MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
March 13, 2003
The Committee on Government Affairswas called to order at 8:15 a.m., on Thursday, March 13, 2003. Chairman Mark Manendo presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Mark Manendo, Chairman
Mr. Wendell P. Williams, Vice Chairman
Mr. Kelvin Atkinson
Mr. Chad Christensen
Mr. Pete Goicoechea
Mr. Tom Grady
Mr. Joe Hardy
Mr. Ron Knecht
Mrs. Ellen Koivisto
Mr. Bob McCleary
Ms. Peggy Pierce
Ms. Valerie Weber
COMMITTEE MEMBERS ABSENT:
Mr. Tom Collins, Excused
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
Nancy Haywood, Committee Secretary
OTHERS PRESENT:
Jeanne Greene, Director, State of Nevada Department of Personnel
Shelley Blotter, Personnel Analyst No. 3, State of Nevada Department of Personnel
Kim Foster, Chief of Administrative Services, State of Nevada Department of Personnel
Chairman Manendo welcomed all Committee members and visitors to the Committee on Government Affairs and called the meeting to order at 8:15 a.m. The roll was called, and he directed the secretary to mark Assemblyman Knecht and Assemblyman Collins present upon their arrival. Mr. Collins was in the Committee on Judiciary. As a reminder, tomorrow’s meeting was scheduled to begin at 9 a.m.
The Chair stated that the Committee had received a memorandum (Exhibit C) from Mr. John P. Comeaux, Director, State of Nevada Department of Administration, regarding the Petty Cash Account bill, Assembly Bill 153. A.B. 153 was a bill the Committee had amended and passed, but it had not been taken to the Floor of the Assembly yet. The Committee received the memorandum to read at a later time.
Chairman Manendo reviewed the agenda and stated that there were no Committee introductions listed. He opened the hearing on Assembly Bill 217.
Assembly Bill 217: Makes various changes regarding State Personnel System. (BDR 23-495)
Jeanne Greene, Director, State of Nevada Department of Personnel, introduced Shelley Blotter, Personnel Analyst No. 3, State of Nevada Department of Personnel. When asked if Ms. Blotter would be testifying, Ms. Greene stated she would be responding to questions. Ms. Greene continued her testimony on behalf of A.B. 217. That was a very lengthy bill with 41 sections, she stated. Because of that, the Department of Personnel had developed a one-page summary that she thought would assist the Committee members as they considered each aspect of the bill (Exhibit D).
The majority of the sections on the summary sheet clarified the authority to adopt regulations. Throughout the Nevada Revised Statutes (NRS), Chapter 284, the authority to adopt regulations was granted to either the Personnel Director or to the Personnel Commission. Historically, adoption of regulations had been a function of the Personnel Commission. The amendment requested would clarify that authority and would streamline the regulation adoption process.
The following sections were identified as “clean up” language sections. Section 3 clarified the authority to adopt regulations and stated that the Director of Personnel was responsible for conducting recruitments for the classified service only. Sections 4 and 39 were combining two different statutes, which had similar reporting requirements. That amendment would increase the ease of use of the statutes without making a material change in the requirements. Section 6 clarified the composition of the classified service. Sections 12, 17, and 28 were statutes to be amended to insure that the rights of individuals with disabilities were granted, to at least the federal requirements, as afforded them under the Americans with Disabilities Act. Section 27 clarified the authority to adopt regulations and clarified the definition of transfer.
There were four sections, according to Ms. Greene, that dealt with the hours of operation: Sections 1, 35, 37, and 38. Those amendments would allow agencies to determine which hours of operation would best suit their client population and maximize the resources of the agency. The requirement that agencies be open Monday through Friday, from 8 a.m. to 5 p.m., did not allow agencies the flexibility to offer evening and weekend services to meet client needs when staffing was limited. In a rural community, for example, satellite clinics offered in the evenings and on weekends would be possible in multiple communities rather than being limited to the community in which the main clinic operated.
Ms. Greene continued by turning attention to Section 24. That section dealt with the repayment of compensation liabilities. The amendment would allow an employee to use accrued annual leave to repay an overpayment of compensation. Currently, when an overpayment occurred, employees were required to pay it back with a personal check or a payroll deduction agreement. That change would allow an employee the additional option to apply a cash equivalent of his annual leave to repay that overpayment. That amendment would assist the state in its collection of monies due.
The last section, Section 36, was the designation of “bad debt.” The amendment would allow the Clerk of the State Board of Examiners the authority to designate compensation overpayments of $50 or less as a “bad debt” and to request that the Controller’s Office remove the debt from its books. That would simplify and expedite the process of removing a debt from the books when the cost to collect would exceed the amount due.
Chairman Manendo asked about the sections Ms. Greene was referencing on flexibility of hours, Sections 1, 35, 37, and 38. He wished to explore the effect on agencies that remained open on weekends or evenings at the present time.
Ms. Greene responded by stating that some agencies had the staffing that allowed them to be open during the evenings and on weekends. An example would be the Nevada State Museum. In the larger museums such as that one, the hours were often extended to include weekends. The smaller museums in the rural areas were not able to do that because of limited staffing. The proposed amendment would allow them to be open on Saturdays, for example, and closed on Mondays.
Assemblyman Goicoechea stated he was curious about overpayment of compensation, and the frequency of its occurrence. He was concerned that overpayment would occur at all if there was any kind of tracking in place.
Ms. Greene explained that there were times when employees were overpaid. Timesheets were occasionally late; “leave without pay” might be recorded for a time period after the checks were issued. In those events, the employee would be in an “overpay” status.
Mr. Goicoechea pursued his line of questioning by stating that, in most government agencies, there were regular pay periods such as from the first of the month to the fifteenth with the following Thursday being payday. Timesheets would surely be in place, he stated, before the agency was paying its employees.
Ms. Greene asked that Kim Foster, also from the Department of Personnel, be allowed to speak. Her expertise was in the area of the payroll section. She would be able to clarify the lag time in the payment of compensation to employees.
Kim Foster, Chief of Administrative Services for the Department of Personnel, stated that there were various reasons for overpayments to occur when processing payrolls. Occasionally it was due to errors. There was also a lag in pay under the old pay cycle before the department converted to the new pay cycle. Primarily, that was addressed with A.B. 217. At the time of conversion, there was an “anticipated work week.” The conversion resulted in an overlapping of a pay period, and employees were paid twice for the same week so that they would not lose any compensation. It was complicated and hard to understand, stated Ms. Foster. The “anticipated week” was payment by the system to employees for a week they were anticipating would occur. In doing that, if an employee were to go on leave without pay, there would be a possibility that the pay clerk would not catch that, and he would be overpaid. Additionally, because of the way it worked, there were times when an employee would work overtime and would not be compensated for that until the next pay cycle. In the new system, that issue was corrected. To do that, the payroll department overlapped a time period when the employee received compensation consistently and did not lose it. “In doing that, we accrued and reported liability from employees on the books, which would be deducted from the final paycheck when those employees left state service,” stated Ms. Foster. The amendment to the bill would give the employee an opportunity to use annual leave to pay back that pay for the “anticipated week” prior to his leaving state service.
Ms. Foster brought to the Committee’s attention a diagram that she had prepared that was available to Committee members. It would help explain the situation further, she stated, if the Committee wished to see it.
Mr. Goicoechea stated his concern that the Department of Personnel had been paying most state employees for a week that Personnel anticipated they would work. If they left service, they would owe that money.
Ms. Foster reported that, under the old “legacy” system, that was standard. That procedure, however, was replaced with the new system when employees were paid twice for the same week and then owed repayment equal to one week of that pay upon termination from state service.
Assemblywoman Koivisto admitted confusion as to why someone would take “leave without pay” when they accrued annual leave with which to pay back the time.
Ms. Foster denied that would happen.
Ms. Greene addressed that issue. At the point in time when an employee went on leave without pay, that employee probably had not accrued any annual leave time or sick leave. Currently, to recover the monies overpaid, an employee could not use accrued annual leave in repayment. That was to be corrected in A.B. 217.
Chairman Manendo asked Ms. Foster to provide the document she referenced during her testimony (Exhibit E).
Assemblyman Goicoechea again addressed the issue of overpayment. He said he assumed that every state employee had received two weeks’ pay for one week of service, which would have been a significant amount of money.
Ms. Foster reported that the overpayment was made to every employee of the state as of the conversion date of March 6, 1999. She also testified as to the amount of monies paid out in overpayment. The total sum was $8,707,054. Of that $8 million plus, about 30 percent of the monies owed had been collected equal to $2.6 million.
Assemblyman Grady confirmed that he was appalled by the information that, from 1999 to 2003, only 30 percent of the debt had been collected. That, he said, certainly was part of the state’s deficit. When he looked more carefully at Section 36, he had difficulty with the request that current employees’ debts under $50 be written off as a “bad debt” when the debt was for an overpayment of salary. To Mr. Grady, both of the referenced sections were “completely unacceptable.”
Chairman Manendo asked Ms. Greene to explain the cost attributed to the efforts to collect the debts.
Ms. Greene agreed to do so but wished to clarify first that employees who were employed long before the conversion in March of 1999, were paid in anticipation of the workweek to come. Rather than asking the employees to pay back that amount of overpayment at the time of conversion, which would have meant that employees would have lost a week’s pay, they were allowed to repay at the time of terminating their service with the state. When Ms. Foster was quoting the repayment amount as 30 percent of the debt, that reflected the number of employees who left state service and from whom the debt was collected, she said. The remaining amount would be collected when the other employees left state service. Rather than harming the employees by taking a week’s pay out of their current paychecks, they were allowed to pay it back when they left state service.
When the Chair repeated his request for information as to the cost per individual of recovering the debt owed, Ms. Foster drew attention to the fiscal note attached to A.B. 217. “We have identified that we attempt to collect within our department,” she stated. It would only be for those employees who were no longer in state service, not for current employees. The department had not been successful in collecting those debts. Rather than sending those uncollected debts to the State Controller’s Office for collection, she continued, the amendment requested that the clerk be allowed to write off those debts under $50. When those debts went to the Controller’s Office, time was billed at $20.61, postage for a certified letter was $3.90, and the collection agency’s service fee was $2.70 totaling $27.31. The average overpayment debt was $23.76. By pursuing the collection of those debts, the department would actually lose money. It was not a large number of debts; in 2003, there were 17 debts under $50.
Assemblyman Grady did not feel comforted, he responded, by that information. He remained concerned that, when people were paid twice, the statement that employees paid once would lose a week’s pay remained unexplained. He believed the employees gained a week’s pay.
Ms. Greene replied by restating that employees who were hired into state service were paid for an additional week that we expected them to work. She herself began her state service, she reported, in 1978. She was paid for that additional week. When the conversion in 1999 happened, she did not get an additional week’s pay at that point. She just received her normal pay. But, when she left state service, she would need to pay back that week she received back in 1978.
Assemblywoman Weber stated that if she had her own business and handled her payroll as the state did, she would bankrupt herself. Referencing Section 24, page 15, Ms. Weber asked for clarification on subsection 8. It appeared to be coming from the direction of the employee that the withdrawal of those funds occurred. She wondered at that approach.
Ms. Greene stated that an employee who had been overpaid would have to make the request that his accrued annual leave time be used to repay the debt owed. The employee would make the request, and the agency would have to approve that.
Ms. Weber restated her understanding that payroll did not initiate the repayment process.
Ms. Greene stated that payroll would identify the overpayment then would return the information to the agency that would then contact the employee and discuss the reason for the overpayment.
Ms. Weber asked if there had been refusal.
Ms. Greene stated that there had been cases where the employees indicated they had a hardship and could not repay the debt. She did not know of any cases in which the employee had refused repayment.
Assemblyman Christensen asked Ms. Greene to explain why, when she left state service, she would have to repay a week dating back to 1978.
Ms. Greene stated that it was actually the salary that she earned in March of 1999, when the system was converted, that would need to be paid back.
Mr. Christensen requested information as to the dollar figure of the payment owed and about any form of amortization of the debt.
Ms. Greene replied that it was a straight dollar figure.
Assemblyman Goicoechea asserted that employees of the state accrued annual leave at the rate of a day and a quarter per month. He was looking at a period of time that had stretched over 4 years when many employees would have been in state service for 20 to 25 years. He stated that, while doing the “housekeeping” on the bill, the debts needed to be cleared immediately. Clearly, the employees who had many years of service could carry as many as thirty days of annual leave that would not be used on an annual basis. He recommended taking care of the $6 million owed to the state for that week of overpayment.
Ms. Greene intended that with the language in the amendments to A.B. 217, she said. The language contained in the amendment would allow employees to do what Mr. Goicoechea had recommended upon passage of the bill. Employees would be able to offset that liability with their annual leave wiping the debt off the books. That action would become effective during the current year.
Mr. Goicoechea asked if that would be required. He suggested that employees begin the repayment process by deducting eight hours each month or trading in a day of annual leave per month immediately. He stated he could not fathom that the department would carry the overpayment on the books indefinitely. He would endorse the bill as long as Ms. Greene told him the department would clean up the situation in a timely manner, and Ms. Greene responded that that was the intent.
Assemblyman Hardy agreed with the intent to clean up the situation. As he read it, however, it remained permissible for the employee to agree to the repayment. The level of confusion that the Committee members had would probably be magnified when “we” went to each employee. That probably reflected the 30 percent collection level. Assemblyman Hardy remained puzzled by the thought that an employee would voluntarily give up a week of annual leave to repay the debt when there was no penalty for not doing that. In essence, those employees had received a loan of a week’s pay, interest-free, for four years. There were 9,000 employees who had that interest-free loan that would continue for some indefinite period of time; that would be what was called “a good deal.” There would be no advantage to the worker to pay off that debt when it could be postponed indefinitely. The rationale and the motivation remained unclear.
Ms. Greene talked with a number of employees, she affirmed, in several state agencies who reportedly felt that many employees would take advantage of the trading of annual leave time to repay their debt. One reason was the listing of that liability on every paycheck. Every time an employee received a paycheck the amount owed the state was listed. They were reminded on a bi-weekly basis of their debts. Ms. Greene reported that the expectation was that many employees would take advantage of that method for repayment so that, when they left state service, they would no longer have that liability.
Mr. Hardy responded by stating that every two weeks employees received a “letter” that said “you have had an interest-free loan for the last four years that you do not have to do anything with.” If there were an opportunity, he continued, to put a “shall” or a “must” in the amendment that would be a cleaner approach.
Assemblyman Hardy then drew attention to Section 32 that referenced drug testing. On page 20, subsection 2, lines 35 and 36, he expressed reservations about drug testing potential employees and about the wording, “controlled substance,” noted on line 34 and continued on line 35, and “other drug.” The term “other drug” was pretty inclusive, he stated. He also had concerns about the wording, “shall not hire the applicant” who had not met certain stipulations. One of those stipulations was the provision that, within 72 hours, a letter of certification from a physician that the drug was taken for medicinal or another legitimate purpose only be provided to the Department of Personnel so that the hiring determination would continue. If the drug test was given on a Friday, on Monday the doctor would get the call, but an appointment probably would not be available immediately. If the doctor had prescribed the drug in question, it was still unlikely that the physician would have time on that day to write a letter of certification. Assemblyman Hardy would have preferred that a minimum of five working days be allotted. Hiring that person would not seem to be a major emergency when compared to the time frame outlined in earlier statutes to protect the vehicle, the person, and fellow employees.
Ms. Greene supplied the information that “72 hours” was already in the statute. If the Committee wished to change that to three working days or five working days, the department would support that.
Assemblywoman Koivisto spoke of long-term employees and the change in pay periods made in 1999. When a person was being paid a lower salary during 1999 and decided to leave state service hopefully earning a higher salary in 2003, she asked what the payback rate would be. Mrs. Koivisto was uncertain whether employees would pay back what had been paid to them in 1999, dollar for dollar, or whether they would repay an hourly rate based on current rate of pay.
Ms. Greene stated that the amount the employees were expected to pay back would be the amount calculated in 1999. It would not be based on the higher salary rate.
Assemblyman McCleary wondered how the money was repaid when an employee left the state’s service. He asked if the money was taken from their final check or would that be on a voluntary basis.
Ms. Greene explained that the debt that would be cleared on that final paycheck was that debt owed resulting from the conversion overpayment in March 1999 and was withheld from their final check. Other overpayment debts were tackled more quickly.
Assemblyman Knecht reaffirmed with Ms. Greene that there was no interest charged for the “loan” and the payback would be a dollar for dollar amount. When he pursued the promptness of payback, should A.B. 217 pass as written and amended, his reply from Ms. Greene was that prompt payback was their hope and intent in putting the bill forward to allow employees to use annual leave time to repay their debts. Turning to the provision for departments to set their own hours, Mr. Knecht stated his support for devolving authority down to the level closest to the consumer and the recipient of service. However, he was concerned about the accountability regarding that matter. He wanted timely feedback if people were misusing the authority to set their own hours. As a legislator, he wanted to be certain that the authority was not being abused or inadvertently misused. He requested information as to how departments and agencies were providing that accountability currently
Ms. Greene stated the intent that most offices would remain open Monday through Friday from 8 a.m. to 5 p.m. The amendment would provide an alternative to serve the clients. The department could do a survey in six to nine months if the bill passed. The survey could ask for information as to what exceptions had been made and for what purpose. Additionally, the department might choose to know what client base those exceptions served.
Mr. Knecht stated he thought that would be an excellent idea without running up any significant amount of cost. He suggested a memo be written requesting that information and any feedback received from the public. That information would then be available during the next session as a “real time” record should questions arise.
Assemblywoman Pierce referred back to Mr. Hardy’s concerns in Section 32. The “controlled substance or other drug” language left her with questions as to what other drugs might be referenced.
Shelley Blotter responded by stating that “other drugs” could be those not prescribed by a physician such as over-the-counter medication or a health supplement that would show up in a screening test. The screening test would have markers that would look like a controlled substance, but, after review and evidence from that individual’s physician that it was not a controlled substance, the corrected information would be available to make hiring determinations.
Ms. Pierce requested additional information about the effect on the individual’s pursuit of a position in state service should that individual’s test results indicate that an over-the-counter drug was being used.
Ms. Blotter stated that, if it were picked up in the screening test and it mimicked a controlled substance, further testing would be done to determine the exact nature of the substance. The initial testing results would not be used against the individual in a hiring determination, but further testing was necessary to be certain what the substance was and whether its use was legitimate. She added that they would ask for certification of appropriate use by a physician. The reason for adding that language was, when the Legislative Counsel Bureau was reviewing other sections, “other drug” was included. We, therefore, added it to A.B. 217 as it was being drafted.
Eileen O’Grady, Committee Counsel, cited the following information for Committee members. In Section 32, subsection 1, it was stated, “the appointing authority shall not hire an applicant unless he submits to a screening test to detect the general presence of a controlled substance or any other drug.” The idea of “any other drug” was not followed throughout the rest of the section.
Ms. Pierce asked for an explanation of the next step if someone submitted to the drug test and the use of an over-the-counter drug was indicated.
Ms. Blotter said that typically there would be another drug test to determine what the substance was, as the second test was much more specific than was the first. Her information, she stated, was from a subject matter expert in that field.
Chairman Manendo was curious about the inability of the first test to give that information.
Ms. Blotter replied that, normally, the first drug screening was used to indicate use of key controlled substances. The screening was not done to determine use of over-the-counter medications. The markers were for major drug groups: cocaine, methamphetamines, marijuana, and that kind of drug. Using ephedrine as an example, Ms. Blotter stated it might be detected and identified as a methamphetamine drug. Only through more specific testing would the drug be identified as the substance found in many over-the-counter diet supplements and hay fever and cold medications.
Assemblywoman Pierce questioned whether the applicant had to submit to a second test or was the specimen used for the first test also used for the second test.
Ms. Blotter stated that she did not know the answer to that.
Assemblyman Hardy spoke as a person who occasionally was involved in drug testing in his disclosed profession as a family physician practicing in Boulder City, Nevada. As he examined Section 30, page 18, lines 44-45, “he has consumed any drug which could interfere with the safe and efficient performance of his duties and may require the employee to obtain clearance from his physician before he continues to work,” he noted that there were two very different standards that were being discussed. Section 30 dealt with the employee who was already hired; Section 32 dealt with the potential employee. Different language was used. The definition of “other drug” in Section 30 eliminated the word, “other,” but, in Section 32, lines 29 and 35, the word “other” was inserted. Reality was that a patient would come to a physician and say, “I got this test, and this was what I was taking.” The physician would ask about the beginning date, the dosage, and the last dose taken. The physician would then write a letter that stated that his patient had taken his over-the-counter drug medication legitimately. He had stopped taking the medication, so there would be no need for further testing for cross-reactivity. Another test could be given, but the reality was that the physician would determine the circumstances of what happened and would be able to extrapolate the likely consequences thereof. A questionable first test would not necessarily lead to a second laboratory test that would increase the cost of care, but would allow the individual to obtain a note. It was the 72-hour time frame needed to acquire that note that was a concern. Five working days would allow enough time for a person to make an appointment, see the doctor, describe the circumstances, and to state what was needed. No doctor would do that certification over the phone. Not every “false positive” or “cross-reactivity” result would lead to another test “to prove that a cold medicine was taken, but the person had stopped after a period of time.”
Ms Pierce questioned Section 28. The language in that section was described as bringing into line what was needed for compliance with the Americans with Disabilities Act. She requested further clarification.
Ms. Blotter responded that Ms. Pierce was correct. Under the Americans with Disabilities Act, the Department of Personnel would be responsible for insuring that a person with a disability was provided the same consideration as any other applicant or employee. The department would supply reasonable or effective accommodations so that the individual would enjoy the same rights and benefits as other employees.
Assemblywoman Weber returned to Mr. Hardy’s area of exploration on Section 32, page 22(b), “certification by physician” regarding the drug that was taken for legitimate purposes. She wondered if the individual employee was required to go to his personal physician to get the needed information. Having done pre-employment drug screening in a prior career, the laboratory that the state contracted with typically had a physician on staff who interpreted those readings and would be able to explore that with the individual employee or potential hire. That certification would be available through that party. Her concern was that, in the event a person was without health care insurance, that individual was spending monies in order to be considered for hire by the state.
Ms. Greene stated that the language stated “certification by a physician,” so that could be the physician with the lab or a person’s personal physician, she thought. Ms. Greene did not know if a lab physician would be in a position to accept that responsibility, however.
Mr. Hardy again stated that the reality was that when a physician attested to what an individual was or was not doing, that physician had to have some input from the individual. As a physician working in a laboratory, it would not be possible to certify legitimacy of use without having interaction with the person whose test you were examining. The “other drug” still was unsettling to Mr. Hardy, he said, unless it was worded as in Section 30, which defined the “other drug” as “any drug that could interfere with the safe and efficient performance of his duties.” Any time one used the term “other drugs” that opened up a gamut of medications, even aspirin, Tylenol, and whatever else people used to self-medicate.
The Chair suggested that a subcommittee be formed and that Mr. Hardy be one of its members.
Ms. Pierce was still concerned about the term “other drug.” She stated that it seemed very loose to her, and that what was needed was a much more detailed description of how the testing worked, how the applicant was notified, and other information needed to determine employability. She believed that language concerning drug screening needed careful consideration and possible revision.
As no further witnesses came forward to speak in favor of or in opposition to the bill, Chairman Manendo closed the hearing on A.B. 217.
Assemblyman McCleary affirmed his support for the Chair’s suggestion of the formation of a subcommittee to further study A.B. 217. He felt that a subcommittee was definitely warranted.
Chairman Manendo recessed the Committee at 9:07 a.m. and reconvened the Committee meeting at 9:50 a.m. The Chair directed Committee members’ attention to A.B. 216, and stated that the Committee was not going to act on it at that time. He did ask Ms. Scholley, however, to go over the document for the convenience of the Committee. (Exhibit F)
Ms. Scholley presented the work session document on A.B. 216. The bill, she reminded Committee members, had been heard at the previous day’s meeting. The bill changed the internal audits in the Division of Internal Audit from a pre-audit to a post-audit function. There had been questions as to why the change was necessary. Attached to the work session document was background information that would explain the changes in the Division of Internal Audits. She clarified that the information was obtained from Paul Townsend, Director of the Audit Division of the Legislative Counsel Bureau (LCB). The information explained that the implementation of the Integrated Financial System (IFS) decentralized the expenditure process at the state agencies. Previously, the Division of Internal Audits would go to the Central Office, who would audit the expenditures; that process had been decentralized through the use of a new system, the IFS, and it was no longer possible to do pre-audits. Currently, the audits would be post-audits whereby a sampling would be checked to ascertain the use of proper procedures. Mr. Townsend indicated that IFS was implemented first through an appropriation in 1997 by the Legislature, and the appropriations had continued over the past three sessions, 1997, 1999, and 2001. The implementation itself had been an ongoing process.
With respect to questions pertaining to overseeing the process, Mr. Townsend advised that the Legislative Counsel Bureau audit division had identified the implementation of the system as a high-risk area. The process of implementation itself was currently being audited. That audit would be available later in 2003. Mr. Townsend further asserted that the Audit Division of LCB, the legislative auditors, did look at that area of expenditures when the routine state agency audits were done. The Fiscal Analysis division of LCB also provided some monitoring and oversight of state agency expenditures through the budget process.
Assemblyman Hardy restated his understanding that there was an internal audit, a post-audit, the LCB audit (as that was identified as a high-risk area), and the Fiscal Analysis Division audit.
Ms. Scholley corrected the misunderstanding about the Fiscal Analysis Division of LCB, which did not do audits. The Fiscal Analysis Division of LCB would review the state budgets and, in that process, would, in effect, provide some additional oversight of the process. That would not be an actual audit.
Mr. Hardy asked about the need for a pre-post audit since the LCB was auditing anyway.
Ms. Scholley stated that she was not the person to answer that question. She did say, however, that it was necessary to separate the Division of Internal Audits of the Executive Branch, which was responsible for the ongoing auditing of state agencies as part of an internal audit, from the audit of the LCB, which was an external audit of the Integrated Financial System being used by the state agencies. The LCB’s external audit would be a one-time audit to look at how the system was being utilized in a variety of state agencies and the issues, if any, surrounding that use. The LCB might identify recommendations for the Legislature of procedures that needed to be done differently, and it was possible that the Division of Internal Audits, the Executive Branch agency, would need to return for further changes based on the external LCB audit.
Chairman Manendo stated that the Committee was attempting, as a courtesy to Mr. Collins who remained in the Judiciary hearing, to postpone action on bills. If he were not able to come to Committee on Government Affairs meeting to voice his vote, the bills would be dealt with during the work session scheduled for the following day. The Chair was concerned about taking action on A.B.224 and A.B. 199 in the absence of Mr. Collins.
Assemblyman Christensen asked the Chair if A.B. 214 was one of his concerns. He stated he would be able to give information about the bill after meeting with the bill’s proponents slated to take place later in the day. The Chair affirmed that A.B. 214 would be discussed during the upcoming work session.
Chairman Manendo stated that it was the intent of the Chair to place A.B. 217 in a subcommittee. Members would include Mr. Hardy, Mr. Goicoechea, and Ms. Pierce as Chair. Those three members seemed most interested in that piece of legislation, stated the Chair.
Having received the information that Mr. Collins would not be able to be present in the Government Affairs meeting, Chairman Manendo asked the Committee members to promptly arrive by 9 a.m., as there was much business to attend to during the work session. He reminded the Committee that they were also scheduled for a tour on Saturday of county facilities and services in Douglas and Carson City Counties. The Chair adjourned the meeting at 10:02 a.m.
RESPECTFULLY SUBMITTED:
Nancy Haywood
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: