D r a f t O n l y A p p r o v a l P e n d i n g SUMMARY of PROCEEDINGS M A N A G E M E N T A U D I T C O M M I T T E E

COMMITTEE MEETING INFORMATION November 22, 2019 | 8:00 AM Liquor Division 6601 Campstool Road Cheyenne, Wyoming

COMMITTEE MEMBERS PRESENT Senator Senator Anthony Bouchard Senator Senator Tom James Senator (Chairman) Representative (Vice Chairman) Representative Chuck Gray Representative Representative Representative Cyrus Western

COMMITTEE MEMBERS NOT PRESENT Representative Tom Crank

LEGISLATIVE SERVICE OFFICE STAFF Matt Obrecht, Director Tamara Rivale, Legislative Counsel Abigail Boudewyns, Research/Evaluation Administrator Joy Segal, Program Evaluation Manager Karla Smith, Senior Program Evaluator Amanda Freund, Associate Program Evaluator Jonathan Sandoval, Associate Program Evaluator Donna Shippen, Associate Program Evaluator Brian Fuller, Staff Attorney

The Committee Meeting Summary of Proceedings (meeting minutes) is prepared by the Legislative Service Office (LSO) and is the official record of the proceedings of a legislative committee meeting. This document does not represent a transcript of the meeting; it is a digest of the meeting and provides a record of official actions taken by the Committee. All meeting materials and handouts provided to the Committee by the Legislative Service Office, public officials, lobbyists, and the public are on file at the Legislative Service Office and are part of the official record of the meeting. An index of these materials is provided at the end of this document and these materials are on file at the Legislative Service Office. For more information or to review meeting materials, please contact the Legislative Service Office at (307) 777-7881 or by e-mail at [email protected]. The Summary of Proceedings for each legislative committee meeting can be found on the ’s website at www.wyoleg.gov. PAGE 2 OF 9

OTHERS PRESENT AT MEETING Please refer to Appendix 1-02 to review the Committee Sign-in Sheet for a list of other individuals who attended the meeting.

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov PAGE 3 OF 9

EXECUTIVE SUMMARY The Management Audit Committee (Committee) met for one day in Cheyenne. The Committee considered a White Paper on progress related to the Children in Need of Supervision (CHINS) program evaluation and discussed the report with officials from the Department of Family Services. The State Auditor provided information regarding the State of Wyoming Comprehensive Annual Financial Report (CAFR). The Committee considered a short report entitled Review of Findings and Recommendations from the Department of Audit and Certified Public Accountants related to Wyoming Municipalities, Special Districts, and School Districts and discussed the report with officials from the Department of Audit Public Funds Division (Division). The Committee voted to request a bill draft requiring the Division to submit their audits to the Committee. The Committee received updates from the Department of Administration and Information and the Department of Enterprise Technology Services. The Committee considered a bill draft regarding the Business Ready Community Program and received comment from the Wyoming Business Council. Legislative Service Office Director Matt Obrecht provided updates regarding the Program Evaluation and Research Department. The Committee assigned projects to LSO for completion by the Spring 2020 Committee meeting.

CALL TO ORDER- NOVEMBER 22, 2019 Vice Chairman Barlow called the meeting to order at 8:14 AM. The following sections summarize the Committee proceedings by topic. Please refer to Appendix 1-01 to review the Committee Meeting Agenda.

APPROVAL OF MINUTES The Committee approve the minutes from its May 29-20, 2019, meeting without changes.

INTRODUCTION OF NEW STAFF Two new staff members of the Legislative Service Office were introduced: Jonathan Sandoval, Associate Program Evaluator, and Amanda Freund, Associate Program Evaluator.

DISCUSSION OF CHINS DATA WHITE PAPER Karla Smith, Senior Program Evaluator, and Donna Shippen, Associate Program Evaluator, provided an update on the current status of the CHINS program evaluation, including a review of the White Paper: Summary of CHINS Evaluation Data Requests. See Appendix 3-01.

Korin Schmidt, Director, Wyoming Department of Family Services (DFS) provided information about the potential benefits and challenges of sharing confidential juvenile data across agencies and answered Committee members’ questions. Director Schmidt explained that sharing data across agencies would better allow agencies to examine outcomes for CHINS youth, but that protections would need to be in place to comply with federal regulations which may inhibit the sharing of information. Director Schmidt said DFS has submitted a budget request for $28M to replace their legacy WYCAPS case management system with a Comprehensive Child Welfare Information System (CCWIS) to comply with federal reporting requirements. She also noted that the Wyoming Department of Health (WDH) is in the process of replacing their current Medicaid Management Information System with a new Wyoming Integrated Next Generation System (WINGS). The WINGS system includes a data warehouse which DFS may be able to mine for data on services and outcomes.

In order to track children across agencies, single identifier would need to be utilized. DFS and WDH have had conversations about data sharing, but not about creating common identifiers. DFS has not

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov PAGE 4 OF 9 engaged other agencies or the Judicial Branch, although Director Schmidt said a conversation at the state level would be worthwhile. While DFS has engaged Chief Information Officer Gordon Knopp; most of their conversations have been about leveraging existing systems.

The Committee requested Director Schmidt provide suggestions for focused study topics regarding CHINS, juvenile delinquency or juvenile health that the Management Audit Committee could consider. Director Schmidt suggested the Committee examine the subset of CHINS cases that have significant challenges, such as emotional disturbance and/or intellectual disabilities. There are few services for these children in Wyoming, agencies must look long and hard for treatment services, and services are very expensive. Director Schmidt said the Joint Labor Committee will be introducing draft legislation about a joint mental health task force. Often task force studies focus on adults; Director Schmidt has requested that the task force examine adolescent mental health service needs as well.

The Committee invited other agencies to testify regarding the CHINS White Paper study. Lily Sharpe, State Court Administrator, Wyoming Judicial Branch, provided information about the confidentiality issues of sharing data regarding child welfare, CHINS, and juvenile delinquency cases. In order to allow data sharing, there would have to be changes to statutes and court rules to allow the sharing of confidential court information. For example, Administrator Sharpe believes current Management Audit statutes are not clear on whether courts can provide confidential court information to LSO. Child identifiers would have to be designed such that the child’s identity is protected.

Administrator Sharpe introduced Eydie Trautwein, Wyoming Deputy State Auditor, to the Committee. Ms. Trautwein previously served as the Wyoming Supreme Court Children’s Justice Project Coordinator. Ms. Trautwein said the Children’s Justice Advisory Council (Council) is continuing to talk about data system integration and coordination. Several years ago, the Council did a study of juvenile cases. To access interagency data, the Council executed an interagency agreement with WDH and a cooperative agreement with county attorneys. All data had to be pulled manually. Ms. Trautwein thinks the child welfare module purchased as part of the Judicial Branch’s new FullCourt Enterprise system will be very useful. Administrator Sharpe said the child welfare module will be rolled out at the beginning of 2021.

PRESENTATION OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR THE STATE OF WYOMING Kristi Racines, Wyoming State Auditor, and Barb Wallace, CAFR Manager, Office of the State Auditor, gave a brief presentation regarding the responsibilities of the State Auditor’s Office with regards to the Comprehensive Annual Financial Report (CAFR) and the annual external CAFR audit. See Appendix 4- 01.

In addition to the CAFR audit, Auditor Racines said the State of Wyoming is required to have a single audit, also referred to as a compliance or Office of Management and Budget (OMB) audit. The State Auditor’s Office does not participate in this process. External auditors review each agency’s compliance with federal regulations for grants received.

Committee members expressed interest in having the external CAFR auditors present their findings and recommendations to the Committee. Auditor Racines concurred with the idea, barring any restrictions on the auditors’ ability to testify to a legislative committee.

DISCUSSION OF SHORT REPORT REVIEW OF FINDINGS AND RECOMMENDATIONS FROM THE DEPARTMENT OF AUDIT AND CERTIFIED PUBLIC ACCOUNTANTS

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov PAGE 5 OF 9

RELATED TO WYOMING MUNICIPALITIES, SPECIAL DISTRICTS, AND SCHOOL DISTRICTS. Joy Segal, LSO Program Evaluation Manager, presented the Short Report which reviewed performance audits conducted by the Department of Audit (Department) and financial audits conducted by independent certified public accountant for municipalities, special districts and school districts. The report identifies trends and presents example actions for the Committee to consider. See Appendix 6-01.

Justin Chavez, Administrator, and Rich Cummings, Audit Manager for State and Local Government, Public Funds Division (Division), Department of Audit, provided comment on the report. The Division agreed with the considerations presented to the Committee and answered Committee members’ questions regarding qualifications of Division staff, number of staff, number of entities the Division has responsibility for auditing, frequency of audits, and the Division’s other responsibilities.

The Committee asked the Division for recommendations regarding topics the Committee might undertake to make sure public funds are safeguarded and used as intended. Administrator Chavez said the issues identified by the LSO report mirrored much of what the Division produced in their September 2017 Report on Evaluation Requirements for Small Cities and Towns, House Enrolled Act Number 89 to the Joint Corporations, Elections and Political Subdivisions Committee. One of the identified issues is training of municipality, special district, and school district personnel regarding accounting practices and internal controls. The Division provides handbooks on their website, offers training, and works with audited entities to correct errors, but has no authority to mandate attendance or enforce audit recommendations.

Public comment on the issue of training was provided by representatives from the Wyoming Association of Municipal Clerks and Treasurers (WAMCAT). WAMCAT works closely with the Department of Audit and has teamed up with community colleges to offer training and certification for public treasurers. However, many municipalities are not members of WAMCAT.

The Committee voted to request a bill draft requiring the Division to submit their audits to the Committee.

DISCUSSION OF LEGISLATIVE FINANCIAL AUDIT FUNCTION PRELIMINARY RESEARCH Joy Segal, LSO Program Evaluation Manager, presented preliminary research related to legislative financial audit functions. See Appendix 7-01.

DEPARTMENT OF ADMINISTRATION & INFORMATION DISCUSSION WITH COMMITTEE Patricia Bach, Director, Department of Administration and Information, and Ralph Hayes, Program Manager, Employees Group Insurance (EGI), presented information regarding the Wyoming State Employees’ and Officials’ Group Insurance Benefit Program and an October 2019 memorandum to the Joint Appropriations Committee regarding recently announced premium rate increases. See Appendix 9- 01, Appendix 9-02 and Appendix 9-03.

Director Bach also presented concerns regarding the costs associated with vehicle maintenance as a result of the 2018 budget footnote requirement that motor pool vehicles attain a mileage of 150,000 miles before

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov PAGE 6 OF 9 replacement. The Committee requested that the Department prepare a data analysis of these costs for Committee members.

EXECUTIVE SESSION Chairman Perkins moved to resolve the Committee into Executive Session at 2:30 pm to consider confidential issues brought to the Committee by ETS.

OPEN SESSION Vice Chairman Barlow reconvened the Committee in Open Session at 2:52 pm.

DEPARTMENT OF ENTERPRISE TECHNOLOGY SERVICES DISCUSSION WITH COMMITTEE Gordon Knopp, State Chief Information Officer/ Director, Department of Enterprise Technology Services (ETS), provided an update on the work of ETS since the May 2019 meeting. See Appendix 10-01 and Appendix 10-02.

DISCUSSION OF BILL DRAFT 20LSO-0081 BUSINESS READY COMMUNITIES LOANS AND RECAPTURE Brian Fuller, Legislative Service Office Staff Attorney, presented bill draft 20LSO-0081, which was requested by the Committee at the May 2019 meeting. The proposed bill draft amends the Business Ready Community Program statutes. See Appendix 12-01.

Shawn Reese, Chief Executive Officer, Wyoming Business Council, shared concerns regarding the potential impact of the proposed amendments on how grants and loans are distributed through the Wyoming Business Council.

The Committee voted to amend 20LSO-0081 by striking lines 13-15 on page 5 of the draft bill. The Committee further amended the bill by inserting language after “grant,” on line 23, page 5 of the draft bill to require that the revenue recapture percentage for a project covered by a grant not exceed fifty-percent. Finally, the Committee amended the bill by directing staff to develop new language on page 6 of the draft bill requiring revenue generated by the sale of a project asset to be recaptured.

OTHER BUSINESS; COMMITTEE PROJECT REQUESTS AND DIRECTION TO STAFF The Committee assigned the following projects to Legislative Service Office staff for completion by the Spring 2020 meeting:

 Compile and analyze state agency audit management letters, including examining any corrective actions plans and following up to see if any action was taken.

 Summarize training that occurs for state agencies, special districts, and municipalities/towns/counties re financial requirements; who attends these trainings; and correlation between entities that attend trainings and audit findings.

 Compile a summary of state data management systems and their capacity to work together in the future, with particular focus on those entities involved in the CHINS process: DFS, WDH, the Judiciary Branch, etc.; ETS’ role in managing state data; potential issues and potential legislation to assist in coordination of the process; and how other states manage data.

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov PAGE 7 OF 9

 Develop a role/mission of the Management Audit Committee and the Research/Program Evaluation Division going into the 2020 interim.

 Draft a letter to Management Council requesting assignment of the Department of Audit, Public Funds Division, to the Management Audit Committee as a “home committee”.

MEETING ADJOURNMENT There being no further business, Vice Chairman Barlow adjourned the meeting at 11/22/2019 5:45 PM.

Respectfully submitted,

______Senator Perkins, Chairman

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov PAGE 8 OF 9 Committee Meeting Materials Index

Index Agenda Item Document Description Document Provider Number

1-01 Agenda LSO

1-02 Sign-in Sheet LSO

Discussion of CHINS Data 3-01 CHINS Data White Paper LSO White Paper

Presentation of the Comprehensive Annual 4-01 Comprehensive Annual Financial Report (CAFR) Wyoming State Auditor Financial Report (CAFR) for the State of Wyoming

Discussion of short report Review of Findings and Recommendations from the Department of Audit and 6-01 Certified Public Audit Review Short Report LSO Accountants Related to Wyoming Municipalities, Special Districts, and School Districts.

Discussion of legislative Legislative Financial Audit Function Preliminary 7-01 financial audit function LSO Research preliminary research

Department of Department of Administration & State Employee's and Official's Group Insurance 9-01 Administration & Information discussion with Plan memo originally to JAC Information Committee

Department of Department of Administration & Presentation: Wyoming State Employees' 9-02 Administration & Information discussion with Insurance Benefit Program Information Committee

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov PAGE 9 OF 9

Department of Department of Administration & 9-03 A&I Update Org Chart Administration & Information discussion with Information Committee

Department of Enterprise Management Audit Committee Report Department of Enterprise 10-01 Technology Services Information Request and Agency Updates Technology Services discussion with Committee

Department of Enterprise Department of Enterprise 10-02 Technology Services Department Narrative Handouts Technology Services discussion with Committee

Discussion of bill draft 20LSO-0081 Business ready 12-01 Business ready community program-amendments LSO communities loans and recapture

MANAGEMENT AUDIT COMMITTEE Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 200 West 24th Street • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • E-MAIL [email protected] • WEBSITE www.wyoleg.gov