MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
January 29, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:05 a.m., on Friday, January 29, 1993, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana M. Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
COMMITTEE MEMBERS ABSENT:
Senator Raymond D. Rawson, Vice Chairman
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Dee Crawford, Committee Secretary
OTHERS PRESENT:
Darrel Daines, State Controller
Karen Kavanaugh, Director, Department of Data Processing
Judy Matteucci, Director, Department of Administration
Barry Morgan, Manager, Data Processing Services, Office of the State Controller
Sue Wagner, Lieutenant Governor
Ken West, Chief Deputy Controller, Office of the State Controller
Senator Raggio called the meeting to order and advised that Senator Rawson had been excused.
Governor's Office - Page l
Judy Matteucci, Director, Department of Administration, testified on behalf of the budget for the Office of the Governor. She pointed out the Office of the Governor serves as Commander in Chief of all the military forces of the State of Nevada, is the chairman of the State Board of Examiners, the State Board of the Prison Commissioners, the State Board of the State Pardons Commissioners and the State Board of Finance.
Ms. Matteucci referenced page l of the Governor's Executive Budget and highlighted the changes to the Base budget category:
Most notably there are changes in state-owned building rent as a result of the acquisition of additional square footage. The secretary of state's office moved out of the second floor of the capitol and...into the basement when some additional square footage became available. Essentially, the Governor's office was subletting that square footage out to the secretary of state. That involves 676 additional square footage which has already...been reassumed by the Governor's office.
In addition, in the second year of the biennium, [the Governor's office] plans to move into the new state office building...in Las Vegas....Furthermore, there is an acquisition of 878 square feet, and I recommended it in this budget as a result of the elimination of the staff of the Employee Management Relations Board.
...There's a slight increase in the accounting charges coming from the proposed new Department of Administration and there is an annualization and addition of an operating lease that was only $5,600 in the actual year and is recommended at $ll,000 in each year of the biennium.
Senator Raggio interjected to ask:
I'm looking at actual personnel expenses, at $773,000, and then $901,000, but no change indicated in the existing positions. What is the explanation on that?
Ms. Matteucci responded:
There is a change. As a result of the budget cuts, the Governor's office gave up two positions: one laid-off secretary and an Administrative Assistant, so that's why the actual expenses are down [to] $773,000.
Senator Raggio asked why had the "expenses increased to 19 positions."
Ms. Matteucci explained, "They had 21 positions and the work program shows those two positions eliminated so they are now at l9 positions. Those l9 positions are recommended for continuation." She expounded:
If you'll look at the actual year, under Revenue item, you'll notice Other minus $260,000. The Governor's office reverted $260,000 last year and, included in that particular reversion, was the elimination of two positions.
...In addition, they gave up $l39,000 in Vacancy Savings and $5l6 in Operations. So they had planned a total of $l95,000. However, they ended up...reverting $260,000, which was much more than they anticipated. The bulk of that...came from the personnel area. In l992-93, the only reductions you see in their budget are the two positions they eliminated in l991-l992, that carried across to l992-93, and that is the $73,884 in reserved reversions in the l992-93 work program year....
The only thing that is shown in their budget right now is the reduction of those two positions, however, the Governor has indicated that his budget cuts as all elected officials, we haven't done any reshuffling for any of the constitutional officers, is estimated to come in at about 22 percent this year, but that is not reflected in the work program. When he reverts his money you will see that he is holding some positions in addition to the two that were removed...
Senator Raggio asked if those positions would be filled.
Ms. Matteucci answered, "No, those two positions are removed. The legislature approved 21 positions. If you look at the work program, those two positions are gone. The l9 positions, now, the Governor is not asking for those positions to be restored...."
Senator Raggio expressed his concern:
The actual for l992, which involved the budget crunch reductions, and we appreciate the Governor also cut his office as well as others, the $773,000 for personnel. In FY-93, the year we're in, that's the work program and apparently if you continued, you're indicating that was accommodated by some reversion number....Now into FY-94 and 95, and I can't reconcile, even though you've explained it in your manner, $901,000 for personnel expenses, and there is no reversion amount. So I need staff to tell us what Judy said.
Dan Miles, Fiscal Analyst, elucidated:
I think what she's indicating is in the actual year $773,000 was expended. That was the result of two position cuts plus some vacancy savings. In the work program year, the vacancy savings number is not reflected, though she expects there will be some additional savings beyond the $73,000 that is currently reserved reversion.
Just to clarify though, up in the Resources column in l992, the other number there, $260,000, that was actually a $233,000 reversion and $27,000 carried forward.
Ms. Matteucci declared the Governor intended to cut his budget by 22 percent this year, "or revert a like amount this year."
Continuing, Ms. Matteucci avowed:
But, of course, the year is not closed so that's why you don't see the numbers and, so Dan, that explanation is exactly correct. The only thing we had to do in order to balance the budget, was to move the two positions that he eliminated down into that reserve for reversions, so at least $73,000 will be reverted out of this account in addition to other vacancy savings. Now, he is not asking to have his staff further cut in the out years, but he is not asking for restoration of the cuts of the two positions, either....
SENATE CONCURRENT RESOLUTION 21
OF THE SIXTY-SIXTH SESSION: Requiring an interim study of the state budget process.
Ms. Matteucci explained Operating Expenses and In-State Travel have been enhanced as follows:
Relying on the S.C.R. 21 committee definitions, any of the proposed expenditures from any budget that did not meet the specific definitions were included in the enhancement definitions. The Office of the Governor is asking for an increase in Out-of-State Travel of $2,154 each year of the biennium....
In In-State Travel, he's requesting $9,400 each year. That particular request is as a result of the Governor using his own coupons to fly on state business in-state. Frankly, those coupons are beginning to run out and he anticipates needing that particular money to keep up the degree of travel activity that he will need in-state.
In Operating, the increased supplies correlates to his increasing work with the National Governor's Association. Communication and Travel Expense is actually a reclassification of some expenditures that were in the actual year. It pays for a microwave link to his office. Printing and Copying, there is an anticipated increase in the number of...letters...to high school students in the state. He's very active doing that. Finally, Dues and Registration, $7,500 the first year and $8,500 the second year and those are increases for Western Governor's Association and National Governor's Associations dues.
Senator Raggio requested the total amount for dues and registration fees that are authorized in the Governor's Executive Budget.
Ms. Matteucci explained, "Those are the enhancements. About $83,000 the first year and $75,000 for the existing dues...."
Senator Raggio requested a list of the national dues and registration for all of the constitutional officers and "department heads" as they appear throughout the budget.
Senator Raggio remarked, "Last session, staff reminds us that $105,000 was provided for a new computer network and word processing system for the Governor's office."
Ms. Matteucci responded:
If you look in the basic expenditures in the Data Processing category, $79,717 was expended, with the balance forward that Dan just mentioned, with $27,000 being in the work program year. That computer networking was established. It networks both the Las Vegas and Carson City Governor's office and, as far as I know, they are perfectly happy with the networking system....They only have $27,000 left, so most of it is completed.
Senator Raggio noted in the Data Processing category there is a carry forward of approximately $l0,000 and asked for an explanation.
Ms. Matteucci answered, "The $l0,000 each year paid for programming as a result of the new system and an alarm hookup for the Las Vegas network...."
Ms. Matteucci distributed Exhibit C, "Elected Officials, Information Technology/Services Impacts," to the committee and testified while referencing that document.
Ms. Matteucci stated Exhibit C is part of the recommendation to consolidate all the information and technology services, i.e., the data processing and telecommunication positions, into the centralized budget called Information Technology Services. She maintained the consolidation will save the State of Nevada $80,000 the first year of the biennium and $162,000 the second year. She asserted, "There is no anticipation these positions would be moved from the budgets where they are currently located."
Governor's Mansion - Page 5
Ms. Matteucci declared the budget provides for operating and maintenance expenses for the staff of the Governor's mansion. "In the Base budget there are very few differences in the base decision. The classified salary pays for two positions, a Mansion Coordinator and a Cook. There is very little increase recommended in that particular item...," she noted.
Senator Raggio assigned Senator Jacobsen the responsibility to visit the Governor's mansion and report back to the committee whether the budget is adequate.
Controller's Office - Page 47
Darrel Daines, State Controller, distributed Exhibit D, "Program: Controller General Account," to the committee and testified while referencing that document.
Mr. Daines outlined to the committee the Office of the Controller is responsible for processing, recording and reporting the financial activities of the state. The controller is also the state fiscal officer for the federal government and, as such, is responsible to keep all records accessible in connection with administration thereof with the federal revenue and income tax laws.
To comply with the direction of the Nevada Constitution and Nevada Revised Statutes, the controller's office employs a staff of 34, he recited.
Continuing, Mr. Daines asserted that demonstration of the fiscal health of the state is accomplished through the publication of the Comprehensive Annual Financial Report. Mr. Daines asserted that report is assembled under certain exacting standards and is essential to the issuance and selling of bonded debt. Mr. Daines proudly reported his office has received four consecutive Certificates of Achievement for Excellence in Financial Reporting from the Government Finance Officer's Association (GFOA).
Mr. Daines noted for committee information that he received the final budget just last Tuesday and advised the areas of substantial disagreement were outlined on Exhibit D. He pointed out his agency requested $1.5 million for personnel expenses in FY-1994 and the Governor recommended $l.l million. He explained:
What they have done...is transfer all my data processing people from the controller's [office] to central data processing. That puts me out of the business of fulfilling my constitutional responsibility to maintain the financial records of the state. I cannot do it with those people not responsible to me....We will ask that those funds be re-established. What they did was, they turned around and increased the amount we would be paying to central data processing by the amount of money that they deleted from our salaries. So...they'll give us the same amount of money to give back to central data processing....
Senator Raggio interjected, "The $502,000 and the $446,000, essentially?"
Mr. Daines replied in the affirmative and declared:
With the exception that one of the things they did was they took the actual salaries of our data processing people and reduced them by the amount they anticipated that they're going to be able to save through their consolidation of data processing. So their figure down below has been reduced...by a percentage to represent the savings that they're going to assign to the controller's office in data processing.
Senator Raggio asked how many positions were being transferred.
Mr. Daines responded 10 positions are being transferred, however, two of the positions have not been filled yet and "we will not fill them until the economy is such that it will allow."
Senator Raggio restated, "There would be eight positions now filled to be physically transferred to [central] data processing?"
Mr. Daines deferred to Mr. Ken West, Chief Deputy Controller, Office of the State Controller, for further explanation.
Mr. West emphasized there are two current vacant positions; a key punch position that will not be involved in the data processing transfer and a Microcomputer Specialist authorized in the previous legislative session that has not been filled. "So there's nine bodies that are actually going to be transferred...and one vacant position," he explained.
Senator Raggio iterated, "So there are nine bodies and one vacant position that are involved in the amount indicating the transfer?"
Mr. West responded in the affirmative.
Senator Raggio noted, "You've been cut from actual in staff training as well as travel, was that...based upon the fact that you are transferring out these positions if the Governor's recommendation is followed?"
Mr. Daines replied, "This is one of the places that we were able, the last 2 years, to reduce some of the expenditures and revert some of the money back to the General Fund. We eliminated all the travel we possibly could....That's why you see the actual in In-State Travel in l992 as low as it is...."
Senator Raggio requested more information regarding reduction of staff in the data processing area. He asked, "How do you see that affecting your duties as controller and why are you not able to rely upon the information in the product of the data processing central agency, if those transfers are made?"
Mr. Daines explained the Office of the Controller issues approximately 50,000 checks each month. The problems associated with having all of the data processing in an area uncontrolled by the Office of the Controller would pose serious problems. He stressed, "We have certain internal controls within our operation that we rely on to make sure that the people, the programmers and the operators, that have access to our financial records that could alter the financial records of the State of Nevada resulting in the check being issued to an improper person." Mr. Daines declared supervision of that activity can be better controlled through the Office of the Controller. He pointed out that the accounting industry is no longer leaning toward central data processing, moreover, he advised, "It is a more accountable approach to maintain the responsibility with the in-house agency."
Senator Raggio asked if the Office of the Controller currently has the computer hardware to maintain such a function.
Mr. Daines responded:
The legislature many years ago gave the controller the authority to have his own computer and his own people to operate the state's accounting system. This flies in direct violation of the statute that exists right now that says the controller can maintain that.
Continuing, Mr. Daines referenced the Operating Expenses category:
We requested $227,800 [and] the Governor recommended $2ll,300. Again, this is a percentage figure they arrived at because they were moving some of the people out of our office....The Equipment we requested $l,628, they allowed $l,628. Data Processing we requested $l51,067, they allowed $6l,694.
Senator Raggio asked on what was the request based.
Mr. West clarified:
The Governor's budget and controller's budget are structured slightly different with different assumptions; $l50,l67 assumes we continue paying the lease on a Hewlett Packard and software associated with it...in the one-shot. The one-shot was for 2 years for purchase of hardware and software to improve the accounting system. The Governor's budget assumes that lease was paid off using l993 appropriations....
Mr. Daines stressed:
Do you recall last session...I made my request for the one-shot money to acquire the...upgrade to the equipment that we had. We asked both for the money for the equipment itself and software.
Senator Raggio asked if the appropriation for $469,000 was the amount authorized to upgrade the data processing equipment to meet increased requirements for the cash management and the accounting systems.
Continuing, Mr. Daines explained the status of the request:
At the time we made the request...we had anticipated this on our determination that we needed a Model 980. We made an additional study and found out that we could...save some money if we went with a Model 960 instead of a [Model] 980. But before we could issue the purchase order for the [Model] 960, Hewlett Packard came up with a brand new unit that was much less expensive, faster...and more productive than the [Model] 980 and we wound up saving an almost indecent amount of money...by going with the [Model] 967....
SENATE BILL 336
OF THE SIXTY-SIXTH SESSION: An act making an appropriation to the office of the state controller for expenses relating to the improvement of the existing computerized financial management system; and providing other matters properly relating thereto.
Mr. Daines read an excerpt from Senate Bill 336 of the Sixty-sixth Session:
...There is hereby appropriated from the state general fund to the office of the state controller, the sum of $469,664 for expenses relating to the improvement of the existing computerized financial system including the upgrade and enhancement of computer software, hardware and maintenance contracts....
Mr. Daines explained that he requested authority, approximately 3 months ago, to enter into an agreement with the firm of Peat Marwick to complete a study of the possibility of using the FAMIS [Financial Accounting Management Information System] system. He asserted, "We got the computer on a 5-year lease purchase. We could use the money that you appropriated in this bill to pay off the total fee and then start over again with you and ask for the money to do the study...." Mr. Daines explained he has been unsuccessful in obtaining permission from the State Board of Examiners to enter into that contract.
Senator Raggio asked for further explanation.
Mr. Daines asserted the FAMIS would allow the Office of the Controller to implement the cash management system.
Senator Raggio asked if appropriated funding remained with which to accomplish the study.
Mr. Daines responded in the affirmative.
Senator Raggio asked for further explanation why the request was denied by the State Board of Examiners since funding was available.
Mr. Daines responded, "... We had a hard time even getting it on the agenda. It was blocked from going on the agenda for two meetings and I finally had to go to the Governor to get it to be put on the agenda."
Senator Raggio asked, "How do you get on the agenda?"
Mr. Daines explained the Clerk of the State Board of Examiners "controls the agenda."
Senator Raggio asked, "Who is that, Judy [Matteucci]...?" He opined, "It seems to me, an elected officer ought to be able to get on an agenda with the [State] Board of Examiners."
Mr. Daines agreed, "That's what the Governor said."
Senator Raggio asked what was the current status.
Mr. Daines explained that he acquired the equipment in order to be able to provide services to additional agencies in state government so they too could access the accounting information from on-line capacity.
Senator Raggio asked what would the study accomplish.
Mr. Daines deferred the question to Mr. West. Mr. West explained the study would address the issue whether the software was compatible with the existing computer system as well as identify the type of database and operating system that would be most effective. Continuing, Mr. West explained:
...They were going to outline what work had to be done to move the general ledger, which we call FAMIS, into the Controller's environment. It had to be moved in such a manner that it interfaces with Purchasing [Division], the Budget [office], with DOT [Department of Transportation] and payroll were not disturbed....We don't have the resources in the controller's office to address those changes, so it had to be done in an environment that's almost transparent to agencies....We have two general ledger systems that we're operating now....In essence, we've got two sets of books and we keep them connected....
Mr. West stressed, "Neither general ledger system contains adequate tools for managing cash...." He asserted that function was a very laborious manual activity and was one of the main reasons he desired to acquire the FAMIS system.
Senator Glomb emphasized one of the issues addressed in the last session of the legislature was the proliferation of every state agency purchasing its own software and hardware systems. She asserted, "I'm still not clear why every department that handles cashflow...needs their own separate accounting system."
Mr. Daines declared, "...Everyone is moving away from the big iron monsters of central data processing into...processing where many of the agencies now control all of the data...."
Mr. Daines asserted:
Ten years ago when I came here, I asked for additional time on the state's central data processing system in order to accomplish some of the things that needed to be done in the controller's office. We were not allowed the appropriation, nor the additional time on the computer, because we were funded out of the General Fund. There were many agencies in state government that were funded with federal grants and they could use federal grant money to pay for the data processing services. So we were denied further access to the central data processing. Four years ago, we...requested funds to tie into the statewide network and again we were refused. Everything we have done in our agency has been done because we had to and there was no other way to accomplish what our constitutional requirements were....We must [emphasis] have the data processing operation that we currently have, and we need to expand it as fast as funds can be made available for us to expand it....
Mr. Daines pointed out that l0 years ago there were 34 employees in the Office of the Controller. To date, there are only 32 employees. He maintained, "...and we're doing about 60 percent more work than we were...."
Mr. Daines reviewed the Cash Management Improvement Act and its impact on the State of Nevada accounting system. He asserted:
The federal government has suddenly realized how much money they're losing by having government agencies across the country drawing down federal grant money before they really need it. So they passed the Cash Management Improvement Act, which basically says you can't draw that money down until you spend it....What the act provides is, if we draw the money down before we need it, we have to pay the federal government interest....We have some agencies that have been advancing money for federal projects. So the act says if you have to advance your own money for a federal project, then we'll pay you interest. Where...they would like us to get to is an interest-neutral position so we don't owe them any interest and they don't owe us any interest. But it requires a tremendous amount of accounting and we don't have an option on it now....
Senator Raggio called attention to Page A-26 of the Governor's Executive Budget and pointed out the narrative regarding the supplemental appropriation of the controller's office. The narrative states a one-time appropriation is recommended for the state controller's office to allow for a needs assessment for a new statewide accounting system or changes to the current system that will make it more usable for the executive branch. The need for a new accounting system was also pointed out by the Commission on Governmental Reorganization. Senator Raggio asked Mr. Daines to comment.
Mr. Daines declared his office wants to use the available funding remaining from the appropriation previously mentioned to allow Peat Marwick to conduct a needs assessment. Expressing his concern, Mr. Daines asserted the one-shot being suggested by the budget office would, in effect, delay that study until the next biennium wherein he would have to wait until the legislature meets again in l995 in order to implement the study.
Senator Coffin expressed his concern that the Office of the Controller should function as auditor of the State of Nevada to serve as "the check on the other two major officers of the state." Senator Coffin asked Mr. Daines if it was his duty to audit the Office of the Treasurer.
Mr. Daines responded, "No."
Concerned, Senator Coffin asked, "Who is our state auditor? Who is the person...who checks?"
Mr. Daines drew attention to the Constitution of the State of Nevada and read the following excerpt:
...The designation of the Controller in Article IV, Section l9, is of its own force. Positive delegation of powers usually incident to the Office of Controller, Auditor, Audit Controller General, Auditor General or any of various names used to designate similar offices....
Mr. Daines declared the Office of the Controller has the constitutional responsibility to audit claims. However, he stated, "We don't audit the claims because the budget office audits the claims....We haven't complained about that simply because they do a good job...."
Senator Coffin expressed his concern over that responsibility being delegated.
Mr. Daines advised the committee that the legislature, by statute, removed that function. Continuing, he pointed out, "It's just like payroll. The legislature left us with the responsibility but gave the personnel department the money to operate the payroll. They took away our ability to audit the claims by giving the budget office the money to audit the claims."
Mr. Daines asserted, "We could come back to you and ask for the money so we could audit the claims....Right now...we get a copy of the claims, we don't get any of the backup, we wouldn't have the ability to audit the claims from that standpoint. We do have statutorily the authority to approve the payment of claims if the [State] Board of Examiners fails to do it...."
Senator Coffin asserted:
Maybe it can be demonstrated by the budget office that the shift of the computing responsibilities is workable and would still allow you an audit trail of some kind....The supreme function of your office, in my opinion, ought to be watching the money and making sure...that we don't have expenditures that are improper....
Mr. Daines proclaimed:
When I was the controller for Clark County that's exactly what we did. We did audit all the claims....When I came up here, I was a little...bit surprised just how many duties had been taken away from the controller over the years and housed with other agencies. Many of the duties are in the Department of Commerce now and others are in the budget office....
Senator Coffin disclosed, "So the voters might be thinking that your office has more power than, in fact, it really does, because they may be voting for you thinking you are the watchdog when, in fact, you are not."
Mr. Daines agreed and added, "We've lost a lot of the power, there's no question about it."
Continuing his testimony, Mr. Daines asserted the Office of the Controller pays central data processing $24,000 per year for use of their printer. He maintained to purchase a printer for the controller's office at a cost of $20,000 would be more cost effective. "...I think it makes a lot of sense for us to have our own computer, and we'd be able to exercise still better control over the blank check stock...," he proclaimed.
Mr. West contended the cost of the FAMIS would be approximately $259,663. He pointed out the request was not recommended by the Governor, however.
Senator Glomb suggested Karen Kavanaugh, Director, Department of Data Processing, be called upon to address the issue.
Karen Kavanaugh, Director, Department of Data Processing, testified in response to transferring personnel from the Office of the Controller to the Department of Data Processing:
The intent of the Governor's reorganization in the data processing arena is to negate the fragmentation that Senator Glomb mentioned. It will not [emphasis] affect the functions in the controller's office, nor will it affect its internal controls. It will have information systems, people reporting organizationally to a single entity so that we're all heading for the same strategic direction.
The industry is indeed moving toward distributive data processing but, at the same time, the role of the mainframe is changing. Instead of doing a lot of the number crunching...it will serve as a giant file server which says we can retain data in one centralized place, distribute it out where it's needed and in the controller's office...can do whatever processing they need on their computer to get where they need to go.
The state's mainframe is connected with just about every state agency today....The controller's attempt to study the FAMIS, I have to point out he's requesting $l65,000 to pay Peat Marwick to assess whether Peat Marwick's $200,000 system will work....
Also, the controller's office upgraded his hardware before they looked at this issue. That's inconsistent with a feasibility study. You really ought to take a look at your need first and define it....It was kind of the cart before the horse, in this instance.
I have some difficulties with the...feasibility study itself. The way it's being planned, the intent is to interview only the state treasurer and state controller's office. We maintain...that you need to interview at least a sampling of your user....Let's just find out what you need and we'll look at the product. If you already know the product fits the needs, then I don't understand the need for the study.
...As proposed by the controller's office, state agencies would not be able to connect to the state controller system through the mainframe any more. They would require separate hardware...software and communication software. I know they're shaking their heads no, but every time I've asked how they intend to do that, the answer is that most of them already have modems and PCs [personal computers] and all we have to do is buy a few modems. What it's going to require, then, is two different terminals on a worker's desk, one connecting to the controller's system and one connecting to the mainframe.
We don't necessarily take the position that his general ledger system should run on the mainframe. But we definitely believe he should be connecting through the mainframe because that enterprise network is already there.
Senator Glomb asked Ms. Kavanaugh for clarification:
With the centralizing of the data processing personnel, bringing people that are doing that function in the controller's office into your office...the information still comes from the controller's office. They still have control over the information itself which allows them to maintain their autonomy even though the function of data processing is done in your office.
Ms. Kavanaugh answered:
...I should point out that central data processing has been eliminated in the Governor's reorganization. There won't be one. My staff is also being blended, so it's a new entity, about 330 people. The people in the controller's office that would be affected would report organizationally. That is, they would follow the same standards, follow the same strategic plans, but they would not necessarily be physically moved. All the functions that are being performed currently in the controller's office may still remain there....
Senator O'Donnell asked, "What kind of protocol do you use to interface between the Gaming Control Board, which uses a deck computer, and your IBM mainframe?"
Ms. Kavanaugh responded, "You've just left my realm of reality."
Senator O'Donnell countered, "Then how can you make statements regarding protocol used from the HP [Hewlett Packard] to your IBM mainframe and say it isn't compatible?"
Ms. Kavanaugh replied, "I didn't say that."
Senator O'Donnell commented, "You said it would not transfer data over."
Ms. Kavanaugh answered, "All I'm saying is, I think you should use the mainframe to connect through from his HP[Hewlett Packard]. We're still connected with him, I'm not suggesting that it's not connected."
Senator O'Donnell countered, "Well you are connected with him and there is data transfer."
Ms. Kavanaugh responded, "There is until February l; they're planning to cut that interface."
Senator O'Donnell asked what was the reason for eliminating the interface.
Barry Morgan, Manager, Data Processing Services, Office of the State Controller, came forward to respond:
...We aren't cutting. We do talk to the IBM. We have talked to the IBM as long as I've been data processing manager, for 10 years we have communicated. We do not [emphasis] intend to cut that communication February l, all we plan on doing February l is moving our data off the mainframe on to our HP computer and processing on the computer. We are currently hooked up to 70 agencies, none of those agencies have two PCs or terminals on their desk. We have a site license to the software that connects them, we give them the software free....We have never, never, as long as I've been data processing manager, ever gotten a request from DDP [Department of Data Processing] or any agency to access the data on the IBM system...on line. We access on line now. We provide 70 agencies that information.
Two years ago, we were asked by DDP to participate in a disaster recovery system for the state that was audited with us. We participated in that and that committee, DDP and the facility, have no disaster recovery in the system right now. We felt our system was so sensitive that we needed that disaster recovery system, and we do have one in place. Had we gone with DDP and pursued the direction they are going, we would not have a disaster recovery system.
Two years ago we were audited and they said you need security...on your system. We felt that the security at DDP was not enough and they are currently...implementing some security. We have had it on our system for 2 years. We feel we can provide efficient service with our computer and I think we have.
Senator O'Donnell questioned Mr. Morgan, "In the survey that you're doing, I think there's been a misunderstanding as to the feasibility study....When you bought the computer 2 years ago, you bought it with obviously an operating system and some software to run some application programs, is that correct?"
Mr. Morgan disclosed:
We upgraded our computer. We've been running on a Hewlett Packard computer as long as I've been at the controller's office, l2 years....We didn't purchase the system new, we upgraded the system...for the purpose of providing agencies the on-line service and it was our intention at the time to move some of the data from the facility to the HP machine. That's why we were able to benchmark the data on the IBM machine and compare it to similar HP machines....That's why we were able to look at less costly machines.
Senator Raggio assigned Senator O'Donnell and Senator Coffin as a special subcommittee for the Office of the Controller's data processing issue.
Senator O'Donnell avowed:
It is true when Ms. Kavanaugh says that the mainframe processor is in a migration toward a file server. But that file server transfers the data processing people with the file server. Wherever the file server goes, you don't transfer the people. You use that as a calculator....
I guess the philosophical question is whether or not the controller's office should be autonomous. Since he is an elected official and has to report to the public, I'm not sure we shouldn't go with that direction because of the autonomy it gives the rest of the executive branch.
Ms. Kavanaugh responded:
You did hit on the issue. In NRS [Nevada Revised Statutes] 242 [Chapter 242 of NRS], which is the section of the statutes that gives us our guidance, does include elected officials. Therein...lies the issue that you just brought up. As long as elected officials are in NRS 242 [Chapter 242 of NRS], I, or someone like me, is probably going to be looking over the elected official's shoulders questioning what they are doing.
Mr. Daines interjected to note he is seeking legislation that will eliminate elected officials from answering to any appointed official. Continuing, he declared, "We're also asking not to submit our budgets to the Budget office except for inclusion in the budget document. We will submit our budgets directly to the legislature....We think we are entitled to make our representation to the legislature, not through an appointed official."
Senator Raggio recognized those concerns and added that constitutional officers always have the opportunity to address their own budget before the Senate Committee on Finance.
Mr. Daines concurred and added, "True, but it's much more difficult to come in and right off...go on the defensive. Because it's three times as hard to defend the budget from someone that has already run it down...."
Senator Raggio directed the subcommittee meet with Mr. Daines on that issue.
Lieutenant Governor - Page l4
Sue Wagner, Lieutenant Governor, testified on behalf of the budget for the Office of the Lieutenant Governor.
Ms. Wagner commented her budget was a "hold-the-line budget...." She highlighted various areas:
...There are some reversions of $ll,412....The Maintenance budget, we have increases in insurance assessments and fringe benefits...and we have a reduction in state-owned building rent. In the Enhancement budget, we do have some changes as the Governor recommends which you may want to explore in terms of questions....
Senator Raggio asked if the enhancements were for In-State and Out-of-State Travel.
Ms. Wagner responded in the affirmative.
Senator Raggio asked if the increase in travel was indicative of additional responsibilities placed on the Lieutenant Governor.
Ms. Wagner responded in the affirmative and explained:
Let me start with the out-of-state travel demands. I think some of you know that not only am I a member of the Lieutenant Governor's National Conference, but have been recently elected as chair of the Task Force on Economic Development, which fits in very nicely with my jobs in this state. In addition, I've been recently selected as a member of the executive committee of that organization and because of that there are new responsibilities and I will be travelling more under their auspices.
Also, we will be hosting the National Lieutenant Governor's Conference in this state for the very first time in a decade....This year it will be in Las Vegas, this summer, August 8 through l2, and that will necessitate some...in-state travel with my staff back and forth....
Senator Raggio asked what facilities were being made available in the new state office building in Las Vegas for use by the Lieutenant Governor.
Ms. Matteucci stated a new office for the Lieutenant Governor has been provided in the new state office building in Las Vegas. Continuing, she added, "...It's covered in the rent, but there is a rent rate drop, so it's hard for you to see that."
Senator Raggio asked, "...Are there any material changes otherwise in the budget?"
Ms. Matteucci replied, "No, actually her operating recommendations are less than what she spent in the actual year."
Senator Glomb noted in the reorganization plan that the division of small business is going to be moved from the office of the Commission on Economic Development and asked if any major impact would be realized.
Ms. Matteucci added, "The small business office asked to be moved to be more in line with the business and industry concept and that's where they sit right now. I believe that's more or less in agreement with what the Economic Development Commission wanted."
Ms. Wagner concurred with Ms. Matteucci's explanation.
Continuing, Ms. Wagner expressed her appreciation to her existing staff for their continuing efforts with no new support. She also commended two staff members for taking voluntary furlough with a savings to the state of approximately $l,500.
Senator Raggio asked if clerical staff will be provided to the Lieutenant Governor after construction is completed at the state office building in Las Vegas.
Ms. Wagner explained no clerical assistance has been provided for the Las Vegas office.
Senator Raggio asked Ms. Matteucci if accommodations for clerical services could be provided for the Lieutenant Governor.
Ms. Matteucci responded, "As you know, there was no request made, nor recommendation for additional positions here. We can certainly look at some opportunities for providing additional clerical help to the Lieutenant Governor and report back to you."
Senator Raggio added, "I would think, until this situation develops down the road with the Lieutenant Governor's office down there, that somebody can make certain that some clerical help is available."
Senator Jacobsen asked Ms. Wagner if she felt there was anything else she could do to assist the Governor in his role.
Ms. Wagner responded:
...I think that people underestimate the amount of activity that is really generated by serving as the chairs on Economic Development and Tourism. I think you can choose to do what you want, but I will be going to Washington in April, which is our annual visit where we visit with our congressional delegation, business and industry leaders, consulates, ambassadors and it has been very profitable for our state....Tourism has become...very vital to our state with the proliferation of gaming in other states and I spend quite a bit of time in that area and...I certainly am personally more than willing to take on some added responsibilities....
Senator Jacobsen asked if she has made use of the state office located in Washington, D.C.
Ms. Wagner replied she did use the Washington office and praised the staff at that location.
There being no further business to come before the committee, Senator Raggio adjourned the meeting at 9:55 a.m.
RESPECTFULLY SUBMITTED:
Dee Crawford,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
January 29, 1993
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