Legislature(2017 - 2018)SENATE FINANCE 532
01/27/2017 11:30 AM Senate LEGISLATIVE BUDGET & AUDIT
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Election of the Chair | |
| Election of the Vice Chair | |
| Approval of Minutes | |
| Legislative Finance Division | |
| Legislative Audit Division | |
| Executive Session | |
| Consultant Contracts | |
| 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
January 27, 2017
11:32 a.m.
MEMBERS PRESENT
Senator Gary Stevens, Chair
Senator Anna MacKinnon
Senator Cathy Giessel
Senator Click Bishop (via teleconference)
Senator Lyman Hoffman
Senator Natasha von Imhof (alternate)
Representative Andy Josephson, Vice Chair
Representative Scott Kawasaki
Representative Paul Seaton
Representative Ivy Spohnholz
Representative Jennifer Johnston
Representative Dan Ortiz (alternate)
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
ELECTION OF THE CHAIR
ELECTION OF THE VICE CHAIR
APPROVAL OF MINUTES
LEGISLATIVE FINANCE DIVISION
LEGISLATIVE AUDIT DIVISION
EXECUTIVE SESSION
CONSULTANT CONTRACTS
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DAVID TEAL, Legislative Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information on the role of the
Legislative Finance Division.
KRISTIN CURTIS, Legislative Auditor
Legislative Audit Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information on the role of the
Legislative Audit Division.
ACTION NARRATIVE
11:32:55 AM
SENATOR MACKINNON called the Legislative Budget and Audit
Committee meeting to order at 11:32 a.m. Senators Stevens,
MacKinnon, Giessel, Hoffman, Bishop (via teleconference), and
Von Imhof (alternate), and Representatives Josephson, Kawasaki,
Seaton, and Johnston were present at the call to order.
Representatives Spohnholz and Ortiz (alternate) arrived as the
meeting was in progress.
^Election of the Chair
Election of the Chair
11:33:45 AM
SENATOR MACKINNON announced that the first order of business
would be nominations for the chairman of the Legislative Budget
and Audit Committee.
SENATOR HOFFMAN nominated Senator Gary Stevens as chairman of
the Legislative Budget and Audit Committee for the 30th Alaska
State Legislature, and he asked that nominations be closed.
There being no objection, it was so ordered.
11:34:22 AM
CHAIR STEVENS offered opening comments, explained the role of
the alternates on this committee, and announced that the next
order of business would be nominations for the vice chair.
^Election of the Vice Chair
Election of the Vice Chair
11:35:26 AM
REPRESENTATIVE SEATON nominated Representative Andy Josephson as
vice chairman of the Legislative Budget and Audit Committee for
the 30th Alaska State Legislature, and he asked that nominations
be closed. There being no objection, it was so ordered.
^Approval of Minutes
Approval of Minutes
11:35:51 AM
CHAIR STEVENS announced that the next order of business would be
approval of the minutes.
11:36:04 AM
REPRESENTATIVE JOSEPHSON made a motion to approve the minutes of
the Legislative Budget and Audit Committee of January 13, 2017.
There being no objection, the minutes from the meeting of
January 13, 2017 were approved.
^Legislative Finance Division
Legislative Finance Division
11:36:24 AM
CHAIR STEVENS announced that the next order of business would be
a presentation from David Teal, Legislative Fiscal Analyst. He
asked that Mr. Teal explain the interaction between the
Legislative Finance Division and the committee.
11:36:48 AM
DAVID TEAL, Legislative Fiscal Analyst, Legislative Finance
Division, Alaska State Legislature, introduced himself as the
director of the division and explained that the division was "a
non-partisan group of fiscal analysts." He shared that the
division's primary interaction with the committee would be for
revised program - legislative (RPLs), which he described as
interim requests for additional authorization to spend money,
mostly federal receipts, although this could also include other
funds. He relayed that the administration would ask the
committee for the authority to spend any additional funds, and
that the Legislative Finance Division would review those
requests, send them to the committee, and post them on the
website. He reported that he would typically review these RPLs
with the committee at the committee meeting. He noted that the
division was also available to the full Legislature upon
request. In response to Chair Stevens, he estimated that he had
been in his position for 20 years.
^Legislative Audit Division
Legislative Audit Division
11:38:55 AM
CHAIR STEVENS announced that the next order of business would be
a presentation from Kris Curtis, Legislative Auditor. He asked
that Ms. Curtis explain the interaction between the Legislative
Audit Division and the committee.
11:39:13 AM
KRISTIN CURTIS, Legislative Auditor, Legislative Audit Division,
Alaska State Legislature, explained her role as the auditor,
noting that she had been with the division for almost 25 years,
and in her current role for more than 5 years. She introduced
other members of her staff, noting that her division operated as
the fiscal staff to the Legislative Budget and Audit Committee,
and maintained the committee website. She directed attention to
the memo [Included in members' packets] which outlined the
responsibilities of the committee, and declared that the main
function of the committee was to provide the legislature with
fiscal analysis, budget reviews, and audits. She relayed that
statutes gave the committee several powers which included the
broad power to review revenue projections, state agency
appropriation requests and expenditure of state funds, and the
fiscal policy and procedures of the state government. She
stated that the committee could make recommendations to the
governor and the legislature, as appropriate. She declared that
statutes also gave the committee oversight responsibilities,
and, in some instances, designated the committee as the primary
representative of the legislature. She pointed out that the
aforementioned memo summarized some of the lesser known powers
and responsibilities, and noted that, over the years, the
committee had exercised these powers to different degrees at the
discretion of the chair. She introduced the Legislative Budget
and Audit Committee handbook [Included in members' packets]
which detailed the authorizing statutes for the committee and
identified the two permanent staff agencies, the Legislative
Audit Division and the Legislative Finance Division. As
provided for in statute, the committee was authorized to adopt
rules for the conduct of its business and procedures per its
functions. She directed attention to page 39 of the handbook
which listed the formal rules as well as the dates of adoption.
She offered her belief that the more significant areas included
the approval and release of the audit reports and approval of
the audit requests, as well as contracts and reimbursement for
travel.
MS. CURTIS discussed the confidential report release procedures
outlined on page 47 of the handbook. She emphasized that
statute made the audit and performance review process
confidential and that it was important for committee members and
staff to take the necessary precautions to protect the
confidentiality of these documents. She proclaimed that the
reports should not be copied or distributed. She explained that
the reports were first brought to the committee as a preliminary
report and distributed for discussion during the executive
session at a committee meeting. At this time, she would review
the recommendations and conclusions presented in the report.
When the committee comes out of executive session, it would vote
whether to release the report to the agency being reviewed for
that agency's formal comments. These formal comments would be
forwarded to Ms. Curtis for review, and would remain
confidential. She would add these comments to the preliminary
report and return it to the committee as a final report, at
least two days prior to the Legislative Budget and Audit
Committee meeting. These reports would be delivered in a sealed
envelope, marked Confidential, and would be printed on blue
paper in order to distinguish this confidential document from
other documents. She stated that these reports would then be
discussed during an executive session and, after exiting the
executive session, a vote would be taken to release the report
as a final public document. In response to Chair Stevens, she
clarified that confidentiality would end after the committee
released the report as a public document.
11:44:41 AM
MS. CURTIS reported on the current status of audit work. She
directed attention to the matrix of current audits [Included in
members' packets]. She relayed that currently there were 6
performance audit requests, 11 sunset audits, and the FY16
federal and financial audit to be completed. She explained that
the audits were prioritized by statutory or legal requirement,
and that performance audits were conducted as resources allowed.
She stated that there were 11 entities with termination dates in
2018 which had to be completed in the year prior to termination.
Although it was unusual to have so many entities terminating in
one year, accommodations had been made to ensure that all of
these audits would be released by the end of the year. She
reported that the oldest of the six performance audits was a
2008 audit request related to the [Matanuska Maid dairy plant],
in which the division had been asked "to follow the
dispossession of assets and report on whether they were disposed
in accordance with laws, regulations." She noted that, as the
final piece of property in Palmer had just been sold, this audit
request could now be finished. She relayed that the next oldest
audit was requested in 2014 by Representative Austerman
regarding the MV Tustumena overhaul and refurbishment. This
audit was 15 percent complete, but had been placed on hold, as
litigation had begun. She shared that she had been informed
during the past week by Department of Transportation & Public
Facilities that this litigation had been concluded; therefore,
the audit could now be completed. She moved on to list the 2016
audit request on the Board of Game Advisory Committee and the
three audits requested during December, 2016, which included
audit requests for the Alaska Mental Health Trust Authority and
the Alaska Gasline Development Corporation. She reiterated that
these audits would begin when resources allowed, offering her
belief that performance audits would not be started until late
fall, 2017. She moved on to discuss the FY16 financial and
federal compliance audits, reporting that, in May, 2016, she had
sent a letter to the Director of the Office of Management &
Budget, the Commissioner of Department of Administration, and
the Director of the Division of Finance to inform them that she
anticipated these audited statements "would be significantly
late" and the legislators would not know the audited balances
when they arrived for session. When the legislative session
began, she had sent a letter to the legislative leadership
updating the status of the audits. She stated that, although
she had not received the draft financial statements in order to
start the audit, other audit work without draft statements was
progressing. She explained that implementation of the new state
accounting system had made it difficult to prepare financial
statements. She expressed her anticipation for reception of
these financial statements in the next few days, after which it
would take about two and a half months to complete the audit.
11:48:38 AM
SENATOR HOFFMAN asked, regarding the audit on the MV Tustumena,
whether the substantial delay due to the subsequent lawsuit had
affected the premise for the need of the audit. He suggested
that this question be placed to Representative Austerman.
MS. CURTIS, in response, explained that the audit request was
based on the challenges by the state for getting the MV
Tustumena back into the water after its refurbishment, and the
problems with the vendor responsible for the work. She proposed
to review the results of the litigation and then respond to the
committee, noting that there were now new issues with the MV
Tustumena. She offered to discuss at a later date whether the
committee desired to continue with the audit, terminate the
request, or alter it.
CHAIR STEVENS expressed his desire to further the discussion
when Ms. Curtis was prepared.
11:50:47 AM
REPRESENTATIVE KAWASAKI asked about the process to terminate an
audit.
MS. CURTIS, in response, said that there were formal, adopted
rules of procedure for termination of an audit request,
explaining that it would take a vote of the committee. She
shared that, historically, once an audit was requested, it would
take something more significant than a change in leadership to
terminate.
REPRESENTATIVE KAWASAKI asked when the post audits were
available for members.
MS. CURTIS replied that she did not perform those audits,
although with some outside corporations, she did approve their
hired auditors. She said that the final drafts of outside
audits were typically available by mid-October, although there
had been a delay in several outside audits during this year
which had further contributed to the problems of the financial
statements.
SENATOR BISHOP, in response to Chair Stevens, opined that the
original discussion around the MV Tustumena had centered on some
of the welding procedures, and that, after the due diligence,
the audit would no longer be necessary.
^Executive Session
Executive Session
11:53:26 AM
CHAIR STEVENS announced that the next order of business would be
to move into Executive Session.
11:53:41 AM
REPRESENTATIVE JOSEPHSON made a motion to move to executive
session under Uniform Rule 22(b)(1) for the purpose of
discussing 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. There being no objection, the
committee went into executive session at 11:54 a.m.
11:54:11 AM
The committee took an at-ease from 11:54 a.m. to 12:57 p.m.
12:57:07 PM
CHAIR STEVENS brought the committee back to order at 12:57 p.m.
^Consultant Contracts
Consultant Contracts
12:57:16 PM
REPRESENTATIVE JOSEPHSON moved that the Legislative Budget and
Audit Committee approve Amendment 1 to the professional services
contract with Enalytica, Inc. in the amount of $20,000 for the
period of February 1, 2017 - May 31, 2017 and the Section
04.08.1 exemption per the Alaska Legislature procurement
procedures.
CHAIR STEVENS explained that, as the end of these contracts
approached, he wanted to ensure that advisement was available
until there were additional contracts.
CHAIR STEVENS, in response to Senator MacKinnon, added that
these contracts were only as needed and there was not any
automatic monthly stipend.
A roll call vote was taken. Representatives Kawasaki, Seaton,
Spohnholz, Johnston, and Josephson and Senators MacKinnon,
Giessel, Hoffman, and Stevens voted in favor of the amendment to
the contract with Enalytica, Inc. Therefore, the amendment was
reported out of the Legislative Budget and Audit Committee by a
vote of 9 - 0.
12:59:25 PM
REPRESENTATIVE JOSEPHSON moved that the Legislative Budget and
Audit Committee approve Amendment 1 to the professional services
contract with Hart Energy Publishing LLLP for the period of
February 1, 2017 - June 30, 2017 and the Section 04.08.1
exemption per the Alaska Legislature procurement procedures.
CHAIR STEVENS reiterated that these contracts were only as
needed and to ensure that advisement was available until there
were additional contracts.
1:00:02 PM
A roll call vote was taken. Representatives Kawasaki, Seaton,
Spohnholz, Johnston, and Josephson and Senators MacKinnon,
Giessel, Hoffman, and Stevens voted in favor of the amendment to
the contract with Hart Energy Publishing LLLP. Therefore, the
amendment was reported out of the Legislative Budget and Audit
Committee by a vote of 9 - 0.
1:00:43 PM
REPRESENTATIVE JOSEPHSON moved that the Legislative Budget and
Audit Committee approve Amendment 1 to the professional services
contract with Roger Marks for the period of February 1, 2017 -
June 30, 2017.
CHAIR STEVENS reiterated that these contracts were only as
needed and to ensure that advisement was available until there
were additional contracts.
1:01:03 PM
A roll call vote was taken. Representatives Kawasaki, Seaton,
Spohnholz, Johnston, and Josephson and Senators MacKinnon,
Giessel, Hoffman, and Stevens voted in favor of the amendment to
the contract with Roger Marks. Therefore, the amendment was
reported out of the Legislative Budget and Audit Committee by a
vote of 9 - 0.
1:01:35 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
1:01 p.m.
| Document Name | Date/Time | Subjects |
|---|