SENATE BILL NO. 358 "An Act relating to disclosure of the use of state funds related to personnel records." PAT DAVIDSON, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT DIVISION testified in support of SB 358. She explained that the legislation would divide investigations from personnel actions in regards to disclosure. Personnel actions would remain confidential. Public disclosure would be allowed when there is a misuse of state resources. The original legislation was limited to public funds. The Senate changed "public funds" to "state resources". Ms. Davidson reviewed the bill. Section 1(a) identifies that any state agency authorized by law to conduct a state audit can ask for the public release of information. They would have to ask the employee for permission to release information. If the employee declines a review procedure would be used as contained in subsection (c). This protects the employee by allowing someone outside of the investigation to look at it before it can become public. She observed that the Department of Administration, Division of Finance would appoint a review officer for cases involving employees of the executive branch, including employees of the University of Alaska. She suggested that the appointment be elevated to the commissioner or his designee. She observed that the bill states that the appropriate reviewing officer for employees of the judicial branch is the administrative director of the Alaska Court System. The appropriate reviewing officer for employees of the legislative branch is the: (1) director of the Legislative Affairs Agency for employees of the agency; (2) legislative auditor for employees of the division of legislative audit; (3) legislative fiscal analyst for employees of the division of legislative finance; ombudsman for employees of the Office of the Ombudsman. Representative Mulder questioned if the expansion from "public funds" to "public resources" was necessary. Ms. Davidson did not know how expansive the legislation would be under public resources. Representative Mulder observed that an $100 thousand dollars fiscal note accompanies the expansion. In response to a question by Representative Kelly, Ms. Davidson noted that as the agency conducting the audit that she would first ask the employee for a public release. Representative Davies expressed concern that there are certain aspects of personnel records that maintain privacy, which are not protected in other places in law. Ms. Davidson reiterated that the intent is to separate personnel action that has been taken from investigation results. Representative Davies acknowledged that it would be important to know that a state employee did an action, but stated that it might not be important to know the identity of the state employee. Ms. Davidson argued that public officials must be accountable for their actions when they are dealing with financial transactions. She noted that there might not be as clear a distinction with the use of "public resource". Representative Davies stated that he supports the general principle of the legislation. He stressed that there are already mechanisms for punishing wrongdoers. He emphasized that information would be helpful in cases where policy might be changed. He posed a hypothetical situation where a state vehicle was misused through an honest misinterpretation of the rules. He stressed that it would not be advantageous to punish the person and damage their reputation. The information would be useful for future policy decisions. KATHLEEN STRASBAUGH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW testified that the Department of Law has some reservations similar to those of Representative Davies. The Department of Law worked with the Legislative Budget and Audit Committee on the original legislation. They considered the limited issue of financial transactions during discussions. They agreed that there could be substantial injury to a person's reputation that is accused of misuse, fraud or embezzlement. The objection process solves a problem that is created under state and federal Constitutions regarding injury of reputation. There are accepted principles with financial transactions. The legislation would allow Legislative Budget and Audit Committee to use conclusions instead of doing their own audit. The Legislative Budget and Audit Committee could use public documents to question the employee. The fiscal cost would be zero without the change to "public resources". The use of public resource broadens those things that could be subject to grievances. She agreed that there needs to be debate about the misuse of public resources, but emphasized that an immediate problem could be resolved with a more limited approach. Ms. Strausbaugh stated that she has some reservations regarding name revealing. She gave the example of an accounting clerk that routinely messed up their work. She observed that an internal audit could be redone. Representative Martin stated that misuse of public money; land or resources should be public knowledge. Ms. Strausbaugh explained that the Department of Law only advises members of the executive branch to comply with AS 39.25.080. She emphasized that the legislation is a quick fix that was requested by the Legislative Budget and Audit Committee to deal with a specific problem that was costing them a lot of time. The Department of Law only advises their clients to uphold the law. Representative Davies noted that if the reviewing officer finds that the audit results are not based on substantial evidence or that the decision is unreasonable, the officer shall prohibit the public release of the audit results. He questioned if the audit results would then be made public. Ms. Strausbaugh said they would. Representative Davies concluded that the legislation does not allow the hearing officer to make a distinction between a case where it would be in the public interest to release the generic versus releasing the individual's name. Representative Martin observed that the Legislative Budget and Audit Committee has been careful with the use of names. Representative Davies noted that the information is available. He stated that he wanted to get the facts of the circumstance released to the public, but stressed his concern about instances when the individual is not charged. Representative Mulder felt that there are sufficient protections.