We shared a link to that report with
members by email on January 21, and it's also posted
on the LB&A Committee website for easy reference by
legislators and the public.
It is common practice to carry an LB&A Committee
contract through the end of the fiscal year,
overlapping with a new legislature, so consultants are
ready to go when session starts, without any delay.
Accordingly, this request is to add $100,000 to the
existing agreement for a total not-to-exceed amount
of $150,000 and extending the completion date from
the end of the current fiscal year to June 30, 2027,
to allow ACEP to continue providing analysis,
briefings, and expert testimony as requested by the
Legislature.
5:26:37 PM
SENATOR GIESSEL said she strongly supports the contract
extension and the funding for it. She stated that she's
beginning her tenth year chairing the Senate Resources Standing
Committee and ACEP has been indispensable in providing expert
testimony and analysis.
CHAIR GRAY-JACKSON removed her objection. There being no
further objection, the contract amendment was approved.
^EXECUTIVE SESSION
EXECUTIVE SESSION
5:27:27 PM
CHAIR GRAY-JACKSON announced that the next order of business
would be executive session.
REPRESENTATIVE FIELDS moved that the Legislative Budget and
Audit Committee go into executive session under Uniform Rule
22(b)(1), discussion of matters, the immediate knowledge of
which would adversely affect the finances of a government unit;
and Uniform Rule 22(b)(3), discussion of a matter that may, by
law, be required to be confidential. He asked that the
following persons remain in the room or online: Kris Curtis,
Legislative Auditor, and necessary staff; Emily Nauman and Megan
Wallace, Legislative Legal Services; Karin Jones, Partner at
Stoel Rives; Matt Armstrong, Baker Hughes; Zachary Lawhorne,
Legislative Information Office moderator; any legislators not on
the committee; and staff of legislators on the committee. There
being no objection, it was so ordered.
5:28:36 PM
The committee took an at-ease from 5:28 p.m. to 6:09 p.m. for
the purpose of executive session.
6:09:40 PM
CHAIR GRAY-JACKSON called the Legislative Budget and Audit
Committee meeting back to order at 6:09 p.m. Representatives
Kopp, Coulombe, Edgmon (alternate), and Fields and Senators
Wielechowski, Giessel, Kawasaki, and Gray-Jackson were present
at the call to order. Also present was Senator Kaufman.
6:10:04 PM
CHAIR GRAY-JACKSON announced that during executive session,
topics listed on the agenda were discussed and the committee
would be taking action related to each of them. The first
concerns the contract amendment for outside counsel related to a
personnel matter. She noted that due to the confidential nature
of personnel matters, the committee would not be providing
public comment on the specifics at this time.
6:10:31 PM
REPRESENTATIVE FIELDS moved that the Legislative Budget and
Audit Committee approve an amendment to the Division of
Legislative Audit's existing contract with Stoel Rives LLP,
dated October 10, 2025, to increase the contract amount by
$100,000 for a total amount not to exceed $295,000 for legal
services relating to a personnel matter. There being no
objection, it was so ordered.
6:11:09 PM
REPRESENTATIVE FIELDS moved that the Legislative Budget and
Audit Committee authorize the chair to amend the "Exclusivity
and Non-Conflict of Interest Clause," and any necessary related
provisions, of the Committee's current contract with
GaffneyCline.
CHAIR GRAY-JACKSON objected for purposes of discussion to
explain the intent behind the motion. She offered the following
remarks [original punctuation provided]:
I take questions about the independence of the
Legislature's consultants very seriously. For that
reason, we asked Legislative Legal Services for a
formal review, which is included in the committee
packet and posted to BASIS; One of GaffneyCline's
consultants, Mr. Fulford, addressed this matter in
testimony before both the House and Senate Resources
Committees; and we received a detailed written
explanation from GaffneyCline and its parent company,
Baker Hughes, outlining the contractual obligations,
confidentiality requirements, and internal firewalls
they use to ensure their advisory work remains
independent and insulated from any commercial
activities this letter was distributed to members
and placed on BASIS for the public.
After reviewing all that information and absent
evidence of any actual conflict affecting the
Committee's work, I am comfortable that the
consultants' analysis remains objective and
professionally independent.
At the same time, I think it is reasonable and prudent
for us to clarify our contract language so there is no
ambiguity going forward. The motion before us simply
authorizes the chair to amend the "Exclusivity and
Non-Conflict of Interest Clause" to better reflect the
current circumstances and to protect the Legislature's
interests. To me, that is a practical housekeeping
step not a finding of wrongdoing and a sensible
way to acknowledge the concern, strengthen our
safeguards, and move forward.
Finally, I want to be clear about roles. Consultants
provide advice; they do not make decisions. The
Legislature retains full authority to evaluate that
advice and determine what actions are in the best
interests of Alaskans. With that understanding, I
support this motion as a reasonable resolution, and
I'm happy to hear any comments from members.
6:13:34 PM
SENATOR WIELECHOWSKI said he appreciates the public discussion
on this matter. From personal experience, he pointed out that
GaffneyCline has been an advisor to the state for 20 years and
has always provided valuable, objective advice. In particular,
he recalled GaffneyCline's contribution to the oil tax
discussions in 2007, during which time their clients were
producers and GaffneyCline still issued advice to the state that
came at a cost to these clients. They were objective and
provided the answers to the questions that were asked, he said.
He reminded the committee that their owner is Baker Hughes who
has an interest in the project; nonetheless, he opined that
GaffneyCline's advice would be useful.
6:14:45 PM
VICE CHAIR FIELDS stated that the Legislative Budget and Audit
Committee has approved consultant contracts for Pegasus Global
Holdings, Inc. and ACEP as well, so its valuable to have
multiple perspectives and analyze them on their merits. He
agreed with Senator Wielechowski, and reiterated his belief that
multiple well-informed perspectives will be important for the
public.
CHAIR GRAY-JACKSON withdrew her objection. There being no
further objection, it was so ordered.
6:16:05 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
6:16 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| LBAC Agenda 02.05.2026 FINAL.pdf |
JBUD 2/5/2026 5:15:00 PM |
|
| Top Audit Issues FY 25 Part 1 (from the 11.19.25 meeting).pdf |
JBUD 2/5/2026 5:15:00 PM |
|
| Top Audit Issues FY 25 Part 2 - Corrective Action Summary (Legal-size paper).pdf |
JBUD 2/5/2026 5:15:00 PM |
|
| Joint Letter re ACEP Contract Amendment 01.28.26.pdf |
JBUD 2/5/2026 5:15:00 PM |
|
| Legal Services Memo re Contractual Conflicts of Interest GaffneyCline (25-202boo).pdf |
JBUD 2/5/2026 5:15:00 PM |
|
| 2026-02-04 Final_ BakerHughes Letter to AK LB&A_Rev3.pdf |
JBUD 2/5/2026 5:15:00 PM |