HOUSE BILL NO. 167 "An Act relating to performance reviews, audits, and termination of executive and legislative branch agencies, the University of Alaska, and the Alaska Court System." 2:53:15 PM Representative Wilson noted that 31 House members and 14 Senators had cosponsored the original legislation. She requested further discussion before the bill reported out of committee and thought the performance reviews had some merit. She wanted clarification that the Department of Health and Social Services (DHSS) performance reviews identified $2 million savings. COURTNEY ENRIGHT, STAFF, REPRESENTATIVE GABRIELLE LEDOUX, deferred to Kris Curtis, Legislative Auditor, Alaska Division of Legislative Audit to respond to the question and noted that she was not available to testify. Representative Wilson requested a subcommittee to examine the issue further. She suggested that Ms. Curtis had suggested ways to fix the problem, decrease the cost of the reviews, and still result in the desired outcome. She reminded the committee that the original legislation passed with bipartisan support. Co-Chair Foster asked for more input from other members whether to report the bill out of committee or place it in a subcommittee for further discussions. 2:56:59 PM Co-Chair Seaton noted that the sponsor of the original legislation, HB 30 (State Agency Performance Audits) [CHAPTER 19 SLA 13 - 05/28/2013] Representative Mike Chenault was on a subcommittee that recommended repealing the legislation. At present, he felt that proceeding with the program that was unfunded for the previous two sessions and that the legislature had already decided was not worth continuing was the correct course of action. He recounted that the previous legislature left the program unfunded predicated on the results that were not worth the half a million dollar cost each year. He preferred to vote on the bill. He suggested addressing a particular agency's performance in question via specific legislation. 2:59:28 PM Representative Tilton remembered that Kris Curtis identified one challenge with the legislature implementing the recommendations from the reviews. She recalled that Ms. Curtis reported on one recommendation that would save approximately $1 million in the DHSS budget. She relayed her previous experience as a House Finance Committee staffer handling the DHSS budget when she undertook an internal review. She emphasized how helpful the performance audit review would had been if available at the time in enhanced understanding resulting in better outcomes and better decisions. She mentioned the overwhelming support for the original bill. She suggested examining the completed reviews further over the interim to discover further savings. Representative Kawasaki reported having been a co-sponsor of the original legislation. He commented that the way the bill was presented and "envisioned" was different than the actual outcome of the reviews that were completed. He noted the necessity for the 3 full-time positions and $1 million dollar cost to move forward with program. He supported moving HB 167 out of committee. Vice-Chair Gara reported that a provision in the original bill tasked the audit with finding 10 percent or more of efficiencies in an agencies budget. Next year, the bill listed the University Of Alaska as the recipient of a performance audit. He communicated that the University had $50 million to $72 million in proposed cuts in the current fiscal year alone. The legislature had already cut roughly $600 million from agencies. He acknowledged that the DHSS audit identified a $1 million cut to the DHSS budget but was not scheduled to receive another review for ten years and the DHSS budget was cut $200 million since passage of the bill. The goal of the original bill was to begin finding cuts. The legislature had already identified cuts that totaled $3.4 billion in all departments. He did not see the logic in continuing the reviews on the drawn out schedule by each individual agency to identify 10 percent in cuts. He concluded that the legislature was cutting all department's budgets and the bill was unnecessary. 3:04:39 PM Representative Pruitt voiced that Representative Wilson's request was appropriate. He had found some very interesting information in some of the audits from the past. He agreed that in the current year it was appropriate to abstain from an audit due to costs and with the exercise of removing programs "from the books" if warranted. He believed that the performance review program should be reformed. He advocated for further consideration of the performance audit program over the interim and felt that the program was a useful tool that could bring value in the future. He promoted modernizing the program instead of eliminating it. 3:08:12 PM Representative Thompson believed that "it was always good to review performance." However, the legislature had reduced budgets and identified efficiencies. He wondered about the workload and burden the program created for legislative audit and the departments under review. He favored the concept of a performance review but had mixed feelings about whether or not to support the bill. He suggested reviewing the program over the interim to determine how to proceed. Representative Guttenberg liked the performance audit as a tool but surmised that the reviews worked only if the department was "static." He did not see the value currently because there had already been cuts resulting in a significant amount of transition and reorganization in each agency. He mentioned that missions and measures was an established tool that offered agency analysis. He suggested that additional audits could be funded in the future. Due to the state's current fiscal condition, he wanted to cancel the program. He mentioned that keeping the program in statute but not funding it caused instability and uncertainty for legislative audit. He supported moving the bill out of committee. 3:12:27 PM Representative Wilson wanted to understand the difference in rescinding the program today versus waiting until next year. She noted that Ms. Curtis provided a review with 12 suggestions. She thought that requiring board audits held boards at higher standards than the agencies. She was asking whether it was worth "taking the program off of the books at present or waiting until next January and further examine the issue. She thought the audits provided an opportunity for agencies to determine whether its mission was met. She reiterated her request to reexamine whether the program, in total or in part, was beneficial. Co-Chair Seaton reminded the committee that Ms. Curtis testified her need to hire 3 manager positions to manage contracts to continue with the reviews. The disruptions to the department the audits caused were "significant" especially due to budget cutting measures. He deduced that altering the program required additional legislation. He remarked that the legislature could require an agency audit if a problem was identified and noted that audits and performance reviews were different. He stressed that a better way to proceed was to address a targeted problem and not reform an unproductive system. He reiterated his desire to report the bill out of committee. Co-Chair Foster indicated that members had "good arguments" on both sides of the issue. He believed that a vote was the best course of action. Vice-Chair Gara reported on the fiscal note FN 1(LEG) with zero fiscal impact. 3:17:53 PM Co-Chair Seaton MOVED to report HB 167 out of Committee with individual recommendations and the accompanying fiscal note. Representative Wilson OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Gara, Grenn, Guttenberg, Kawasaki, Ortiz, Foster, Seaton OPPOSED: Thompson, Tilton, Wilson, Pruitt The MOTION PASSED (7/4). HB 167 was REPORTED OUT of Committee with an "amend" recommendation and with one new zero fiscal note by the Legislature.