Legislature(2017 - 2018)Anch LIO Lg Conf Rm
12/13/2018 10:00 AM Senate LEGISLATIVE BUDGET & AUDIT
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| Audio | Topic |
|---|---|
| Start | |
| Approval of the Agenda | |
| Approval of Minutes | |
| Approval of Rpl(s) | |
| Special Audit Requests | |
| Executive Session | |
| 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
December 13, 2018
10:04 a.m.
MEMBERS PRESENT
Senator Bert Stedman, Chair
Senator Anna MacKinnon (via teleconference)
Senator Cathy Giessel
Senator Click Bishop (via teleconference)
Senator Natasha von Imhof (alternate)
Representative Andy Josephson, Vice Chair (via teleconference)
Representative Paul Seaton
Representative Jennifer Johnston
Representative Dan Ortiz (alternate)
MEMBERS ABSENT
Senator Lyman Hoffman
Representative Scott Kawasaki
Representative Ivy Spohnholz
COMMITTEE CALENDAR
APPROVAL OF THE AGENDA
APPROVAL OF MINUTES
APPROVAL OF RPL(S)
SPECIAL AUDIT REQUESTS
APPROVAL OF SPECIAL AUDIT REQUEST
EXECUTIVE SESSION
FINAL AUDIT REPORTS
PRELIMINARY AUDIT REPORTS
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
AMANDA RYDER, Fiscal Analyst
Legislative Finance Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions on RPLs.
ROB CARPENTER, Fiscal Analyst
Legislative Finance Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Answered questions on RPL 25-9-8623.
REPRESENTATIVE LES GARA
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of the
special audit request DHSS (HB 151).
KRIS CURTIS, Legislative Auditor
Legislative Audit Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions on the
special audit request for the Department of Health and Social
Services, Office of Children's Services.
ACTION NARRATIVE
10:04:46 AM
CHAIR BERT STEDMAN called the Legislative Budget and Audit
Committee meeting to order at 10:04 a.m. Representatives
Seaton, Johnston, Josephson (via teleconference), and Ortiz
(alternate), and Senators Stedman, MacKinnon (via
teleconference), Bishop (via teleconference), Giessel, and Von
Imhof (alternate) were present at the call to order.
^APPROVAL OF THE AGENDA
APPROVAL OF THE AGENDA
10:06:10 AM
CHAIR STEDMAN announced that the first order of business would
be the approval of the agenda.
10:06:20 AM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee approve the agenda.
10:06:32 AM
CHAIR STEDMAN objected for the purpose of discussion. He stated
that during the executive session the committee will consider
preliminary audits before the final audits.
10:06:43 AM
CHAIR STEDMAN removed his objection. There being no further
objection, the agenda, as revised, was approved.
^APPROVAL OF MINUTES
APPROVAL OF MINUTES
10:06:57 AM
CHAIR STEDMAN announced that the next order of business would be
the approval of minutes.
10:07:06 AM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee approve the minutes of the October 9, 2018 meeting, as
presented. There being no objection, the minutes of the October
9, 2018, meeting were approved.
^APPROVAL OF RPL(s)
APPROVAL OF RPL(s)
10:07:21 AM
CHAIR STEDMAN announced that the next order of business would be
the approval of the Revised Program Legislative (RPLs).
10:07:47 AM
The committee took a brief at ease.
10:09:07 AM
CHAIR STEDMAN announced the first order of business for RPLs
would be agenda item IV. (a)-(i). He asked Ms. Ryder to
introduce the first RPL.
10:09:47 AM
AMANDA RYDER, Fiscal Analyst, Legislative Finance Division,
Legislative Agencies and Offices, offered to provide a brief
summary of each RPL and pause for questions.
MS. RYDER explained that RPL 02-9-0056, the Office of Public
Advocacy (OPA), Department of Administration (DOA), requests
$144,700 of federal receipt authority. OPA received a federal
grant totaling $600,661 over three years from fiscal year
2019-2021 (FY 19-21) to address the opioid epidemic in Alaska.
She stated that no match is required. She said a similar
request is expected in the [FY 20] budget for the remainder of
the grant.
10:10:26 AM
CHAIR STEDMAN asked whether there were any questions on RPL 02-
9-0056 and there were none. He moved to the next RPL.
10:10:30 AM
MS. RYDER explained that RPL 08-9-0121, the Division of
Insurance (DOI), Department of Commerce, Community & Economic
Development (DCCED), requests $199,700 of federal receipt
authority in order to receive and expend grant funding from the
Centers for Medicare and Medicaid Services. This funding would
be used to assess whether health care plans were meeting
Alaskans' needs, analyze accessibility and affordability of
health care coverage, and conduct an economic and actuarial
research and analysis regarding accessibility to affordable
health care coverage and to develop recommendations. The
remainder of the grant award will be requested in the FY 20
budget and no match is required.
10:11:15 AM
CHAIR STEDMAN asked whether there were any questions on RPL 08-
9-0121 and there were none. He moved to the next RPL.
10:11:20 AM
MS. RYDER explained that RPL 20-9-0044, the Department of
Corrections (DOC), requests $73,000 of federal authorization
because the federal grant award for the Residential Substance
Abuse Treatment for the state prisoners program increased to
$138,000. The funding will be allocated to the residential
substance abuse treatment program housed in the Hiland Mountain
Correctional Center (HMCC), which is the state's primary female
unit. The increase in funding is associated with the
requirement that medication-assisted treatment services are now
required to be incorporated as part of the spectrum of care in
order to continue receiving this grant funding. There is a 25
percent matching fund requirement, which in essence is about
$18,000 to $18,125, which will be absorbed by the DOC.
10:12:18 AM
CHAIR STEDMAN asked whether there were any questions on RPL 20-
9-0044 and there were none. He moved to the next RPL.
10:12:23 AM
MS. RYDER explained that RPL 05-9-0045, the Alaska State Council
on the Arts, requests $385,000 of statutorily-designated program
receipt authority to receive funding from new grants from the
Margaret A. Cargill Foundation (MACF) and the Rasmuson
Foundation. These grants will support new arts and education
programs and initiatives. These grants are expected to continue
for the next 5-10 years so a similar request is expected in the
FY 20 budget and no match is required.
CHAIR STEDMAN asked whether there were any questions on RPL
05-9-0045 and there were none. He moved to the next RPL.
10:13:08 AM
MS. RYDER explained that RPL 18-9-0374, the Department of
Environmental Conservation (DEC), requests $853,800 of federal
receipt authority. For the past several years, the department
has been preserving a portion of federal indirect cost revenue
to cover a one-time cost of cubicle furniture that will be
necessary to move into new office space in Juneau. She stated
that this is a one-time request and has no future budgetary
impacts.
CHAIR STEDMAN asked whether there were any questions on RPL 18-
9-0374 and there were none. He moved to the next RPL.
10:13:44 AM
MS. RYDER stated that RPL 09-9-0113 would provide the Department
of Military and Veterans Affairs (DMVA) with $100,000 of
statutorily-designated program receipt authorization for the
Homeland Security & Emergency Management Division for two
employees to assist the State of California in the
administration and implementation of Federal Emergency
Management Agency (FEMA) funding for the November fires in
California. The immediate need for the RPL is just under
$50,000; however, an additional $50,000 would allow for
flexibility in responding to other requests for assistance and
no match is required.
10:14:26 AM
REPRESENTATIVE SEATON objected for the purpose of discussion.
He said he was curious whether the $50,000 should be considered
and if it was justified to consider potential future expenses in
this committee.
10:14:47 AM
CHAIR STEDMAN asked Ms. Ryder to provide clarification on the
timing of the request relative to the upcoming legislative
session.
10:14:57 AM
MS. RYDER answered that the department could request $50,000 as
a supplemental [operating] budget request; however, it would add
to the administrative costs. She stated that if the DMVA does
not receive $50,000 in federal receipts, the department cannot
expend any more funds. The $50,000 would not be added to the
base amount but approval would allow the department to expand
additional funding for this purpose if they receive it.
10:15:24 AM
REPRESENTATIVE SEATON said that answered his question.
10:15:28 AM
CHAIR STEDMAN asked whether there were any further questions on
RPL 09-9-0113 and there were none. He moved to the next RPL.
10:15:34 AM
MS. RYDER explained that in RPL 12-9-3040 the Department of
Public Safety (DPS) requests $300,000 because the amount of
federal grant awards increased to $692,500. She stated that
this funding will be used to improve the quality and timeliness
of forensic science or medical examiner coroner services to
eliminate a backlog in the analysis of forensic science evidence
and to train, assist and employ forensic laboratory personnel,
as needed. This morning the DPS advised her that a [Paul]
Coverdell Forensic Sciences Improvement competitive grant has
been denied so instead of needing $300,000, the RPL can be
reduced to $163,400. She advised that no match is required, and
no new positions will be added.
10:16:27 AM
REPRESENTATIVE ORTIZ asked for further clarification on the
requested amount and if it meant the request was for $163,000
rather than $300,000.
MS. RYDER responded that the division recommends that the amount
for RPL 12-9-3040 be amended to $163,400 instead of $300,000.
10:17:04 AM
CHAIR STEDMAN related his understanding that the request for RPL
12-9-3040 would be for $153,000.
MS. RYDER clarified that the total amended request would be for
$163,400.
10:17:21 AM
CHAIR STEDMAN stated the request for RPL 12-9-3040 would be for
$163,400.
10:17:25 AM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee amend RPL 12-9-3040 to reflect the amount of the
reduction to $163,400.
There being no objection, RPL 12-9-3040, as amended, was
adopted.
10:18:10 AM
MS. RYDER stated that in RPL 12-9-3050 the Council of Domestic
Violence and Sexual Assault (CDVSA) requests $500,000 of
additional receipt authority as a result of an increase in the
federal Victim of Crime Acts (VOCA) federal grant award. She
stated there is no match required and the DPS [Department of
Public Safety] will be requesting additional federal
authorization in the FY 20 budget.
There being no objection to RPL-9-3050, the committee moved to
the next RPL.
10:18:46 AM
MS. RYDER explained that in RPL 25-9-8623 the Department of
Transportation and Public Facilities (DOT&PF) requests $25
million in federal capital funding to address damage to major
highways, roads, bridges, and other infrastructure caused by the
November 30, 2018 earthquake and the subsequent aftershocks.
10:19:33 AM
SENATOR MACKINNON asked to place a potential conflict of
interest on the record. She stated that her husband [John
MacKinnon] was recently appointed by Governor Dunleavy as the
Commissioner of the DOT&PF.
CHAIR STEDMAN said it was duly noted.
10:19:51 AM
CHAIR STEDMAN asked if there were any objections to adopting RPL
25-9-8623.
10:20:22 AM
REPRESENTATIVE JOSEPHSON [objecting for the purpose of
discussion] asked whether Ms. Ryder could provide background
information on the $25 million, including which agency would
receive the funds and whether it was considered a down payment
from the federal government on other funds. He recollected
reading in the newspaper that the local school district would
need $25-50 million. He anticipated that earthquake funding
would be an issue during the upcoming session, so he asked for a
greater sense of what this represents in terms of other
potential federal funding.
10:21:10 AM
CHAIR STEDMAN asked Ms. Ryder to respond to Representative
Josephson's concern about the magnitude of the request as
compared to the potential magnitude of the [earthquake]
destruction and repair, in terms of this point in time and the
normal legislative budget cycle.
MS. RYDER deferred to Rob Carpenter.
10:22:14 AM
ROB CARPENTER, Fiscal Analyst, Legislative Finance Division,
Legislative Agencies and Offices, answered that the agency
[DOT&PF] could provide additional detail, but the concept is to
set up a collector appropriation to receive initial funding from
the federal agency to perform the initial assessment of damage
caused by the earthquake. He stated that potential exists for
future matching funds which would be addressed in the
supplemental budget in the upcoming legislature. He reiterated
that the RPL was for initial collection of emergency funds to
continue the process.
10:22:48 AM
CHAIR STEDMAN advised [the public] that the Legislative Budget
and Audit Committee cannot appropriate funds, but the committee
can issue the authority to receive federal funding. He stated
that the [RPL] request would allow the state to receive the
federal funding to accelerate the reconstruction of the state.
He anticipated that this will be one of the top items Senator
von Imhof will address in the Capital Budget in minute detail.
10:23:21 AM
SENATOR MACKINNON, in response to Representative Josephson,
stated that RPL [25-9-8623] is for the DOT&PF and does not
extend to the building damage in the Anchorage School District
(ASD). She offered her belief that would be something different
that would be taken up separately. She related her
understanding, as reported in the newspapers, Alaska has
received an initial $5 million from the federal government for
an emergency assessment of damages caused by the earthquake and
to determine the amount of assistance from the federal
government for federal relief funding. She recollected that on
December 3, 2018, the [Alaska] delegation performed an on-site
review of damage from Houston to South Anchorage and to the
Girdwood area. As Mr. Carpenter stated, DOT&PF was available
online to answer questions. She indicated that [RPL 25-9-8623]
for a $25 million appropriation is specifically for the DOT&PF.
10:24:28 AM
CHAIR STEDMAN anticipated the state would likely need school
construction and reconstruction funding [as a result of
earthquake damage].
10:24:39 AM
MS. RYDER added that the division received information from
DOT&PF that for the first 180 days after the [November 30, 2018]
earthquake, the reimbursement from the Federal Highway
Administration (FHWA) is at 100 percent so no match would be
required at this time. She anticipated that some matching funds
may be required after that timeframe.
10:25:07 AM
CHAIR STEDMAN asked whether there were any objections to
receiving the federal appropriation and there were none. He
stated that concluded the RPLs.
10:25:24 AM
SENATOR VON IMHOF stated she has a potential conflict of
interest with [RPL 05-9-0045] for Arts in Education private
grants. She said she serves as a board member of the Rasmuson
Foundation who has contributed funding for the Arts in Education
fund.
10:25:54 AM
SENATOR GIESSEL asked for further clarification on two RPLs not
covered: RPL 09-2019-0068, the Alaska Military Youth Academy
authority was increased; and RPL 20-2019-0035, Department of
Corrections (DOC), Bureau of Justice Assistance (BHA).
10:26:23 AM
The committee took a brief at ease.
10:27:29 AM
CHAIR STEDMAN asked Ms. Ryder to address the two RPLs mentioned.
10:27:31 AM
MS. RYDER responded that the Office of Management and Budget
(OMB) withdrew the two referenced RPLs, so they were not
included in members' packets. She explained that the RPLs were
withdrawn at the same time that OMB added the $25 million
federal RPL for DOT&PF.
10:28:00 AM
CHAIR STEDMAN asked for a motion on the RPLs.
10:28:04 AM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee (LB&A) approve the RPLs as listed and presented to the
committee, as follows: 02-9-0056, 08-9-0121, 20-9-0044, 05-9-
0045, 18-9-0374, 09-9-0113, 12-9-3040, as amended [to $163,400],
12-9-3050, and 25-9-8623.
There being no objection, the RPLs were approved.
10:29:32 AM
SENATOR MACKINNON asked whether the committee needed to have a
[roll call] vote to approve the RPLs since some members are
participating (via teleconference).
10:29:43 AM
CHAIR STEDMAN asked to move up the agenda to the action taken on
the RPLs.
10:30:07 AM
A roll call vote was taken. Representatives Seaton, Johnston,
and Josephson (via teleconference) and Senators Mackinnon (via
teleconference), Bishop (via teleconference), Giessel, and Chair
Stedman voted in favor of the approval of the RPLs.
[Representative Ortiz (alternate) and Senator von Imhof's
(alternate) votes were not counted as they were not needed for a
quorum]. Therefore, the motion passed by a vote of 7-0.
CHAIR STEDMAN stated the committee had approved moving these
RPLs forward.
^SPECIAL AUDIT REQUESTS
SPECIAL AUDIT REQUESTS
10:31:28 AM
CHAIR STEDMAN announced the next order of business would be
approval of special audit request, Department of Health and
Social Services (DHSS), Office of Children's Services (OCS) (HB
151).
10:32:20 AM
SENATOR VON IMHOF stated that the special audit request was the
result of HB 151, which she and Representative Gara worked to
pass during the past legislative session. This special audit
request would address the Office of Children's Services (OCS).
She explained that the bill made several improvements and the
audit will review those changes to determine how they have
impacted how OCS operates and places children [in foster care]
and how the OCS processes their caseload. She explained that
this special audit request would be a three-year rolling audit
intended to build on the different implementations as it moves
forward. She said she and Representative Gara worked
extensively this fall with Ms. Kris Curtis to create a
comprehensive scope for the audit. She stated that this letter
was the result of that request [letter dated November 15, 2018
in members' packets]. She related that she and Representative
Gara felt this department needs some changes and that this audit
will assure that the changes are effective. She noted that if
the audit needed to be "tweaked" going forward, [the scope of
the audit provides the flexibility to do so].
10:34:02 AM
REPRESENTATIVE LES GARA, Alaska State Legislature, stated that
he had several questions on the special audit request. He
directed attention to page 3 to the last bullet point on
"permanency" of the November 15,2018 [memo from Senator von
Imhof to Senator Stedman, Chair, Legislative Budget and Audit
Committee, Audit Request-DHSS, OCS, HB 151] [which read as
follows:
o Placement Stability: Of all children who enter foster care
in a 12-month period, what is the rate of placement moves
per day of foster care?]
REPRESENTATIVE GARA said he has also spoken to Senator von Imhof
and believes he understands her intention. He offered that
future legislators may have unrealistic expectations, noting
that members have all heard the testimony [before the
legislature] related to New Jersey model used [in HB 151]. He
recollected that New Jersey saw improvements five to six years
after implementation of their bill, noting explanations exist
for the lag time and that things are not going to change
tomorrow.
REPRESENTATIVE GARA stated that the first three items on that
bullet point basically would achieve the federal standard of
placing a child into a permanent home within 12-24 months. He
related his understanding that Senator von Imhof wanted to
establish a baseline to allow analysis in future years on
whether the OCS has made improvements other than what OCS was
doing in a year from now. However, he cautioned that future
legislators may look at the [OCS's] success in placing a child
in a permanent home within 12-24 months as not meeting the
federal standard. He suggested that if the goal was to
establish a baseline number to change the bullet point by adding
language "so we can have a baseline for future years."
REPRESENTATIVE GARA added that if people were to criticize the
OCS's progress when the figures become available in the next
year or so, he suggested that it would be relevant to see how
that figure compared to past practice. The goal was to achieve
improvement in the [foster care] system and not just to meet the
federal standards. He suggested the goal should be to compare
placement figures in the first three bullet points on permanency
in the first 12 months to how the agency performed in 2016-2017.
He commented that a year prior to passage of HB 151 the [agency]
made major improvements in its Wasilla office in with results
starting to appear in 2018.
REPRESENTATIVE GARA summarized his points, which were to include
language "to establish a baseline for future years" to measure
against so future legislators do not erroneously conclude that
improvements had not yet been made. In terms of the last bullet
point on "placement stability", or how many times children are
bounced between foster homes, he suggested the same thing. The
number would not make any sense unless people realize that this
was a "baseline number. He suggested that if people wanted to
know whether progress had occurred, the committee may wish to
add language to compare the figures early in the bill to those
in 2016-2017 to assess and determine the impact.
10:37:30 AM
REPRESENTATIVE GARA directed attention to the fourth bullet
point which read as follows:
o Re-entry to Foster Care: Of all children who enter foster
care in a 12-month period and are discharged within 12
months to reunification or guardianship, what percent re-
entered foster care within 12 months of their date of
discharge?
REPRESENTATIVE GARA suggested that there might be some
unintended consequences to this provision.
10:37:47 AM
REPRESENTATIVE GARA pointed out that if the bill works that
figure might actually increase since there are two ways to place
youth in a permanent home. One would be the foster child would
go to a loving adoptive family or guardianship, which is a
permanent home. The second way would be reunification with the
original family. It may be that caseworkers spent more time
with the original family and that time resulted in more youth
being reunified with their original families. Often these are
families who suffer from long-term alcohol or substance-abuse
problems. Caseworkers work with these parents in hopes for
reunification; however, a number of those families will fail
because they are battling drug abuse and alcoholism problems.
He acknowledged that the success rate for drug abuse and foster
care is not 100 percent. Thus, when reuniting more youth with
their families, some of these families will slip and these youth
will fall into the figures of re-entry into foster care.
Although he could not be certain, he reiterated that this figure
might inadvertently increase. He asked to flag that for the
committee to consider. He reminded members that in the New
Jersey model the figures did not improve until the five-to-six-
year point after implementation. Although there could be
improvements to these families lives early on, these numbers
might not have dramatically changed.
10:39:51 AM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, said that what was unique
about this special audit request as Senator von Imhof mentioned,
is that the special audit is really a request for three audits.
She stated this is necessary because the bill has various
effective dates. She explained that rather than waiting four
years [to evaluate progress] the division suggests auditing
after one year, after two years, and after three years. When
one has gone in the second and third time, the auditors are
evaluating whether the initial findings have been addressed.
MS. CURTIS asked members for guidance on the baseline measures.
She suggested it may be a good idea to calculate those as of
2016-2017 and then examine them as part of the final audit for
comparison. One of the things she heard was sometimes it is
difficult to obtain measures from the agency, so the division
will be providing that baseline in the initial audit,
objectively, from the auditors. The legislative auditor would
then conduct the last audit. She said that if the committee
wants to go back and calculate those for 2016, the auditors
could do so and in 2020 to allow enough time.
10:41:37 AM
SENATOR VON IMHOF said that approach sounds reasonable and if
that was something the auditors can do it would meet the spirit
of what Representative Gara was asking. She reiterated that to
go forward in terms of addressing Representative Gara's concerns
the goal is to look for trends or specific values such as
whether [the state] is meeting or failing to meet the federal
guidelines. She asked Ms. Curtis to determine the baseline for
the last few years in the initial audit prior to implementing
changes in HB 151. She personally does not believe the audit
must contain specificity such as identifying trend lines that
have occurred or determining if the OCS is above or below
federal guidelines. She considered that to be the analysis,
which is inherent in an audit. She further understood,
acknowledging she may be making an assumption, that the
[committee] does not want ramifications three years from now
from a future legislative committee concluding that because [the
OCS] did not meet the guidelines that it is necessary to shut
down [the agency]. She said she does not want that to happen
and she does not feel that this is the spirit of the intent of
this special audit. She asked whether Ms. Curtis thinks that it
is necessary to have that specific language in this letter.
10:43:14 AM
MS. CURTIS responded that she does not think so. She
highlighted the language in the bullet states that the audit
will compare [permanency] measures to the national standards.
She acknowledged that some concern was expressed that comparing
to national standards may not be what [the committee] really
wants to do. She asked for direction as to whether the
committee wants the audit to contain a comparison to national
standards at all or if the committee wants a measure to use to
compare future calculations to the baseline.
10:43:46 AM
SENATOR VON IMHOF said that since the legislature has considered
New Jersey and other states for guidance, which is a national
scope, that comparing it nationally is fair; however, she also
thought it was fair for auditors, in their analysis, to make
notations of what might be specific to Alaska, such as Tribal
Compact Agreements or other considerations that arise during the
three years of conducting audits. She reiterated that yes, the
audit should compare measures to national standards, but the
auditor's analysis should be performed using Alaska specific
effects, as well.
10:44:31 AM
REPRESENTATIVE SEATON, speaking as past Chair of the House
Health and Social Services Standing Committee [HHSS], said it
appeared that much of the special audit request would transfer
the HHSS committee function to the Legislative Budget and
Audit Committee (LB&A) as an audit function. He said the
committee can obtain data from the agency by bringing the
commissioner or OCS staff before the committee asking for
updates on performance with respect to implementing provisions
in HB 151. He expressed concern that having a multi-stage audit
while simultaneously the OCS is working to implement HB 151
would create conflicts, including time conflicts, and
disruptions in the agency because the auditors will be present.
He expressed further concern that the report would come to the
LB&A instead of the HHSS committee. He suggested that this
seemed more like a performance audit, which [the committee] no
longer conducts. He related his sense that it could be quite
disruptive during a new administration to implement the
provisions of HB 151 in a short-timeline audit. He reiterated
his concern that it was mixing HSS committee functions with LB&A
functions since the HHSS Chair could request and obtain
information if the LB&A committee would like to know how many
people were hired or had other questions for the agency.
10:47:05 AM
CHAIR STEDMAN asked Ms. Curtis to speak to the potential
conflict with process or disruption.
10:47:16 AM
MS. CURTIS clarified that performance reviews were added to the
Legislative Audit [Division's] duties five years ago have been
defunded. She identified those as reviews the division would
facilitate with a contractor to review the agency. However,
those reviews were not performance audits since performance
audits are still requested through this committee, which is what
this is, she said. An audit is a much different level of
assurance than a performance review by a consultant.
MS. CURTIS responded that the concern an audit would disrupt an
agency is a very valid concern since auditors take up staff time
and it is disruptive. She stated that the auditors try to limit
the disruption as much as possible; however, it is a function of
the oversight process of audit. She questioned whether the
committee could obtain the same level of assurance by asking the
department to report information as compared to having the
division prepare it. She explained that an auditor reviews
information including testing and files whereas the department
could likely provide anecdotal feedback on how the department
views its progress, which is valid; however, it would not
provide the LB&A the level of assurance that an audit will
provide. She deferred to the committee to decide.
10:48:50 AM
REPRESENTATIVE JOHNSTON said Ms. Curtis "hit on" what she was
aiming for. She offered her belief that the Legislative Budget
and Audit Committee (LB&A) does need a performance audit,
especially since HB 151 is largely transformative legislation
and given that the lead person working on the legislation is
retiring. She said that she has done a lot of work with social
services agencies in the past. She has served on the HSS
committee and has heard numerous anecdotal comments; however, it
has been very difficult to obtain data. She offered her view
that the special audit for HB 151 will foster a better process.
She said that good data requires a good process and the special
audit might encourage a better process, including digitized data
in foster care rather than having repeated re-entry into the
system. She suggested the special audit will drive what
Representative Gara has been trying to achieve. Further, one
consideration was that the incoming HSS committee are currently
unknown and this issue might not be on their "radar" as a
priority; however, the LB&A has the responsibility to keep it on
the HSS committees' "radar." She said she was very supportive
of the special audit.
10:50:35 AM
REPRESENTATIVE SEATON offered his belief that LB&A was trying to
determine what happens in [the HHSS] committee on an ongoing
basis, since the special audit is a multi-year audit. He
suggested that the committee might default to LB&A which means
that the LB&A would not only establish the audit, but the audit
will be reported back to the LB&A and it would need to take
action. He expressed concern that the ongoing rolling audit
might be beneficial over time; however, if the progress was not
quantified in the first year that it might provide a reason to
abandon the program entirely. For example, the program might
not develop quickly since staff levels might be insufficient,
especially given the new administration's impetus to downsize
personnel. He reiterated his concern that if the OCS does not
immediately perform it may jeopardize the program. He
highlighted his concerns, conceptually, with the rolling audit
process since a number of bills could be handled in this way
since members might be concerned about a program.
10:52:51 AM
REPRESENTATIVE JOSEPHSON commented on his perspective after
having listened to Representative Gara and other testifiers. He
offered his belief that the special audit would compare the
baseline OCS data with progress over time. He suggested that
"in a sense it is trying to compare ourselves to our previous
selves." In terms of the national standard, one thing that
interested him was that currently no state meets the national
standard. He speculated this might be because the federal
agencies would like states to work hard on these issues. He
reiterated that if there was going to be a comparison to the
national standard it was important to identify the states who
met the standard because none or very few states so. He
emphasized the importance of allowing sufficient time for HB 151
to work, noting his recollection was that New Jersey recommended
five years for its model to have a chance to prove itself.
10:54:02 AM
MS. CURTIS pointed out that HB 151 included intent language,
that Department of Health and Social Services (DHSS) agrees to
cooperate with a special audit on this bill. The intent
language was inserted in the Senate and discussed on the floor,
she said.
10:54:25 AM
The committee took a brief at ease.
10:54:32 AM
SENATOR VON IMHOF moved that the Legislative Budget and Audit
Committee approve the special audit request for the Department
of Health and Social Services (DHSS), Office of Children's
Services (OCS) as presented with an amendment to include
baseline data for FY 16.
10:59:21 AM
REPRESENTATIVE SEATON objected.
10:59:29 AM
REPRESENTATIVE SEATON offered his belief that he has made his
position clear during the discussion.
10:59:49 AM
A roll call vote was taken. Representatives Johnston, Josephson
(via teleconference) and Senators MacKinnon (via
teleconference), Bishop (via teleconference), Giessel, and Chair
Stedman voted in favor of approving the special audit request
for DHSS, Office of Children's Services, as presented.
Representative Seaton voted against it. [Representative Ortiz
(alternate) and Senator von Imhof's (alternate) votes were not
counted as they were not needed for a quorum]. Therefore, the
special audit request for the DHSS, Office of Children's
Services, as presented, was adopted by a vote of 6-1.
^EXECUTIVE SESSION
EXECUTIVE SESSION
11:01:14 AM
CHAIR STEDMAN announced that the next order of business would be
executive session.
11:01:29 AM
SENATOR GIESSEL made a motion to move to executive session under
Uniform Rule 22 of the Alaska State Legislature for the purpose
of discussing confidential audit reports under AS 24.20.301.
The purpose of the executive session is to consider the
following final audits: DCCED [Department of Commerce,
Community and Economic Development - Board of Barbers and
Hairdressers, Board of Dental Examiners, Board of Nursing; DHSS
[Department of Health and Social Services] - Statewide Suicide
Prevention Council; DNR [Department of Natural Resources] -
Matanuska Maid Select Property Disposal; and DOA [Department of
Administration] - Statewide Single Audit, FY 15, Reissue; and in
addition, the following preliminary audits [Alaska Gasline
Development Corporation] AGDC - Select Financial Issues; and
DCCED Big Game Commercial Services Board.
SENATOR GIESSEL asked that the following persons remain in the
room or online for executive session: the legislative auditor
and necessary staff for Legislative Audit, any legislators not
on the committee; and staff for members of the committee.
11:02:20 AM
CHAIR STEDMAN indicated the committee will first consider
preliminary audits followed by final audits.
[There being no objection, the committee went into executive
session at 11:02 a.m.]
11:02:49 AM
The committee took an at-ease from 11:02 a.m. to 12:12 p.m. for
the purpose of an executive session.
12:12:06 PM
CHAIR STEDMAN brought the Legislative Budget and Audit Committee
back to order at 12:12 p.m. Present at the call back to order
were Representatives Seaton, Johnston, Ortiz (alternate),
Josephson (via teleconference), and Senators Mackinnon (via
teleconference), Giessel, von Imhof (alternate), and Chair
Stedman were present at the call to order.
CHAIR STEDMAN stated that the committee had a quorum (three
members from the House and three members of the Senate for a
total of six members) to conduct business without the assistance
of the two alternates [who were present].
FINAL AUDIT REPORTS
12:13:59 PM
[CHAIR STEDMAN announced that the next order of business would
be the final audit reports.]
12:14:07 PM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee approve the release to the public the following final
audit reports for the Department of Commerce, Community &
Economic Development (DCCED): Board of Barbers and
Hairdressers, Board of Dental Examiners, Board of Nursing; the
Department of Health and Social Services - Statewide Suicide
Prevention Council; the Department of Natural Resources -
Matanuska Maid Select Property Disposal; and the Department of
Administration - Statewide Single Audit, FY 15, Reissue.
There being no objection, the final audits were released.
PRELIMINARY AUDIT REPORTS
12:15:00 PM
CHAIR STEDMAN announced that the final order of business would
be preliminary audit reports.
12:15:04 PM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee approve the release to the public the following
preliminary audit for the AGDC, Select Financial Issues.
[The committee treated this motion as withdrawn.]
12:15:19 PM
SENATOR STEDMAN asked to return to the agenda item and motion to
release the final audit reports in order to have a roll call
vote since some committee members were participating in the
meeting telephonically.
12:15:47 PM
A roll call vote was taken. Representatives Seaton, Johnston,
and Josephson (via teleconference) and Senator MacKinnon (via
teleconference), Giessel, and Chair Stedman voted in favor of
the release to the public the following final audit reports for
the Department of Commerce, Community & Economic Development
(DCCED): Board of Barbers and Hairdressers, Board of Dental
Examiners, Board of Nursing; the Department of Health and Social
Services - Statewide Suicide Prevention Council; the Department
of Natural Resources - Matanuska Maid Select Property Disposal;
and the Department of Administration - Statewide Single Audit,
FY 15, Reissue. [Representative Ortiz (alternate) and Senator
von Imhof's (alternate) votes were not counted as they were not
needed for a quorum]. Therefore, the final audits were released
by a vote of 6-0.
12:16:55 PM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee approve the release to the public the following
preliminary audit for the AGDC - Select Financial Issues.
12:17:21 PM
A roll call vote was taken. Representatives Seaton, Johnston,
and Josephson (via teleconference) and Senator MacKinnon (via
teleconference), Giessel, and Chair Stedman voted in favor of
the release to the public the following preliminary audit report
for the AGDC - Select Financial Issues. Therefore, the
preliminary audit for the AGDC Select Financial Issues was
released by a vote of 6-0.
12:18:16 PM
SENATOR GIESSEL moved that the Legislative Budget and Audit
Committee approve the release to the public the following
preliminary audit for the Department of Commerce, Community &
Economic Development (DCCED) Big Game Commercial Services
Board (BGCSB).
12:18:30 PM
A roll call vote was taken. Representatives Seaton, Johnston,
and Josephson (via teleconference) and Senator MacKinnon (via
teleconference), Giessel, and Chair Stedman voted in favor of
the release to the public the following preliminary audit report
for the Department of Commerce, Community & Economic Development
Big Game Commercial Services Board (BGCSB). Therefore, the
preliminary audit for the Department of Commerce, Community &
Economic Development Big Game Commercial Services Board
(BGCSB) released by a vote of 6-0.
12:19:15 PM
REPRESENTATIVE JOSEPHSON asked to reconsider an amendment made
on the audit for the Office of Children's Services.
12:19:41 PM
CHAIR STEDMAN asked for further clarification that
Representative Josephson wanted the committee to [rescind] a
previous action taken.
12:19:52 PM
REPRESENTATIVE JOSEPHSON asked to make a "friendly amendment" to
an amendment that was previously adopted.
12:20:00 PM
The committee took an at-ease from 12:20 p.m. to 12:22 p.m.
12:22:46 PM
CHAIR STEDMAN announced that the committee would not go back up
the agenda to rescind its action; however, the committee
acknowledged and recognized the request.
12:23:05 PM
SENATOR VON IMHOF explained that the committee had previously
discussed using FY16 to provide a baseline for the HB 151
special audit. She said that after hearing the discussions she
would like to use FY18 as the baseline [for OCS].
12:23:28 PM
CHAIR STEDMAN agreed to request the DHSS to move forward with
that and if there was a need for a formal amendment to do so
that an amendment could be made at the next LB&A meeting.
12:23:44 PM
REPRESENTATIVE SEATON said that he had no objection to changing
the baseline date [to FY18.]
12:24:00 PM
CHAIR STEDMAN asked Representative Josephson whether this would
address his concern.
12:24:01 PM
REPRESENTATIVE JOSEPHSON answered that he believed that it did.
12:24:08 PM
CHAIR STEDMAN approved changing [the baseline year to FY18]. He
said the Legislative Budget and Audit Committee would meet
before the next legislative session.
12:24:51 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit meeting was adjourned at 12:24 p.m.
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