HB 316-STANDARDIZED IMPROVEMENT TRACKING SYSTEM  4:58:01 PM CHAIR KREISS-TOMKINS announced that the next order of business would be HOUSE BILL NO. 316, "An Act providing for a standardized improvement tracking system for state agencies." 4:58:17 PM The committee took a brief at-ease. 4:58:35 PM REPRESENTATIVE KAUFMAN, prime sponsor, introduced HB 316. He indicated that the bill would create an action tracker within the executive branch that would track critical items in a methodical way to allow for better organization. 5:00:14 PM MATTHEW HARVEY, Staff, Representative James Kaufman, Alaska State Legislature, on behalf of Representative Kaufman, prime sponsor of HB 316, summarized the sponsor statement [included in the committee packet], which read as follows: HB 316 addresses the need for a standardized improvement tracking system throughout the executive branch. Audit findings and internal issues have been growing in quantity, age, and magnitude across Alaska's State Government meaning that something must be done to improve outcomes. Organizations seeking to refine and optimize their operations to improve outcomes do so using a variety of methods, but action trackers are one of the most important tools in the continuous improvement toolkit. Having a formal tracking system in place enables organizations to identify opportunities for improvement and track them to completion. Each improvement opportunity has merit and should be reviewed, but not all can be worked to completion. A select few improvement opportunities will be deemed priorities based on impacts to operations, a rough cost/benefit analysis, age of issue, and resources available. These high-priority improvement opportunities will then be treated like a project with one or multiple actions and a scheduled completion date. This tracking system will make next steps and progress visible which will lead to realized benefits across state government. Reports will also include success stories of opportunities and actions that have been completed. These successes should be celebrated, and the executive branch could likely find creative ways to incentivize the closure of these items. Action items registered in such a system are often referred to as corrective and preventative actions, sometimes using the acronym CA/PA, with corrective action referring to actions taken to remedy what has already occurred, while preventative actions are taken to prevent a future occurrence. The benefits of a standardized system will be dependent upon the extent to which the organization uses the system, but there is a possibility to increase transparency and accountability across agencies and programs while improving the function of the organization and delivery of value to customers of various services. MR. HARVEY directed attention to the PowerPoint presentation on HB 316 [hard copy included in the committee packet], beginning on slide 2, which read as follows [original punctuation provided]: OVERVIEW Problem Statement: Audit Findings and internal issues grow in quantity and in magnitude when there is not a standardized system in place to facilitate planning and progression of actions. Improvement Tracking System purpose Improvement Tracking System core attributes Government Examples Committee Substitute in-progress 5:01:20 PM MR. HARVEY continued to slide 3, which read as follows [original punctuation provided]: PURPOSE A standardized improvement tracking system for each state agency Must enable tracking of status, progress, and closure of actions Actions may arise from • Audit findings • Internal Corrective and preventive action requests • Improvement opportunities identified by agency employees • Opportunities by other internal or external auditors • Opportunities identified by customers • Opportunities identified by customers 5:02:17 PM MR. HARVEY turned to slide 4, which read as follows [original punctuation provided]: IMPROVEMENT TRACKINGSYSTEM MUST: Include the ability to uniquely track each improvement opportunity for each state agency Validate each opportunity to check whether it is unique or exists in the system in some form Identify various elements which are important when pursuing prioritization and closure of opportunities Provide mechanism for state agencies to • Perform a Root Cause Analysis, determine corrective actions, develop an implementation schedule, and evaluate implementation Ensure evaluation of effectiveness of plans and assess improvements Provide for status reports to relevant stakeholders 5:03:20 PM MR. HARVEY advanced to slide 5, which read as follows [original punctuation provided]: STATUS REPORTING Quarterly status reports to heads of agencies Annual status reports from the Governor to the legislature Reports must include: • Quantity of open and closed items • Aging of items approaching or beyond scheduled completion date • Cost or benefit of items closed during the reporting period and fiscal year to date • Details of higher criticality items closed within reporting period • Details of higher criticality items extended or expected to extend beyond original due date • Action plans for higher criticality items beyond their scheduled closure date 5:04:13 PM MR. HARVEY proceeded to slide 6, which read as follows [original punctuation provided]: GAO EXAMPLE Priority Recommendations • As GAO issues reports/testimonies, included recommendations are tracked in this database • Certain recommendations are deemed priority recommendations Action Tracker • These priority recommendations are assigned actions, which are tracked and progressed in the action tracker Month-In-Review • A summary of audits, reports, progress, and more 5:05:24 PM MR. HARVEY continued to slide 7, which read as follows [original punctuation provided]: GAO EXAMPLE Priority Recommendations • https://www.gao.gov/reports- testimonies/recommendations-database Action Tracker • https://www.gao.gov/reports-testimonies/action- tracker Month-In-Review • https://www.gao.gov/reports-testimonies/month-in- review 5:05:31 PM MR. HARVEY concluded on slide 8, which read as follows [original punctuation provided]: COMMITTEE SUBSTITUTE IN PROGRESS Requested Changes to reduce the administrative burden and increase effectiveness of the system Prioritize opportunities and only progress high- priority, actionable opportunities that can be completed with available resources Refine the list in the newly created AS 44.66.100 (c)(3) • Reducing this list to critical components and adding an open-ended component which would allow the system administrator to add information as deemed necessary Add a requirement to publicize high-priority opportunities/actions and quarterly reports on a single website 5:06:51 PM CHAIR KREISS-TOMKINS sought to confirm that the CS was being drafted. MR. HARVEY answered yes. 5:07:00 PM REPRESENTATIVE VANCE asked how the reporting requirements would be made available on a website and whether that would be clarified in the CS. MR. HARVEY said the forthcoming CS would clarify that the status reports would be made available on a website. REPRESENTATIVE VANCE asked whether the website already existed or whether it needed to be created. MR. HARVEY said that had not been decided upon, adding that the Office of Management & Budget's (OMB's) website was being considered, as well as other ideas. 5:08:10 PM REPRESENTATIVE STORY asked which state agencies had looked over this plan and whether they had indicated that the administrative burden was too high, thus necessitating the forthcoming CS. MR. HARVEY said the bill had been socialized with OMB and a legislative auditor. He explained that the bill in its current form suggested that the goal was to track everything, which was not the sponsor's intent. REPRESENTATIVE STORY requested to hear from state agencies at a future bill hearing about how the proposed legislation would impact them. 5:10:10 PM REPRESENTATIVE CLAMAN asked whether there was a fiscal note. MR. HARVEY said it was forthcoming. REPRESENTATIVE CLAMAN asked whether a fiscal note would be submitted from every state department. MR. HARVEY did not know which departments would be submitting a fiscal note. REPRESENTATIVE CLAMAN believed that there was merit to the notion of improving the system; however, he pointed out that when corporations implemented this type of system, it required a significant outlay of time and money. He opined that in reality, implementing such a system would be difficult. 5:11:19 PM REPRESENTATIVE VANCE asked whether conversations were had with the administration or the Department of Administration (DOA) regarding the directive to streamline state agencies, which seemed like a similar ask. MR. HARVEY responded that certain departments had implemented the departmental improvement directive more than others, which was why a standardized system would help, he opined. He noted that the bill proposed a middle ground between departments that had implemented the directive in a large-scale way and those that had done little to streamline. 5:12:51 PM CHAIR KREISS-TOMKINS announced that HB 316 was held over.