SB 25-STATE GOV'T FINANCES: WEBSITE  3:43:03 PM CHAIR SHOWER reconvened the meeting and recognized that Senator Costello had joined the meeting via teleconference, thereby establishing a quorum to do business. CHAIR SHOWER announced the consideration of SENATE BILL NO. 25 "An Act relating to the establishment and maintenance of an Internet website providing information on state government financial transactions and specifying the information to be made available on the website." He listed the people available to answer questions and noted the proposed committee substitute. 3:45:26 PM SENATOR HOLLAND moved to adopt the work draft committee substitute (CS) for SB 25, work order 32-LS0217\B, as the working document. 3:45:44 PM CHAIR SHOWER objected for discussion purposes. 3:45:56 PM SENATOR BILL WIELECHOWSKI, Alaska State Legislature, Juneau, Alaska, sponsor of SB 25 explained that Mr. Graham spent the last several weeks collaborating with the chair's staff and the Department of Administration (DOA) to resolve some of DOA's concerns and reduce the fiscal note. He deferred to Mr. Graham to present the proposed changes. 3:46:53 PM NATE GRAHAM, Staff, Senator Bill Wielechowski, Alaska State Legislature, Juneau, Alaska, described the following changes in the CS for SB 25: The Senate State Affairs Committee made clarifying and technical changes to SB 25 (version A) Specifically to Section 4 (a)(1)-(3), Section 4 (c)(3), Section 4 (d), & Section 6 (b). • Page 3 Line 7 Adds "Unaudited" allowing for the Department of Administration to provide unaudited state revenue numbers in the Alaska Online Checkbook. • Page 3 Line 20 Adds "Unaudited" allowing for the Department of Administration to provide unaudited state expenditures in the Alaska Online Checkbook. • Page 3 Line 28 Adds "Estimated" allowing for the Department of Administration to provide the estimated fund balances of the Statutory Budget Reserve, Constitutional Budget Reserve, and Permanent Fund • Earnings Reserve in the Alaska Online Checkbook. Page 5 Line 3-8 Clarifies that the Alaska Online Checkbook will have searchable information related to state service procurement contracts and independent contractors. o (B) " a searchable internet website that provides information related to state service procurement contracts, including name, compensation, contract length and contract type; o (C) a searchable Internet website that provides information related to independent contractors engaged by the state, by state agency, including name, compensation, contract length, and contract type. • Page 5 Line 9-12 Clarifies that state agencies and corporations that do not use the central accounting system shall provide information to the Department of Administration that is necessary to comply with the requirements of the Alaska Online Checkbook. o "Including a state agency that does not use the central accounting system. • Page 6 Transitional Provisions o The Department of Administration shall continue to make the Alaska Checkbook Online Internet website the department made available online in February 2021 available to the public and continue to publish information from the statewide accounting system on the website until the Internet website established under AS 37.05.215, added by Sec. 4 of this Act, is made available to the public. 3:49:44 PM CHAIR SHOWER removed his objection; finding no further objection the CS for SB 25 was adopted. He asked Mr. Zigmund for a 30,000-foot explanation of IRIS. 3:51:56 PM HANS ZIGMUND, Director, Division of Finance, Department of Administration (DOA) Juneau, Alaska, recalled a question from the previous hearing about the intersection of the IRIS upgrade project and the work required to produce the online checkbook outlined in SB 25. He explained that the resource constraint is that the Division of Finance's five programmers and one database specialist are 100 percent committed to working on the multiyear IRIS upgrade project. IRIS is the state's central accounting system, HR and payroll system, procurement system, and vendor services system. Alongside that is the upgrade to ALDER, which is the reporting tool used to pull accounting information from IRIS. That reporting tool is essential to be able to produce the online checkbook. MR. ZIGMUND estimated that it would take about six months to implement the online checkbook envisioned in SB 25. That is how long it took a team of five people in Ohio to implement that state's online checkbook, which is similar to the one in SB 25. He noted that Ohio has dedicated two people fulltime and $75,000 a year to maintain the software. MR. ZIGMUND stated that DOA views the online checkbook as an important tool to support transparency in public finances. The department looks forward to this project and estimates that the October 2022 effective date is achievable with some modest investment. 3:55:39 PM CHAIR SHOWER asked him to explain IRIS versus the online checkbook. MR. ZIGMUND explained that IRIS is the state's general ledger system where the transactions occur. By contrast, the online checkbook provides a visualization into where the state spends money and where that money comes from. It will also show the estimated value of funds such as the Constitutional Budget Reserve (CBR), the Statutory Budget Reserve (SBR), and the Earnings Reserve Account (ERA). It is an easily understood way for legislators, businesses, and the public to have insight into the state's finances. CHAIR SHOWER asked what drove the IRIS upgrade, if it was supported, and what it cost. 3:57:53 PM MR. ZIGMUND explained that the vendor stopped supporting the original version of IRIS in April 2019 after it released a new version. Since DOA was actively engaged in upgrading the system, the vendor agreed to provide support for the old version as long as the upgrade was underway. The upgrade is a new underlying technology with a redesigned user interface with a mobile-first design approach. Some of the 150 new features on the finance side include GASBY 87 compliant lease accounting and a new bond accounting module. About 75 new features also will go live on the HR side. The upgrade also provided the opportunity to do process automation for timesheets, payroll correction documents, and vendor setup. With regard to whether DOA will have additional needs, he explained that the vendor no longer requires massive upgrades every few years and instead will push out software improvements periodically, similar to cellphone updates. Over time, this will save the state money. He highlighted that there is additional functionality within the new version 4 that is not within the current budget. These include statewide grantee/grantor functionality, enhanced accounts receivable technology, and inventory management processes. 4:01:57 PM CHAIR SHOWER asked for the total cost and the timeline for implementation. MR. ZIGMUND related that the estimated completion date for the IRIS upgrade is January 25, 2022. The planning phase took about a year and staff training on project management techniques took a month. The build phase is about a year, the achieve phase to do change management and training is about 3 months, and the post implementation and support phase is from January 2022 through April 2022. He described the implementation schedule as typical for a massive upgrade. The two capital appropriations for the project were for $4.1 million and $7.1 million. He anticipated producing a viable project on budget. 4:04:47 PM SENATOR HOLLAND asked if someone will need to be prepared month- to-month to help with updates or when the unexpected arises with the online checkbook. MR. ZIGMUND confirmed that he does anticipate that ongoing need. He noted that Ohio has two people on staff for that purpose but it was unclear how much of their time is dedicated to online checkbook maintenance. CHAIR SHOWER asked if the CGI contractor was doing all the upgrades or if DOA staff was also involved. MR. ZIGMUND replied both state employees and the contractor are working on the IRIS upgrade project. 4:08:10 PM CHAIR SHOWER asked if the on-cost and on-time IRIS upgrade would be done at the same time as the online checkbook. MR. ZIGMUND replied the IRIS upgrade will go live January of 2022 and SB 25 requires the online checkbook to be live by October 2022. Once the upgrade is complete, he said the department can redeploy resources to the online checkbook with the assistance of probably one contractor and perhaps outside help with design. CHAIR SHOWER asked the sponsor if he had any questions. 4:09:45 PM SENATOR WIELECHOWSKI asked if the fiscal note for SB 25 was still indeterminate or if it could be absorbed in DOA's budget. 4:10:14 PM MR. ZIGMUND replied the fiscal note may be amended before the bill is heard in Senate Finance. One cost that will change is for the forward-facing software because DOA has identified some licenses that it already owns that can be used for that. However, there may still be server costs on the capital side. There is also the question of the cost for outside help on the design phase and for contractors. SENATOR WIELECHOWSKI said his office would continue to work with the administration to come up with a good product that provides transparency in a timeline that is as short as possible and at a cost that is as low as possible, ideally within DOA's existing budget. "I don't think we need a Rolls Royce," he said. CHAIR SHOWER said he would not hold the bill awaiting the new fiscal note. 4:15:16 PM CHAIR SHOWER opened public testimony on SB 25. 4:15:39 PM BRENDA ANGASAN, representing self, Anchorage, Alaska, stated support for SB 25 because Alaskans deserve transparency in government. She looks forward to Alaska no longer being the worse in the nation for data transparency and availability. 4:16:11 PM TIMOTHY HALE, representing self, Butte, Alaska, stated that the online checkbook is a fantastic tool, but the state's old system was like a 1992 Honda Accord with 300,000 miles. He reported that the IT and finance departments in the Mat-Su Borough built an online checkbook last year that is user-friendly and cost very little. He reiterated his support. 4:18:15 PM ESTELLE TOKASH, representing self, Anchorage, Alaska, stated that she supports SB 25 because she wants more transparency in government spending. 4:19:06 PM VERI DI SUVERO, Alaska Public Interest Research Group (AkPIRG), Anchorage, Alaska, stated that AkPIRG is the only nongovernmental nonprofit focused on addressing Alaska's consumer and trust issues. Transparency is the cornerstone of a democracy and is essential for its government. She said AkPIRG supports SB 25 and believes the implementation of the online checkbook is critical for the public to understand how government is spending public dollars. Access to the state's financial information is an important element of government accountability and provides a functional system of checks and balances. She said the enhancements of the online checkbook contained in SB 25 include searchable features, the addition of procurement documents and agencies that do not use the state's accounting system, and embedded links to primary financial documents, among other things. MS. DI SUVERO suggested that the online checkbook should include: accounting codes that are specific to the associated transaction and identified with explanations; definitions of accounting terms; a chart of accounts guide; credits and other costs to reflect the true cost of certain policies; and interagency receipts, particularly for personal travel and relocation costs. 4:21:52 PM NAURI TOLER, representing self, Eagle River, Alaska, stated support for SB 25. She said it is important to have transparency and for the online checkbook to be comprehensive, easy for the average person to navigate, and include information about whether money actually was spent on projects for which it was allocated. 4:24:00 PM CHAIR SHOWER closed public testimony on SB 25 and reminded the public that written testimony could be submitted at ssta@akleg.gov. CHAIR SHOWER asked Commissioner Tshibaka if she had any comments on SB 25. 4:25:04 PM KELLY TSHIBAKA, Commissioner, Department of Administration, Anchorage, Alaska, stated that DOA has chosen to prioritize the IRIS upgrade because the system has not been supported since April 2019. The project is on time and on budget. The only delay was when the Division of Finance had to take down the old online checkbook. She agreed with Mr. Zigmund that DOA supports SB 25 and the new online checkbook, but the condition is that the IRIS upgrade must be finished first. CHAIR SHOWER observed that it sounded like the sponsor was willing to work with the department. 4:27:15 PM CHAIR SHOWER held SB 25 in committee for future consideration.