March 12, 2026 · State, Civic, Military, & Veterans Affairs · 19,835 words · 13 speakers · 204 segments
The State House Civic, Military, and Veterans Affairs Committee will come to order. Ms. King, please call the roll.
Representatives, bottoms. Bradley.
Here.
Carter.
Present.
Espinoza.
Here.
Foray.
Excused.
Froelich.
Here.
Locke.
Here.
Wynn.
Representative Wynn. Representative Wynn.
Valdez. Excuse. Clifford. Here. Madam Chair. Here. We have five bills on the agenda for today, and we'll start with House Bill 1252. Our sponsors are here, and it looks like Representative Morrow, you've been approved to join the bill. So welcome. Who would like to begin? You both pointed at each other. Representative Morrow.
Thank you, Madam Chair and committee members. This bill is brought to you today by us, but also the Colorado Department of Public Safety. This bill updates Colorado statutory framework for Homeland Security managing emergencies to better align with current operational needs. The bill designates the office of emergency management as the primary state agency responsible for coordinating disaster recovery efforts ensures that the personal identifiable information of disaster survivors is protected from public information requests and makes changes to better represent current practices. And I'll hand it over to my co-prime. Representative Bradfield. Thank you, Madam Chair, and thank you, Committee, for allowing us to present this bill today. Throughout the history of Colorado, we have had quite a few emergency incidents. Annually, we have snowstorms with car crashes. we've had certainly our share of wildfires and other events that bring on emergencies. And this bill will help make sure that the handling of the emergencies and the aftermath is more coordinated and efficient. It exempts this bill. We'll have key changes to statute. It exempts the PII of disaster survivors who register in the disaster survival portal from public information requests. And what I mean here is that current law does not explicitly address confidentiality protections for these disaster survivors. And without these protections, disaster survivors may be vulnerable to identity theft and fraud. The change to statute supports disaster survivors by protecting their personal information from public disclosure and giving them one less thing to worry about as they begin the disaster recovery process.
Madam Chair.
Representative Morrow. In addition to those changes this clarifies the lead role for recovery planning and response under the Office of Emergency Management In addition to the vision of Homeland Security and Emergency Management disaster recovery responsibilities are in the Department of Local Affairs and the Governor's Office of Climate Preparedness and Disaster Recovery. Other state agencies also play critical roles in disaster recovery, even though not called out in statute. Due to the complex nature of disasters and the federal government's shift in responsibility FOR RECOVERY TO THE STATES AND INCREASED BURDEN WILL BE PLACED ON THE STATES FOR DISASTER RECOVERY. THE BILL CODIFY THE EXISTING STATE RECOVERY TASK FORCE WITHIN OEM. THE BILL DOES NOT REMOVE ANY OF THE CURRENT DISASTER PROGRAMS AND OR AUTHORITIES FOR OTHER STATE AGENCIES THAT ADMINISTER DIFFERENT RECOVERY PROGRAMS. REPRESENTATIVE BRADFIELD. THANK YOU. This bill does update Colorado's statute to reflect operational needs and best practices in emergency management. The bill makes technical adjustments to statutes to reflect current practice and operations, including moves the Auxiliary Communications Unit from the Office of Emergency Management to the Office of Public Safety Communications. It updates references to federal grant programs. It updates membership in the Division's Homeland Security and All Hazards Senior Advisory Committee. It provides a more focused membership in the Cybersecurity Council. It gives the ability to award the nonprofit security grant in a more timely manner. and it allows the division to charge a private contractor for the use of its radio network. I know that our one and only witness can answer the questions that you folks have brought to me in the last day or two. And thank you for your attention.
Thank you very much, representatives. For the record, both Representative Ferre and Valdez have joined us. Welcome. Members, any questions for our bill sponsors? Seeing none, thank you both very much. We'll move into witness testimony. You are correct in that we only have one individual signed up to testify. So we'll call Director Kevin Klein. And then at this time, if there's anyone else that would like to make a comment, please come forward at this time. Welcome, Director Klein. The floor is yours for three minutes.
All right. Madam Chair, thank you very much. I appreciate the opportunity to be here. I'm incredibly proud to work with the men and women who make up the Division of Homeland Security and Emergency Management. I'm here in support of HB 26-1252, and I want to express my sincere appreciation to representatives Bradfield and Morrow for bringing this to you. And I think they did a pretty good job of summing it up. So I'll try to cut down on what I was going to show. This really does help better align us with our current operational realities. The division, you know, really was born out of the September 11th attack in 2001. And a lot of the programs that were put in place then, you know, some of the grant programs no longer exist. Some of the things that, you know, we were looking at back then were different than what we're looking at now. So there a lot of changes that have happened And then in the disaster recovery space we have a state disaster recovery task force that basically we codifying here It helps us. This will help us better align state agencies. We're not changing any authorities. We're not changing anything with other state agencies. But we are asking that we have a central place to do that. And then that gets up to the governor's policy group and talks about when we go into a long-term recovery. The disaster survival portal, that's where individuals can register and ask for assistance. And we think it's important that that be shielded from public disclosure. that's one of the things that we just didn't think about when we first did the statute to create the portal. The other technical adjustments that are there, one on travel reimbursement, just to make it consistent with state policy instead of a fixed dollar amount in statute. On the Cybersecurity Council, it really is just narrowing it down. more focused. Honestly, you know, it was the governor's cybersecurity council and it meant twice. But we have another group that does that more often, so we want to just bring those together. And then the private contractor for the radio network, just so you have the background of that, That is we host the weather equipment for mountain flying for the FAA, but we're upgrading our network, and so they need to upgrade along with our upgraded network, and that means the contractor is going to have to come in and pay us to do that. So this just allows us to do that and then keep those airports running. So with that, any questions?
Representative Luck. Thank you, Madam Chair. I actually have a series of questions. May I dialogue?
Yes.
Thank you. So, sir, my first question is as relates to the exemptions from disclosure piece. I understand the rationale behind that. I do note that in Section C on page 5 that some of this information will be shared or may be shared in aggregate form to different groups like local and state agencies, volunteer organizations, and federal partners. I'm wondering if you all had any conversation about also sharing that with the press or with the general public so that they can have a better picture of the responses that are made, but to your point, not with any sort of personally identifiable information.
Representative Luck, I think that would be natural that we would do abstracted information on that, but not the individual survivor's information. As far as sharing that survivor information, that would be with service providers like the Red Cross you know sheltering things where to get an SBA loan that type of stuff for for those federal partners but then again that would be subject to a data agreement that we we generally put together following a disaster so right now if I'm understanding the process the press could via core request get all of the personal identifiable information of these folks under this BILL WE WOULD REMOVE THAT OPPORTUNITY AND WE WOULD NOT ALLOW THEM ACCESS TO THE SAME KIND OF AGGREGATE DATA THAT VOLUNTEER ORGANIZATIONS WOULD BE ABLE TO RECEIVE NO MA WE WOULD STILL ALLOW THE PRESS ACCESS TO THE AGGREGATE DATA BUT JUST NOT volunteer organizations would be able to receive no ma we would still allow the press the access to the aggregate data but just not mary smith at x address xyz right so we have the
you know how many people where they were and that kind of stuff wonderful so if we ran an amendment on seconds that just clarified that it's that this data can be shared not only with local and state agencies volunteer organizations and federal partners but also with the press or people
GENERALLY THAT WOULD NOT BE THE DEPARTMENT WOULD NOT BE OPPOSED TO THAT NO AS LONG AS IT WAS AGGREGATED AND NOT PII WONDERFUL MY NEXT QUESTION HAS TO DO WITH THE
REPEAL OF INFORMATION RELATED TO THE EXPENDITURE OF FEDERAL FUNDS TO THE JOINT BUDGET COMMITTEE I SPOKE WITH A MEMBER OF THE JOINT BUDGET COMMITTEE WHO IS VERY CONCERNED ABOUT THIS PARTICULAR REPEAL AND SO I'M JUST WONDERING IF YOU CAN SPEAK INTO WHY WE'RE REPEALING THAT BECAUSE WE'RE REPORTING
and another one to them so so they're still getting the reports but it isn't a different part of statute okay and then this office of grants management being created I understand that it's trying to replace the office of preparedness but it seems to me that this is actually enlarging what that office would be able to cover because it's it's crossing out a lot of the things that are directly to preparedness and then creating an overarching section for preparedness and then adding in two additional sections one that even goes into administering federal public assistance grants which I suspect can be a broad class even beyond just preparedness and so could you speak into that yes ma'am the the federal prepared or public assistance grants are actually the FEMA grants for disaster recovery and we're doing about now we just did about 2.2 billion in those grants through that office this really was renaming it and then putting those preparedness functions in earlier in the bill it says the office of emergency management will do X Y & Z that came right from that office and then we moved it over to the office of emergency management for the preparedness side and then focused on grant management and the Office of Grant Management. And I will tell you that we have been thinking about do we actually need that office as we're shrinking, you know, we're actually shrinking the office, we're not expanding it. Thank you.
Representative Nguyen.
Thank you, Madam Chair. Mr. Klein, it's a pleasure to see you again. My question is very brief and I believe in government efficiencies and I just want to asked about this task force and its role of creating government efficiencies. Would you like to just explain a little bit more about that?
Director Klein.
Director Klein. Thank you, Madam Chair. Representative Lynn, I think the efficiencies are going to come in just the better coordination. So, for example, we may be able to use community development block grants to help offset local cost to a community that's doing some recovery project. If we're talking about that and we know that the players are coming together to talk about what they can bring to the table, then I think we can maximize the amount of money we can put towards recovery without having to go after new money. Those are the types of things that we're looking at there. And just the number of departments that get involved in a large-scale disaster, Everybody's got a hand in it. You know, when COVID's probably the largest one that we did, right? You know, we're dealing with corrections. We're dealing with, you know, the Energy Office. We're dealing with everybody on those types of disasters. Bringing representatives from all those departments together just makes sense. And we've been doing it informally. We've got the task force, but we'd like to make it formal and something that will continue into the future.
Representative Bottoms.
So if, thank you, Chair. So if I'm hearing this right, you're creating a new state task force, but you're downsizing some of the federal stuff.
Director Klein. Madam Chair, Representative Bottoms, we are not really creating a new one because we already have it. It's just not in statute. We've been doing it informally, but we'd like to make it formal and so it continues forward. As far as the staff and the federal programs that we're involved in, those have shrunk considerably. And then since January of last year, we haven't seen federal money for a lot of our grant programs, period. So that's kind of where we are. we actually did layoffs at the beginning or the end of last month because we've run out of work on the federal grant part.
Are there any further questions? Seeing none, thank you so much for your time and testimony, Director.
Thank you.
With that, the witness phase is now closed. Come on back up, Bill Sponsors.
I understand that you have two amendments. Representative Morrow. Yes. What you have before you is L1. I don't know if you want to move that first, but this corrects some typos and grammatical errors, updates statutory references, and expands the county association definition for the Homeland Security.
Okay. Vice Chair Clifford.
I move L1 to House Bill 1252.
Second.
Seconded by Representative Carter.
Is there anything else that you all want to add? If not, that's okay. Members, any questions about the amendment? Is there any objection to adopting the amendment? Seeing none, Amendment 1 is adopted.
Vice Chair Clifford. I move L2 to House Bill 1252.
Second.
Seconded by Representative Foray, and given that this one is a multi-page amendment,
I do want to acknowledge that this was circulated 24 hours in advance and did appear on your desks.
Representative Morrow. I got it.
Thank you, Madam Chair.
L2 moves the statutory location of the auxiliary emergency communicator team from CRS 24-33.5-705.5 to CRS 24-33.5-2502.5.
I hope you all caught every moment of that. I did. Members, do you have any questions about the amendment? No? Okay. Seeing none, is there any objection to amendment L2?
Representative Luck, do you have a question or an objection?
Or both?
Are you sure?
Okay. All right. Seeing no objection, amendment L2 is adopted. Any further amendments No ma Committee any amendments Seeing none the amendment phase is now closed Bill Rappup Representative Bradfield I'd like to take this opportunity to thank you all. If we can lessen the impact of emergencies by increasing our preparedness and coordination, that is a responsible action we should take. I ask you to support this bill and vote yes. Thank you.
Representative Morrow. Thank you, Madam Chair, and thank you, Committee, for your time today. Again, this is a relatively straightforward bill just to update Colorado's statutory framework for Homeland Security managing emergencies to better align with current operational needs. I think it's a good bill, and I ask for an aye vote. Thank you.
Thank you very much.
Vice Chair Clifford. Madam Chair, I move House Bill 1252 as amended to the Committee of the Whole with a favorable recommendation.
Second. Is that a full second?
Second.
Oh, wonderful.
Representative Wynn seconds.
Members, do you have any closing comments?
Representative Luck. Thank you, Madam Chair, and I thank you ladies for running this bill for the department. There are some questions I still have that I just want to vet based off of what was just shared in light of my conversations with the JVC member and whatever, I just want to clarify some of that. And I'd like to see us run, if possible, that amendment on seconds that we discussed. And so for today I'm going to be a no, but I do appreciate your trying to streamline and all of the things that this is attempting to do.
Any other comments?
Representative Bottoms. I am struggling a little bit with the public disclosure exemption. I understand why, and I totally get that why. But I'm still I think there's other reasons that that might be a bad idea. And so I'm I'm on the fence today. We'll see.
Can't wait to see how you vote. Thank you very much.
Vice Chair Clifford. Yeah, I certainly wasn't part of my closing. but given the comments, I will say I spent, I don't know, over 25 years so far with the American Red Cross managing disasters. And I have had a little bit of time with the Colorado Department of Homeland Security and emergency management here accidentally a few times. One of the things that is noteworthy about the agreements about information sharing is sometimes the agreements that also come out of those organizations that exist outside of the department. And, for instance, the Red Cross is a Geneva Convention organization, and most people don't relate to it that way. And they have very, very, very specific rules that they follow in how they can or cannot share information. And that is not something that is up for debate with them or that is voted on by a committee. It is actually part of the congressional charter that has them exist. So when you're getting into these agreements between, you know, larger what appear to be volunteer organizations that do this work in disasters as well as the federal government requirements, The director's job here is pretty tricky when it gets to what can and can't be shared and how it can and can't be shared. And again no matter what we write in law it doesn change those rules And it designed to make sure that people are protected in disasters and that what we not doing is turning disasters into political events etc That is not something that is related to today Those are long-standing events that have come far before us, and I recommend that we take heed of those warnings. It's the same in the state of Louisiana when they have a hurricane, for instance. We don't use those moments for anything other than making sure that people are safe. To that end, what I did want to do is just acknowledge the department. I am always impressed. I have been in the emergency operations centers, and I have engaged with a lot of different states, and I'm always proud to call Colorado's home just based on their professionalism, professionalism, how well they function inside of our state, and the good job that they do. Coloradans are unique. They don't like to be told what to do, and even if you build a shelter, they're not coming. They would rather sleep in their car someplace or work it out with friends and family, and you might, you know, work something out, but they're going to figure things out mostly on their own. That creates some complex challenges, especially when you're planning for something large scale, but our state does a really good job at it. And as somebody that's been a casual observer of the process the entire time that I've lived here, I've always been proud of their work. So I just want to say that on the record today, and I fully support this bill. Thank you very much.
I'm not seeing any other comments, so Ms. King, please poll the committee.
Representatives Bottoms?
No.
Bradley. No for today.
Carter. Aye.
Espinoza. Yes.
Furet. Yes.
Froelich. Yes.
Luck. No.
Quinn. Aye.
Valdez. Yes. Clifford. Yes.
Madam Chair. Yes. House Bill 1252 passes on a vote of 8 to 3. You're on your way to Committee of the Whole. Thank you both. All right. Our bill sponsors are here for the next bill. House Bill 1254.
Welcome, representatives Sukla and Brooks.
Welcome, who wants to start?
Representative Brooks. Thank you, Chair, and thank you to members of the vaunted State Affairs Committee. I have been here before, although I want to kind of point out that the previous times I've been here, I know that I was standing on plastic. You know, it's just to be able to roll up the body pretty easily and go ahead and get it out of the way because it is sometimes the function of the State Affairs Committee. However, today's bill is very much a function of the affairs of the state, so it is appropriately classified, I want to make sure that you all realize why this is coming. As a matter of fact, we'll be hearing another legislative audit bill or concerned bill, I believe, coming up next. I don't know if I'm up on the schedule or not, but I know that that will be in committee today. So let me kind of start off with a little bit of an overview. I know that many of you are already very familiar with ledge audit, what ledge audit does, the function, the composition. For those of you that are not please allow me just a brief minute to describe that Legislative audit is a unique committee You could really say that even more unique than than the composition of JBC because of its pure bicameral and bipartisan composition. Eight members, two Republicans from the House, two Democrats from the House, two Republicans from the Senate, two Democrats from the Senate. So it's an eight member committee, bipartisan, completely all the way. I sit on the legislative audit committee, as does one of our co-sponsors of the bill, AML Bacon. But then that might lead you directly to, well, you know, what is this all about here? Why is AML Bacon not sitting here? Why do I have my colleague, Representative Soukla, here? The bill started, I believe, in old state library during Smart Act hearings. When we're hearing agencies come up and kind of talk about their goals, their wildly important goals, there was a moment where the line of questioning ended up going towards a particular state agency about their record of audits and the fact that there were a number of them that had been failed or that were unattended to, that had been lingering, honestly, for months and months, if not years and years. my colleague stood up and said, hey, you're on this legislative audit committee. What gives with this? Is there something we can do? So we originated the discussion of the bill. We originated the bill language. We got the ball rolling on it. And then AML Bacon is a relatively new member to the legislative audit committee, not to speak for her, but I could tell through her line of questioning that she was going to be very engaged with that committee and had some of the same concerns that my co-prime and I did as far as audits not being addressed in a timely manner. The Office of the State Auditor is an independent, nonpartisan legislative branch agency with a mission to improve government and improve government efficiency for the people of Colorado. I am reading directly from the annual report, the status of audit recommendations not fully implemented as of June 2025. So what this report does is it goes through a number of, well, one by one, state agencies, and discusses their positions with audits. Keep in mind that when a state agency is found to be deficient in some areas, the auditor is going to recommend an action. Sometimes the agency disagrees with that action. As a matter of fact, we just had that on Tuesday. We said, no, because of this, we disagree. Other times they agree with the recommendation that's made by the Office of the State Auditor, and then they recommend a timeline of implementation for themselves. One of the examples that I saw on Tuesday at our most recent legislative audit is there was a very extended timeline for something as simple as changing how a form is completed or a form is updated. The implementation deadline was pushed out to August of 2027. Fine. That's accepted, right? What the genesis of this bill is the problem that sometimes these agreed-upon implementation dates of months, if not a year and a half down the road, are not being met. And from a government efficiency and accountability to the people of Colorado, That's a particular concern. I just want to give you a couple of facts, the key facts from the auditor of the Office of State Agencies report. For fiscal years 2020 through 2024, which is July 19 to June 24, the Office of the State Auditor made a total of 1,200 recommendations to auditees through financial and financial-related information technology audits, performance, and IT performance. audits. Here's the good news. Those that agreed to implement were at 98%. So the agency said, yes, we agree. These are good recommendations from the Office of the State Auditor. We will implement at a 98% rate. Overall, as of June 30, 2025, the audits have been implemented at a rate of 94%. Again, good return. Here's where things start to get a little bit and really why we're sitting here. Of the 69 unimplemented audit recommendations, the Office of the State Auditor has classified 14 of those, 20%, as high priority due to the seriousness of the problems identified and or because they have been unimplemented for three years or more. That's a significant lag time. There are, and I'll make some reference to it quickly, there are categories of deficiencies that the state auditor finds. There is a deficiency in internal controls that's kind of classified as what I'll call the white category. Literally in this book, they're in white or they're in orange. Deficiency in internal control, significant deficiency is now starting to get to that orange category. And then you have material weakness. A material weakness is the most serious level of internal control weakness, such that there is a reasonable possibility of a material misstatement to the entity's financial statements or material noncompliance with a federal program requirement that will not be prevented or detected, incorrected if it's not done in a timely manner. So those material weaknesses are, and I'm married to an auditor, are of significant concern. In this report, there are a couple of agencies, and I'm not here to go after any, please understand, this isn't about any particular agency. There are some of them that I know are on the lips of all of us in a bipartisan manner that have been more of a concern than others. Still, I'm not going to call out individual agencies by name because I just don't see the need to do so right now. But I will tell you that in one particular office, I'm looking here that there's a material weakness, orange category, blinking lights, that's six months delayed. Another material weakness that's six months delayed. A third material weakness that is 11 months delayed. A fourth material weakness that is 12 months delayed. a fifth material weakness that's actually 121 months delayed. There are significant deficiencies, again, the highest level, significant deficiencies that are 40 and 68 months delayed in implementation, and the implementation is the date that this agency said that they would complete the audits by. 68 and 40 months There a whole list I won bore you with the list but it goes from about here to here on my sheet of the white categories that range anywhere from 12 months delayed up to 23, 24 months delayed. And then yet one more orange category of a strong weakness that is 68 months delayed. That's one agency. Many agencies do just fine, and that's why we have that percentage. But again, 20% is a startling figure when you realize that the 20% that are not being implemented are of material weakness concern. That's an accountability issue that is failing the people, the taxpayers of the state of Colorado, and that's why I wanted to bring this bill. there's an amendment that will be offered that softens some of the language from a discretionary standpoint because we also understand the realities that we're in right now. This is probably a really good time to have this conversation because the bill recommends a 3% reduction in allocation, right, and funds. Wow, that could be very, very difficult depending on what the agency's budget is, the dollars that we're talking about. It could be very difficult in a tough budget. year as well. So we've softened language and we talked about up to 3% I want to make sure that the committee understands there are multiple opportunities for off ramps on this. First of all this is a recommendation coming from the legislative audit committee. There's there's a 68 months material weakness delay. It's going to go in front of the legislative audit committee bicameral bipartisan for a discussion and ultimately a recommendation. Legislative audit committee will probably take into consideration a number of things. You know, what is the history of the of the department? What is the severity of what's being discussed? You're going to be a number of things that are going to be discussed, right? At the end of the day, they might may vote to do nothing. This isn't prescriptive. There's a process here that begins a conversation, and it begins a conversation to try to get to the point to where we're ensuring that these state agencies are being held accountable. This bill was drafted with help from the Office of the State Auditor. I want you to know this isn't just in a vacuum. This is done with the help of the State Auditor. This was also brought to both sides of the aisle, members of the Joint Budget Committee. I engaged with both sides of the JPC. It does have, this is a bipartisan bill, and again, it's not meant to be overly prescriptive in nature. I'll stop there and see if my co-prime has any questions or statements before questions.
Representative Sucla.
Thank you, Madam Chair. So I think that my co-prime did a fantastic job. I can phrase it real simple. We've all had that friend. That friend that we asked, well, why don't you do this or why don't you do that? And they always – they just need a little push. You've got that one friend that just needs that little shove to get them to do what you know that they're capable of doing. That's what we're talking about here. We're talking about just that little nudge to get these agencies to comply. If you don't ever give that friend that nudge, they're just going to sit there and they're going to spin their worlds. And that all we asking right here is let just give these agencies just a little encouragement so we can get the audits done because it really not fair that all of our constituents have to perform an audit if they get audited by the IRS and they have deadlines and if they don meet those deadlines they fined Let's just hold our state at the same standard. We love all of our agencies, but they just need a little shove, and that's what this bill does. Representative Brooks is it okay for our Miss King to circulate your amendment? Yes, please. Thank you. Thank you very much. Go ahead Just one final thought before we see if the committee has any questions There's a language in the bill that speaks directly to good faith effort If there's a good faith effort being made historical context It'd be taken into consideration all of these things again. It's the beginning of a discussion It's not a prescriptive and a punitively, you know prescriptive manner it's just the beginning of a conversation because we understand there may have been some upheaval within the department, right? You might have had a department head that resigned or, you know, was terminated. There might have been any number of personnel issues that have played into this. All of this is going to be taken into consideration before the legislative audit committee and part of the discussion process with the Joint Budget Committee and also the office of the state controller.
All right, Vice Chair Clifford.
I have a few questions, Madam Chair, and either one of you can answer. So the first one is, how did you come about with the 3% number? That seems fine on the surface for some agencies, but when you get into HICPF, et cetera, that would be $170, $70 gazillion if they failed to make an audit recommendation. Can you tell me where that number came from? Representative Brooks. Chair, thank you for the question, Representative Clifford. You're absolutely right. And so during the original draft of the bill, the 3%, that's why we wanted to soften the language through the amendment to say up to and that it shall not exceed that because there needs to be consideration given exactly in your explanation or your example for the healthcare policy financing. you know, 3% of that budget is mighty. But for some other ones, actually looking through a list, some of it was $66,000 a year. So it, again, kind of goes back to this being the beginning of the conversation, and then that can be the recommendation coming from the legislative audit committee that goes through the Joint Budget Committee and also the Office of the State Controller because we need to modulate that percentage based on the factors of budget. Vice Chair Clifford, I know you've got at least two questions, so feel free to dialogue. Let's just dialogue. I think that might be faster. Sorry, I just put a piece of ice in my mouth, and that seemed like inappropriate timing. I'm just getting through this in its greatest form, and I know you and I spoke very briefly this morning. So doesn't the JBC already have some mechanisms to deal with just this thing? Isn't that one of their jobs with us? Fair question Representative Clifford Absolutely They can make that final recommendation on budget However the Joint Budget Committee in all of their greatness there are certain processes on this side of the interface with the agencies direct interface with the agencies and particularly with the Office of the State Auditor that they not involved with So all this does is allow us to be part of that conversation as a legislative audit committee to make sure that the Joint Budget Committee and the Office of State Controller are informed about some of the perhaps material weaknesses that are occurring within the departments. And then ultimately, you know, you're right. It's the between Joint Budget Committee and Office of State Controller to decide, you know, is this something we want to look at? And to be perfectly frank, you know, joint budget committee would have the ability to say they're withholding in one year and then make it up in the next year, just kind of depending on the situation. So you're right, but this piece of information by engaging the legislative audit committee, I think is what's missing currently from their ability to be very effective in that. I'm still dialoguing with, and you wanted to answer too, Rep. Sucla.
Yes, Representative Clifford.
I would say that if you look at the audit that Representative Brooks has right here, and you can see all the – there's a lot of orange in there. So we're not taking care of it right now. We're trying to take care of it. There's a reason why there's a lot of orange. I think the Joint Budget Committee has got their hands full, and this might be secondary. That's why we still have all the Orange. We have some agencies that haven't complied for five or six years. Yeah, I'll comment before I answer my next question. I do have some serious concerns about that. I do have concerns about how the executive branch, irrespective of the executive department, does sometimes have interesting ways of interpreting what we give them in law. A bill that I ran created one of our newest state agencies, and I remember sitting down with their staff shortly after they created it saying, you know, we thought of your agency at dinner one night. like, I'm not finished kind of thing, when they were telling me specifically what they were doing. And I was fascinated with, you know, we'd just put the words on paper like the year before. You'd gotten hired, you came, and then you had a completely different view of what we were doing. Like, still here. Hello. We know what we created. So I have that experience, but I also have the experience in some of these agencies where they're directed by their executives that they're going to do certain things. And I think that if I were to grab that report that you've been mentioning several times, that those are the types of things that I would find on consistent, consistent, consistent failures to meet the audit. They're not held to account for that. I'm concerned in this particular instance, based on the nature of the bill, where the ledge audit committee is going to fit into that process that we currently have a bit. And I think that the thought or the get the arms around the executive and making sure they're doing what they're saying they're going to do or what the state auditor has recommended, or I guess a better way to say that would be they have also acknowledged that they are going to do something about it because these are deadlines and dates that they have agreed to and they do have a formal way to say, no, we disagree with the auditor on this, here is why. and that should be part of the record. This is stuff that we're talking about that they've acknowledged and they have agreed to a deadline on. Where I'm concerned a little bit about the legislative process, and there may be a fix for it, and that's why I'm trying to talk through it, is the Joint Budget Committee is a year-round committee. They are something that is, you know, statutorily authorized. as they can engage in supplementals, they can engage in budget changes throughout the year, even while we're out of session. They don't have to have a special session to do those types of things, et cetera. They do have more enforcement mechanisms that are built into their function already than this will allow. And I'm kind of wondering, yeah, I do have a question. I'm wondering why we don't have more of a direction between either the state auditor's office and JBC or even the Ledge Audit Committee and the JBC in this instance, rather than creating kind of a carte blanche up to this is the way we're going to deal with your budget type thing. I'm a little nervous about the mechanism here that doesn't have the backstop of the JBC because they are much more intimately familiar with the ins and outs of all of these budgets and how it relates to all other things than we are. by nature. Can you explain why we went about it this direction? Thank you, Madam Chair. Representative Clifford, this idea actually came from Representative Brooks. It was done this way on purpose and the reason that we set it up this way is we never wanted to have a hostile environment between our state auditor and the agency. We was trying to find a go-between to where all the middle ground where the bullets were taken, and that would have been the state representatives versus having that direct relationship, and then we had this hostile environment between the state auditor and the agency. And maybe I believe that Representative Brooks could add to that. Yes, that's right. Dialogue. Thank you. Fair. The legislative audit committee also is an interim committee. We meet throughout the course of the calendar. As a matter of fact, we just approved our interim calendar this last Tuesday. The joint budget committee is still very much involved in this process, and it's actually this amendment is almost directly from the joint budget committee. Conversations that I had on both sides of the aisle with members of the joint budget committee to ensure that this was a recommendation along the chain. And I think that they see my interpretation of the feedback that I've received from the Joint Budget Committee is that they see that this can be a good mechanism in order to be able to assist them in what they're doing and ensuring that there is that tie. We haven't made it before, but this does present the opportunity to be able to tie together those holes that have been open in the past and ensure that the Joint Budget Committee is making their recommendations and their budget decisions based on the best available information. There is, I'm sorry, there is, the General Assembly can rescind this. The committee can rescind it. that in the bill summary, there are also, there are off ramps in this to see, to see if legislative audit committee had made a rogue recommendation. There are opportunities in order to address that. I, even though I find that to be very unlikely. Yeah, I, but, but legislatively and, and, you know, something you just said brought up another question and I'm actually going to go there instead of where I was going a moment ago. So that also something else that I now have a concern about is what is the lifting mechanism So this would require another vote of the legislative audit committee or we would have to have a full General Assembly vote in order to give that money back. And let me put an asterisk right here. It has not been that many years in all of our lifetime when this General Assembly was much more divided. In other words, there was not a supermajority or a majority in a large scale, if you will. And we have to legislate for something that might have a more balanced effect, say like what we're dealing with with the federal government right now where they literally can't give the money back to an agency once an action has been had. So this has got some automatic stops that kind of kick in. I know that you've got some good faith language in here, but I am concerned in a different scenario here where we may leave an agency in limbo based on something that's fairly automatic here that would either require the legislative audit committee to be aligned with giving an agency their money back or an action of the entire General Assembly. So there's going to have to be something else added here that is once they do become compliant X, Y, or Z happens because, you know, right now this would require additional legislative action in order to deal with that budget, which is part of the reason I was thinking about JVC. But have you considered, like, how does an agency, once they become compliant with the audit, fix it, and how quickly does that occur? those are those are conversations that as far as returning the money to an agency with the joint budget committee they hadn't expressed a concern to me about that piece they were more upfront about the piece that you see expressed in the amendment and keep in mind that irrespective of balance that could it could change the composition of the joint budget committee it statutorily does not change at all the composition of the legislative audit committee, which is always a 4-4 bicameral. And so there's a little bit, I guess, of a safety mechanism from any sort of, I guess, political winds of change there. My experience with the legislative audit committee is, you know, I'll pull up just shy of saying they are as deliberative as judiciary, but it is a very thoughtful and a very deliberative body that I know is not going to make rash decisions and are going to take into consideration budget, good faith efforts, historical context of that particular agency, because some are just in front of the audit committee more than others. And an audit can be brought as part of just a regular annual audit by part of the Office of State Auditor or can be brought at the request of a representative. And we deal with those quite a bit. As a matter of fact, one was we just decided not to move forward on an audit request of a huge agency that I know has a lot of concern for people on both sides of the aisle because of some current issues that are going on with them and being able to rectify a legal issue. And the audit would have just been ill-timed and very onerous on the agency. so the senator that made that request actually withdrew uh because the office of the state auditor said this wouldn be a good way forward yeah representative i this is not a i i trust the work of the ledge audit Committee That is not at all what I am referring to here And I do recognize that just like the Joint Budget Committee you guys get 200 packets as well and there real work that you doing there There's not a conversation about that. It is – when you cross over into the specific financial pieces and there's any sort of bypass of that process that isn't looking at the finances of the whole or what other ancillary effects there are, it does give me at least some questions about how it's going to work. And then when you've got to put the money back in, how do you put that money back in just on an LAC vote? We don't have anything that's currently in your legislation, not that an additional amendment couldn't be forthcoming, that might give you the ability that triggers that if they become compliant that this committee must meet with the next time, et cetera, et cetera, et cetera. but in its current form and in the amendment I'm looking at right now, I'm left with Pandora's out of the box. How do you put it back in? And then what are the other steps that have to be taken before the state treasurer can actually reopen that checkbook? There are a lot of places between there, and that is something that is specific to the Joint Budget Committee. They have that authority to do it. I don't have that interface in this bill, and I'm interested in, like, how you plan to – I got how you're getting your enforcement piece. You definitely have the switch, but how do you end the spanking? In the same way, Representative Clifford, that this amendment came from the Joint Budget Committee, I appreciate you asking that line of discussion because I realized I failed to mention earlier that I appreciate good policy. And if that's a question, a concern, something that gives the committee, not just you, pause, then I'm absolutely up for addressing that through an amendment to ensure that we're closing the uncertainty about how that process would look. And that's something that I'd work with the JVC on. Thank you. Just for the sake of time, I'll kind of stop here. These are new questions. I was not engaged with this line of thinking until you started speaking. And I'm probably going to have some more for you as this thing continues to go now, just in the way that the policy is getting put together and making sure that we don't break anything. And I know others want to ask questions, too. So thank you for indulging me with all that time.
Representative Bradley.
Thank you, Madam Chair. For a minute, I thought it was just the Clifford show. No, I'm just kidding. I have a question because I am a health care provider, and I am not trying to pick on HickPuff, but I am going to. We've had one of the highest disenrollment rates in the country since 2023. So people are literally getting kicked off of Medicaid, people that need Medicaid. They had eight recommendations not implemented, four of those classified as high priority or material weakness, issued between 2017 and 2021. At one point, they had 17 audit recommendations outstanding since 2013. There's got to be a checks and balances. This, so if you don't know, can affect federal money. We get federal Medicaid funds is about $11 billion. It's 58% of HICPAF's budget. The state general fund is another 30% with about $5.5 billion. Provider fees to other funds is about $1 billion. So when I look at this we are about to have to pay the federal government back million in total funds identified as repayment because of fraud in our state So when these audits aren implemented and there's some from the JBC who have asked the state auditor to implement or to audit some of these things that haven't been implemented into HICPATH, they've actually begged for them to do an audit. What happens when we don't implement a third of our budget in this state is from HICPATH? What's going to happen if we don't start holding them accountable? Because this has been going on
since 2013 and probably before that. Representative Brooks. Madam Chair, thank you. Thank you, Representative Bradley, you're absolutely right. In the same vein that an up to 3% budget reduction out of HICPF's budget would be very difficult at the same time because we're dealing with huge numbers. the numbers that we have in HICPAF are very startling because of the insensitive because of where that money goes and how that money is allocated to individuals in need so sometimes it's a financial, sometimes it's a structural audit that is being unattended to and I'm looking at variances between 13 and 43 months and not implementing some of these audits. You know, the Office of the State Auditor, I've kept intentionally out of this, out of kind of the decision-making process, out of the enforcement, you know, that piece, because I believe that it's very important for them to remain neutral. So we're not feeding any sort of antagonistic relationship between OSA and the agencies themselves. But I think it's very telling in the statement that you just made where you have the Office of the State Auditor begging the joint Budget Committee to try to get a hold of something. I think that speaks directly to what this bill is trying to do because there is no mechanism right now for the OSA, the Office of the State Auditor, to be able to hold some of these agencies accountable. And I know that that's very concerning to them and a source of frustration because they're doing some dance-off. I'll finish the rest of my comments through interpretive dance, if that's okay. No, I wouldn't. So, no, thank you.
Go ahead, Representative Bradley. Thank you, Madam Chair. This is the second year that we're in a budget shortfall, and $9.4 million from one specific area is concerning to me. And this is taxpayer money, taxpayer funds. And so when I see the IDD community and the DD community waiting on wait lists for decades and we have some frivolous spending and we can control that through a bill that will keep these departments accountable, would that not help our communities and the people that really need this funding? Like provider rates, 1.6% being cut this year, right? And then I see something where there's $9.4 million that we're going to have to pay back because we're not auditing because these audits aren't getting implemented and the taxpayers are paying the price for this.
Representative Brooks. Chair, thank you. Thank you, Representative Bradley. No, you're absolutely right. The numbers, the figures can become staggering, especially when some of the financial audits, when they're just – it's not necessarily looking at the allocations. It's not the office of the state officer isn't necessarily looking into into or poking their fingers into how that money is allocated. But yet, if at the end of the year, their financial audits are not squared up. And sometimes an example that I heard recently, we're talking about millions and tens of millions of dollars on billion dollar budget that now are not accounted for. And that's money that is very much needed in situations like we're in right now to where this mechanism just simply helps kind of stand in that gap to ensure that there's an answer and the financial mechanisms are being tightened up and addressed in a timely manner so then that way the benefits can get out to Coloradans the way they deserve.
Representative Luck?
Thank you, Madam Chair, and thank you, gentlemen, for this bill. I think it's very important to figure out this particular piece because we are the ones who are responsible for the dollars. We are the ones who direct the agencies to do the different work we want, and we want to be able to ensure that those dollars and that work is being done and done in the way that we all contemplate. It can get very frustrating, and I'm sure you all have experienced this in my remarks at the well, when you learn that there is a law that has been passed to direct an agency to do something, and then you find out they're not doing that. And so then the question becomes, what is our role if there is no actual implementation of that work or if those dollars are not being properly held? We are the fiduciary of the state with respect to these dollars, and so how do we best ensure that they are handled properly? And so I'm on board with you. I also am tracking with the representative from Arapahoe County with the things that he has brought forward. And so I'm just wondering if you all have any appetite for continuing to tweak this. And one of the sort of ideas that I would propose with respect to the return, the rescinding of the recommendation, I'm wondering if in addition to having a bill being able to be or the audit committee making a vote, and possibly for any reason, they might be able, something might shift and they might find, okay, we want to rescind what we had already said, even if the compliance hasn't started. but then have a third category wherein the state auditor automatically, once that audit is complied with, they automatically direct the comptroller to return those funds so that, to the representative from Arapaho's point, it doesn't become political. There doesn't – you don't have ever a situation where the agency is now in compliance, but because you need at least one vote from both parties, right, you'd need four from one and one from another, that there's never a situation where the process is hijacked for political purposes. And so I'm just wondering if you would be open to that kind of a tweak and that kind of an amendment.
Representative Sucla.
Thank you, Rep. Save Luck. yes we're open to ideas to get this bill across the finish line our state auditor is working their butts off to try to do the fair thing for all of our agencies but they're not getting compliance on some of these audits and we just we got to give our friend just a little nudge so that we can get across the finish line get these audits completed and we open to AMENDMENTS IF THAT WHAT IT WOULD TAKE TO GET IT ACROSS THE FINISH LINE REPRESENTATIVE LUCK THANK YOU MADAM CHAIR AND THANK YOU FOR THAT ANSWER I HOPEFUL THAT THAT IS GOING TO BE THE SAME ANSWER TO THE And amendments if that what it would take to get it across the finish line Representative Luck Thank you Madam Chair and thank you for that answer I hopeful that that is going to be the same answer to this other potential amendment wherein perhaps we can introduce the JBC before the final recommendation is issued that somehow they have a stake in that or a vote in that
I know I serve on the Committee of Legal Services and we approve the OLS budget, but then that goes to the Executive Committee for additional layers of approval. We are the first step. And so perhaps there could be some sort of consultation between the two committees before that final recommendation is made. So as to be able to address, I think, the valid concerns that the representative from Arapaho has raised.
Representative Brooks. Madam Chair, thank you. Thank you, Representative Luck. And as I said before, I think the intent of this bill is clear, all right, just to try to stand in that gap and try to ensure that the good work that the very large office of the state auditor is doing is not going for naught. And if there is the ability to be able to improve this bill in a way that moves us towards that goal, that is a little bit different than what you see in front of you, then absolutely. I mean, that's the intent. I will point out that any worry that we might have about the lag process in the Joint Budget Committee, that the Legislative Audit Committee can just direct through the Office of the State Auditor the Office of the State Controller to release funds back. So it's a little bit faster than I think what we might be worried about, However, if that section is still not, it's on page three, if that how we get the money back via the state controller is not adequate and not as expedient as what this committee desires to see, then that's absolutely an opportunity to amend. And I'd be happy to do so. All right.
I'm not seeing any other questions. I have a couple.
Representative Brooks we serve on the audit committee together and I'm I'm curious why you didn't bring this bill as an idea that would come out of the legislative audit committee. Hi, Madam Chair. Thank you. It's a good question. I had I had thought about that. I know that there were a couple of bills that were already moving through that process that one's already hit the House floor. I know that there's another one that will be heard today. And so that process I didn't want to encumber with the current bills that are moving through the system. But then also I think that this just makes more sense, and maybe it's just the way I'm looking at it. Perhaps I'm wrong, but I think it makes more sense coming through this way instead of through the Legislative Audit Committee, which you know from our time serving there is very review-oriented. It's very discussion-oriented. It's geared more towards asking questions of agencies. And it kind of goes back to my earlier point that I want to ensure that the Office of the State Auditor doesn't look like they are initiating any sort of activity that could be seen as antagonistic or hostile towards an agency. So I thought it might be a little bit better coming from just from the floor, so to speak. Okay. And has the state auditor office taken a position on the bill Madam Chair excuse me while I kind of tread around this question very carefully because the Office of the State Auditor again I want to be very careful not to put them into a position that might put them at odds with their ability to do what we need them to do in an audit capacity with the agencies, state agencies. However, I will say, and I think it's I think it's fair to say without betraying any sort of confidence that they were absolutely very much involved with the drafting of this bill. Language, I went to them and talked with the Office of the State Auditor to ensure that we're looking at this the right way. And so they were involved. However, the idea came from myself and from my co-prime, and then we consulted with the Office of the State Auditor. I would not want to actually ask them to take a position on it just because, again, they're kind of Switzerland's need. Okay.
And then my last question, does the Legislative Audit Committee currently need any sort of legislative authority to send the Joint Budget Committee a letter asking them to do what you've outlined in this bill?
Representative Brooks. Madam Chair, and again, we're kind of working more through the Office of the State Controller on this. The Joint Budget Committee was very involved with the language of the amendment to ensure that, again, it's more of an opportunity to start a conversation with the agencies and not necessarily go straight to a punitive action. And so it goes through the Office of the State Controller, goes through the legislative audit committee to the office of the state auditor and then directing the office of the state controller to take those actions. The Joint Budget Committee was just ensuring that some language in this amendment was brought into the bill, which we accept, kind of made them more comfortable with the process. And let me ask you this. Does the Joint Budget Committee not already have the authority to reassess department budgets? Representative Brooks.
Madam Chair, thank you. Absolutely. No, they do. However, I believe that's where we have a very good committee, the bipartisan, bicameral committee of the Legislative Audit Committee that can help the Joint Budget Committee in their efforts because there still is going to be that interface.
They don't have, even when it comes to the SMART Act hearings, you know, they're running from one to the other. They come, they make recommendations, they give their standpoint, and then they're up and they're out. And this allows the Joint Budget Committee to use a very balanced tool to be able to help them to be able to see a whole different level of involvement from the legislative audit. You know how many questions are asked in those meetings and how thorough the Office of the State Auditor goes about their work. So having a little bit more information, I believe, for the Joint Budget Committee and the Office of the State Controller is very, very helpful for them to be able to decide you know where where where are the areas that really we need to when you try to make sure that we budgeting correctly for Colorado from a government efficiency standpoint so just a quick I guess correction and then we move into witness testimony When the Joint Budget Committee comes before each committee of reference during the Smart Act hearings they're presenting the governor's budget. They're not actually presenting our budget. So just clarification for the future.
Let's go ahead and move into witness testimony. We have one person signed up. I'll call Mr. Bruce. EISENHOWER AND THEN IF THERE'S ANYBODY ELSE HERE IN PERSON THAT WOULD LIKE TO PROVIDE TESTIMONY, PLEASE COME FORWARD AT THIS TIME. MR. EISENHOWER, WELCOME. THE FLOOR IS YOURS FOR THREE MINUTES.
THANK YOU, MADAM CHAIR, MEMBERS OF THE COMMITTEE. I'm Bruce Eisenhower, and the legislative liaison with the Department of Local Affairs. I'd like to thank the sponsors for bringing this bill forward today. However, I am here to testify in opposition of this bill. The Department of Local Affairs takes audit findings very seriously. We see this as a partnership with the Office of State Auditor and how to improve our accountability to not only you as legislators, but to the citizens of Colorado. I'VE BEEN WITH THE DEPARTMENT FOR NEARLY 20 YEARS, AND I THINK DURING THAT PERIOD OF TIME, WE'VE NEVER REJECTED AN AUDIT FINDING, HAVE ALWAYS EMBRACED THOSE, TAKEN THEM VERY SERIOUSLY, DEVELOPED A PLAN OF ACTION FOR RECOMMENDATIONS AND IMPLEMENTATION. SOMETIMES THESE FINDINGS MAY INVOLVE CAPITAL NEEDS IN OUR DEPARTMENT, OF WHICH WE HAVE TO SUBMIT A DECISION ITEM, GOING THROUGH THE BUDGET PROCESS, OF WHICH IT TAKES TIME. There may be other layers of improvements or steps that can be accomplished as well. But sometimes just trying to determine is this good faith effort, is that good enough? When we look at what we could have done, should have done, based upon what we've done, it's a rather kind of nebulous term, good faith effort. How do we prove that it was good enough? THE BILL ESTABLISHES VERY SUBJECTIVE PROCESS TO WHAT IS A VERY DEFINED AREA OF RECOMMENDATION. THE AUDIT FINDINGS ARE VERY PRESCRIPTIVE, VERY PRECISE IN WHAT THEY'VE IDENTIFIED. AND THIS IS VERY SUBJECTIVE IN NATURE. ALSO, WHEN WE GET TO KIND OF THE PUNITIVE PHASE OF THAT, FROM OUR PERSPECTIVE, WHAT'S REALLY HAPPENING IS PUNITIVE TO THE CITIZENS OF THE STATE. And what I mean by that is the funding we get goes largely for programs, whether it's emergency rental assistance, housing vouchers, infrastructure and road projects, those sorts of things that the citizens benefit directly from. So withholding 3% or up to 3% is really just withholding it from the citizens. Again, we look at, in the past audit findings that we've had, as a partnership of what we can do to improve the accountability with our department, take the necessary actions, and improve our overall efficiency. I see I'm running out of time and be happy to answer any questions you may have. Thank you very much, members.
Any questions? Got a couple. I love this. Let's go ahead, Representative Luck.
Thank you, Madam Chair. and thank you for coming to testify. I appreciate it. The problem that I've had has been laid out for us is a problem wherein we have a responsibility to make sure, as I said to the bill sponsors, that the budget that we approve, that we are fiduciaries over, as well as the laws that are passed here by majority vote, that those things are being faithfully handled and executed by state agencies. And we were directed to the fact that by and large state agencies are doing that. Over 90% of the time, they are satisfying those things. But in a small subset of instances where very important issues are at stake, they're not. And so if this is not a proper mechanism by which to provide us a new tool to allow for compliance, to ensure that all of these things are being handled appropriately, what would be the right tool to use?
I'm so sorry. Mr. Eisenhower.
Thank you, Madam Chair, Representative Luck. I'm not sure it's appropriate for me to describe what the right tool might be, but I can only speak to my experience. And again, with nearly 20 years with the department, I think that a lot of the processes already exist. LEGISLATIVE AUDIT MEMBERS, COMMITTEE AUDIT MEMBERS, THEY CAN SEND THE JOINT BUDGET COMMITTEE INFORMATION IF THEY FEEL A DEPARTMENT HASN'T BEEN COMPLIENT IN CERTAIN ASPECTS. THE JOINT BUDGET COMMITTEE CAN REQUEST THE RFR'S, THE REQUEST FOR INFORMATION, WHERE THEY REALLY DO A DEEP DIVE INTO A PARTICULAR PROGRAM AND LOOK AT THAT. SO I THINK A LOT OF THAT PROCESS CURRENTLY EXISTS. IT MAY NOT BE FORMALIZED IN THE FORM OF A BILL, BUT PROCESSES DO EXIST IN MY OPINION.
REPRESENTATIVE LUCK.
THANK YOU, MADAM CHAIR. AND WITH RESPECT TO THE JBC PIECE, I'M NOT AS FAMILIAR. WHAT ARE THE ENFORCEMENT MECHANISMS APART FROM REMOVING FUNDS THROUGH THE LONG BILL PROCESS THAT THE JBC HAS OPENED TO THEM?
MR. EISENHOWER.
THANK YOU, MADAM CHAIR. REPRESENTATIVE LUCK. I think in and of itself, the ability to remove funding is very powerful to a department, and that's what the JBC can do is they put forth a budget each and every year for the legislature to vote on.
Representative Bradley. Thank you, Madam Chair, and thank you, Mr. Eisenhower, for your service of 20 years. It seems unfair for you to testify because I'm looking at the EDOLA 2019-2025, 18 audit recommendations total zero currently unimplemented previous year 15 to not fully earlier years 19 recommendations zero outstanding 2011 2016 30 recommendations zero outstanding so i guess my question for you serving 20 years on the department how would you feel if your department was responsible for nine million dollars having to be paid back by the federal government or to be paid back to the federal government and 50% of your audits not implemented? Would you not think that there's a problem? I mean, looking at what your department's doing versus what other departments are doing that are costing us money at the state level when we're already in a fiscal crisis of 850 million, some people say more, how would that make you feel to be on that department? I think if it was enforceable, we'd be enforcing it. And I think that puts the JBC in a really tough bind. So that's a lot of questions. Answer as you will.
Mr Eisenhower Thank you Madam Chair Representative Bradley Excuse me I appreciate that we are a golden department in trying to be high achievers Again, I think it's a lot from our standpoint, and I can only speak on our behalf, of where, like I said before, we view this as a partnership. We believe in accountability, and we want to be successful in what we do. I'm not authorized nor do I have the information on other agencies of where they stand, why or why not, have they complied or not complied. I don't know the specifics. But, again, I think that through budgeting process, the legislature has a lot of control and ability to make and effectuate changes.
Representative Bradley. Thank you. And I don't mean to put you on the spot. But don't you think that if it was – if departments were unimplementing high-priority suggestions for a decade, that hitting them financially might make them implement a little bit better and enforce it a little bit better? It's like the buddy, like Rep Sucla was talking about. So you're the golden standard, but there are others kind of dragging their feet, which are costing our state millions of dollars. So as far as you're concerned, if let's say DOLA was having to pay federal funds back $9 million, do you think that a bill like this that would hit them in their department wallet would be helpful to get them moving a little bit faster?
Mr. Eisenhower. Madam Chair, Representative Bradley, again, thank you for that question. It's very difficult to answer and not knowing the specifics as to what's behind the reasons for maybe noncompliance of those departments. From our perspective, I don't think we would try to ever be in that sort of situation where we have to pay back federal funds. We want it to go for its intended use so the citizens of the state benefit from the programs we implement.
All right, Representative Wynn. Thank you, Madam Chair. Mr. Eisenhower, thank you so much for your service for the state. I previously was a state employee as well. Most of the law folks know that I served in the governor's office, and of course in DOR. And so my question is, in your experience in your 20 years, has there been a case of a bad faith noncompliance? Because as Representative Bradley has mentioned, You've mentioned the, you know, she's mentioned many years of good service that DOLA has done. But the question is about bad faith on noncompliant agencies.
Mr. Eisenhower. Thank you, Madam Chair and Representative. Again, I cannot speak for other agencies but only ours. And I can honestly say we've never in bad faith have tried not to implement a recommendation or ignore a recommendation. but again rely on that partnership of how we can strive to be a better agency.
Okay. Any further questions for this witness? Seeing none, thank you so much for your time and your testimony. The witness phase is now closed. Come on back up, Bill Sponsors. I understand you all have an amendment. It's already been circulated. Vice Chair Clifford can you move the amendment Thank you Madam Chair I move L to House Bill 1254 Seconded by Representative Furet Go ahead and tell us about the amendment. Representative Brooks. Madam Chair, thank you. I know we had discussed this a little bit during the presentation, but the amendment really is language that is coming from not only Joint Budget Committee, but from joint budget committee member opposite of my aisle, if that makes any difference whatsoever. It shouldn't, I guess, because of the kind of the nature of the joint budget committee. But I bring that up only to illustrate that I wanted to make sure that I was working with members of the joint budget committee on each side to see if they were looking at this differently than each other. And really, they were on the same page. I know that the individual and joint budget committee from which this language originated, I had discussed it also with other members of the JBC in the House. And so this softens what I believe was kind of written originally as more of a prescriptive nature into what's more of, again, what I refer to as the beginning of a conversation, that it is a recommendation to up along the lines and soften some of the prescriptive 3% nature to more of an up to 3% so that way it gives some flexibility to the alleged audit and Office of the State Controller to consider the magnitude of the various state budgets because we know that they sit on opposite ends often when we look at the overall budget numbers that these state agencies deal with. Are there any questions on Amendment L1? Representative Bottoms. So two questions. So this is making it less punitive. Representative Brooks. Thank you, Madam Chair. Representative Bottoms, correct. It's less punitive and more of that conversational nature and still provides the off-ramps that we have to where it's not once the conversation starts, it doesn't mean that it's going to end in any sort of action. It may just be a conversation that the Legislative Audit Committee is having, and that's the end of it. Second question. This is to Representative Sucla. Can you name some of those people in your life that you have problems with? Representative Sucla, you don't have to answer that. You could say representative bottoms if you'd like. You want me to tell a story? Oh, goodness. All right. Any other questions? Okay. Any objections to amendment L1? Seeing none, amendment L1 is adopted. Bill wrap-up. Oh, wait, real fast. Any other amendments? Okay. Seeing none, the amendment phase is now closed. Now we can do a bill wrap-up. Representative Soukla. Thank you, Madam Chair. So there's that saying that you're only as strong as your weakest player. We've got a gold standard agency right out here, but we have a state agency that has an audit recommendation that hasn't been fulfilled in almost seven years. We've got a problem. We need these strong agencies to backfill those weaker agencies and give them a little support and then we be a strong team when we lift up the weakest players to the gold standard like DOLA Thank you Representative Brooks Madam Chair, thank you. I think that in the presentation, the original presentation of the bill, I was able to really kind of get at quite a bit of the intent and explain kind of the process, the legislative audit. So I don't know that a protracted closing statement here is necessary nor beneficial. However, I would like to just ensure, to reiterate, I do have some proposed bill language that the member was kind enough to share to me to help try to close some of that gap to ensure that the reinstatement is done in a way that's expedient. and I would be happy to run this and would encourage continued discussion. I believe that we've come in or been able to demonstrate that we've come in with an opportunity or with an attitude that we will work with anybody that, even the state agencies, right, that want to see the language amended. Happy to do that. At the same time, I want to make sure that we are doing the right thing for taxpayers. We're doing the right thing for the Office of the State Auditor that's working very, very hard and looking sometimes like they just don't, I mean, they just throw their hands up in the air at some of these audits that have been unanswered for months and years that, quite frankly, in some cases, represent a very grave threat to our processes, to our state agencies, and to what we do here at the state. I mean, some of it really and truly is scary without getting into the details. And I would like to thank the Department of Local Affairs. They are awesome. I had a great conversation with them earlier. Your research was spot on. They've done a fantastic job. If they all acted in that same manner and were responsive in that same manner, we would not be sitting here. It's just simply not the case. So I ask for an aye vote and to continue the conversation. All right. Is there a motion? Vice Chair Clifford. Madam Chair, I move House Bill 1254 as amended to the Committee on Appropriations. No, I'm sorry, to the Committee of the Whole with a favorable recommendation. Seconded by Representative Locke. Members, any closing comments? Representative Wynn.
Thank you, Madam Chair. I come from the state employee background, and I think that you understand that I've talked to many of the liaisons. I appreciate the sponsors bringing this up. I understand that there is government inefficiency and that an audit is to make sure that we're making the compliance. But after hearing testimony from the Department of Local Affairs, I just don't see enough evidence that we need to create more potential unintended consequences with our state agencies. So I'll be a note today.
Representative Froelich. Thank you. Thank you for bringing the bill. I think we all can agree that the auditor, the whole purpose of the auditor is to identify these problems. I just think if we use the analogy of the friend, first of all, this is the neighbor telling the friend what to do instead of the friend's parents, I guess, in this analogy. And you're taking away their allowance and their car keys. SO I DON'T LIKE THE PROPOSAL OF WHAT TO DO WITH NONCOMPLIANT STATE AGENCIES, BUT I SHARE The frustration that they go so long, some agencies on some recommendations take too long to comply, but I will be respectful no.
Representative Luck. Thank you, Madam Chair. So if I understand the process correctly, the way that it lays out right now, the state auditor comes in and does an audit, and they make recommendations. They make those recommendations, and if there is an issue, if they find an issue. And with those recommendations, they then work with the department to determine an implementation date. The department says, hey, we can fix that problem you've identified by eight months from now. And then that date meets, comes, and they haven't fulfilled that recommendation. And under this bill, what would then happen is the audit committee would meet with that department and say, hey, what gives? Why didn't you meet this by eight months? And if the agency comes back and says, you know what, force majeure, war broke out, we weren't able to do it, or whatever, right, that it is determined by this bipartisan balance committee that it was a good faith effort, then a new implementation date will be set. But if it's determined that, hey, they haven't done it for seven years because, frankly, they haven't prioritized something that the legislature has directed them to prioritize, and they're not acting in good faith and they're stonewalling it, which I have heard from members of the JBC happens and are not giving us information and are saying, hey, come and enforce this against us, then the audit committee has a new tool to use that can help to restore the balance of power under the separation of powers. And the way that I, if I'm understanding this correctly, especially with the amendment that you just put on, the tool that you are proposing is like a rubber mallet. It's a small little hammer that says we're seeing what you're doing and we are going to probably slowly increase, right? You're not going to likely start at 3%. You probably will start at a much lower amount. We will just incentivize you to maybe do what we have told you to do as a legislative branch, as the people's branch, and direct unelected bureaucrats who have otherwise no real accountability apart from that which we direct to do what we've asked them to do. If we leave the system the way I see it, as it currently is, the only option we as a legislature have is a sledgehammer because the only other option is for the JBC to strip funding for a whole budget cycle. whereas under this mechanism and the amendment that was proposed to you as a potential future amendment we would be able to remove some funds for us for a limited amount of funds for a limited amount of time until that compliance is satisfied and then those funds could be returned to them within a limited amount of time but if the jbc enters in and says you know what we're going to strip your budget we're going to strip your budget for the year and because of the way we do accrual budgeting here that may actually impact on future years budgets as well and to me that seems much more forceful and much less likely to ever be implemented because of the long-range consequences of that which means we really don't have an enforcement mechanism available to us and so while I do think and in line with what the representative from Arapahoe County pointed out that there are places where this could be tweaked to to better refine some of these concerns and address them I will be supportive of this today with the commitment that both of you have made that you would be willing to make those tweaks on seconds Thank you for bringing the bill Representative Bradley Thank you Madam Chair and thank you to the good representative whose birthday it is today from Penrose for explaining that. I don't understand how we're going to continue down a same path of unimplemented goals, suggestions we've been doing it for 13 years in the department that i listed we have the highest medicaid disenrollment rate in the country these are people that are elderly poor disabled and pregnant women and their children and when we keep 30 drop in enrollment and so when we now have to repay $9 million to the federal government because we, we payments for deceased Medicaid enrollees. That was 7.3 million, 3.8 million from federal share, um, Medicaid overpayment reporting errors, improper supplemental Medicaid payments. It goes on and on. These are the people in our districts that don't get the services that we as a state were set out to budget for. And we have received the emails because they can't survive. The IDD community is having their sledgehammer, not a rubber mallet. We are sledgehammering this community. And they are not getting the services they deserve because we won't hold the departments accountable for not implementing the things that the auditor has described that they need to do. And so then the taxpayers that we are supposed to represent in all of our districts end up paying a huge price. Congrats, Dola. Way to be the gold standard. Why can't all the departments do that? Why can't they? They are at the helm of what the taxpayers are asking them to do. If you own a business and you're out of compliance, you don't own the business anymore. The business gets closed. Why are we not holding the same standard to the departments and to the people that put us here? I'm it's infuriating to me people are getting things cut left and right we were brought up here to do a job we're 850 million dollars again in a shortfall last year was a billion here we are again and we have the the chance with this bill to hold some people accountable to the taxpayers that brought us here I will be an enthusiastic yes thank you any other closing comments Vice Chair Clifford. On the surface, when I took a look at the idea of this bill, I think I agree with you completely. I do have some concerns about how our agencies are not implementing their recommended audits, and I do think there needs to be an enforcement mechanism to ensure that the executives, whomever they may be, of whatever departments, know that the General Assembly can come and get them if they fail to comply with the audits that we've asked for or audits that have been done routinely. I think that that's something we should fix. in the course of this testimony. Specifically, I now have more questions about how to do this and how to get there, and I don't have ideas to give you on how to fix it other than to sit down with both the Joint Budget Committee, probably either the Ledge Council staff or the Executive Committee, and the Audit Department and come up with some mechanisms that you have to both implement taking a budget away and giving it back et cetera et cetera et cetera I think there going to have to be some careful considerations in there that are just wholly missing from the bill for me And I don't know that you can fix that between now and seconds. And I'm certainly, certainly not going to vote yes on seconds or thirds with this in its current manner. So right now I am going to move to a no on your bill. I don't want you to stop working on this, however. I would like for you to put this together as a bigger picture item and bring this into the next administration with something that have all the mechanisms worked out. And if you do that, I will support it. And I appreciate you coming, but I just am scared technically some of the things you're doing here won't work. Thanks. All right. I'm not seeing any other hands. I WANT TO ECHO WHAT SOME OF MY COLLEAGUES HAVE SAID IN THAT I APPRECIATE YOU BRINGING THIS BILL AND PUTTING A SOLUTION ON THE TABLE FOR US ALL TO CONSIDER. I CERTAINLY HAVE HAD MY OWN EXPERIENCE OF SITTING AT THE LEGISLATIVE AUDIT COMMITTEE MEETINGS THAT ARE VERY, VERY, VERY EARLY. and feeling frustrated with a handful of departments, their lack of self-awareness and documentation and lack of follow-through in implementing all of their recommendations. That said, I also want to acknowledge that the Legislative Audit Committee does regularly have conversations with departments. We get status updates on how departments are doing, implementing their recommendations before their implementation deadlines happen. We talk to departments after we've heard their audit, and we just, we regularly get updates. Having an audit coming before us with recommendations is not a one-time conversation. It's not a one-way conversation. it's a two-way conversation that we are regularly having and so I feel a little frustrated in that there is a sense that the legislative audit committee is not doing our job because we are we are doing our job and our job in my mind is to shine a light on the issues that we're seeing in departments to get the information to better understand WHAT IS BROKEN SO THAT WE CAN FIX IT. I DON'T KNOW THAT IT IS EXCLUSIVELY THE JOB OF THE LEGISLATIVE AUDIT COMMITTEE TO BE THE ONLY COMMITTEE THAT IS HOLDING DEPARTMENTS ACCOUNTABLE. I THINK THAT IS ACTUALLY THE JOB OF THE JOINT BUDGET COMMITTEE, BUT FRANKLY, OUR JOB AS WELL AS A GENERAL ASSEMBLY. AND I'M NOT CONVINCED THAT PUNITIVE ACTION WILL LEAD TO COMPLIANCE. We've heard from many departments that frankly what they need is more money to be able to implement system management programs, all new technology that talks to each other, you know, in other departments so that they're better able to do their jobs. And I don't necessarily agree that every department that may be out of compliance is doing so or is malicious in being out of compliance. I think that there are a lot of factors that impact whether or not they able to attain the goals that are in front of them And I just I don believe that being punitive is going to move them forward Our job is to help them reach the goals that we've outlined for them by a state legislature. And so I am interested in having additional conversation about what additional accountability measures could look like. And I hope that that's something perhaps that the Legislative Audit Committee could have a conversation about during the summer months when our calendars are a little bit lighter to really come up with some more creative solutions, but in a way that balances and honors the experience of the state auditor's office as well as the experience and knowledge of our legislative audit committee members. And so I challenge you to do that this summer, Representative Brooks, and do appreciate the thought and the work that you put into building this policy. I'm just not convinced that this is the right solution for where we are right now, so I will be a no vote. With that, Ms. King, please poll the committee. Representatives Bottoms. Yes. Bradley. Yes. Carter. Respectfully, no. Espinoza. No. Bray. No. Krolik. No. Luck. Yes. Wynn. Respectfully, no. Valdez. No. Clifford. No. Madam Chair. No. House Bill. 1254 fails on a vote of 8 to 3. Vice Chair Clifford? I see the plastic on the floor. Vice Chair Clifford? Madam Chair, I move to postpone indefinitely House Bill 1254 with a reverse roll call vote. Second. Seconded by Representative Furet. Is there any objection? Seeing none, House Bill 1254 is postponed indefinitely using a reverse roll call vote. Thank you so much. Explain the plastic on the floor. Okay, we're going to do a quick switch and we'll be right back. Thank you. The committees will stand in a brief recess. Thank you. Thank you. The committee will come back to order at that time for the recording. Welcome. Please present your bill. Representative Wilford. Thank you very much, Mr. Chair. Members, I have a bill that came directly out of the Legislative Audit Committee. This bill would amend statute to state that when an entity discloses information to the state auditor during the course of a fraud investigation this disclosure by itself does not wave and otherwise valid claim of privilege confidentiality or other protection held by the entity making the disclosure including a claim of attorney client privilege and I just want to spend a brief moment explaining why this bill is necessary so a state agency may request that that the Office of the State Auditor conducts or participates in a fraud investigation. Just one second. Online, somehow, our committee didn't come back to order. Thank you. Thank you Thank you. Thank you. One more time, third time is the charm. The committee will come back to order. Maybe. Aha! And we are back. So as much as I dislike having to say, Representative Wilford, if you will please begin from the beginning on Senate Bill 84. Thank you very much, Mr. Chair. Thank you, members, for your patience. Second time, I hope, will be the charm. So House Bill, I'm sorry, not House Bill, Senate Bill 84 came directly out of the legislative audit committee. This bill would amend statute to state that when an entity discloses information to the state auditor during the course of a fraud investigation, this disclosure by itself does not waive an otherwise valid claim of privilege, confidentiality, or other protection held by the entity making the disclosure, including a claim of attorney-client privilege. Let me take a moment and talk about why the bill is necessary. A state agency may request that the office of the state auditor conduct or participate in a fraud investigation resulting from allegations received by the OSA through its fraud hotline. According to statute when this occurs the state auditor has access to all of the information maintained by the agency that is directly related to the scope of the investigation Statute also states that any information that the OSA receives during the course of a fraud investigation must be kept confidential by the OSA. However, there is a risk that state agencies may not be willing to provide information to the OSA that would be necessary for the investigation that would fall under attorney, client, OR SOME OTHER TYPE OF PRIVILEGE OUT OF A CONCERN THAT PROVIDING THE INFORMATION WOULD BE CONSIDERED A WAIVER OF THAT PRIVILEGE. THIS BILL MAKES CLEAR THAT PROVIDING THIS TYPE OF INFORMATION WOULD NOT BY ITSELF CONSTITUTE A WAIVER OF THAT PRIVILEGE. I DO WANT TO ACKNOWLEDGE THAT WE HAVE INDIVIDUALS FROM THE OFFICE OF THE STATE AUDITOR HERE FOR QUESTIONS ONLY. IF YOU HAVE ANY SPECIFIC QUESTIONS THAT YOU WOULD LIKE TO ASK THEM. Members, are there any questions for the sponsor? Representative Espinosa.
Thank you. I have a question you may not be able to answer, but my lawyer brain is going to the other way, which is, has this been vetted by the Attorney General because I'm not sure that us putting it into statute necessarily protects an individual's attorney-client privilege?
Representative Wilford. Thank you very much, Mr. Chair. I would love to bring up during the witness testimony phase staff from the state auditor's office that's been working on this policy to answer that specific question for you. Are there any other questions for the sponsor? Seeing none, thank you. We will now go to witnesses. I have one witness signed up, and it sounds like we're going to have another. Let's bring up Mr. Christopher Gregory. And then just for the sake of time, if any other witnesses for this bill would like to come forward, you may take a seat. Mr. Gregory, you may begin. Thank you, Mr. Chair. Your microphone, if you don't mind. Thank you, Mr. Chair. Good afternoon, committee members.
I'm Christopher Gregory, and I'm testifying in my individual capacity in opposition to Senate Bill 2684. I testify today with the background of having personally investigated and sought accountability for the ongoing Colorado judicial scandal in my roles as a member, vice chair, chair, and executive director of the Colorado Commission on Judicial Discipline. I regard the historic public censure of former Chief Justice Nathan B. Coats and the passage of Amendment H by a 73% majority of voters in 2024 as my greatest accomplishments as an attorney and as a public servant. From experience, I'm familiar with the unethical tactics that are being used by Governor Jared Polis, Attorney General Phil Weiser, the Justices of the Colorado Supreme Court, and other public officials to conceal a more than 25-year pattern of public resources being misused to conceal serious judicial attorney and official misconduct. Senate bill 2684 legitimizes the worst of these unethical tactics by allowing those investigated for public fraud to hide behind arbitrary claims of governmental privilege and confidentiality in order to conceal material evidence. This same unethical tactic was used to undermine the office of the state auditor or the OSA prior findings of occupational fraud and accompanying referrals to law enforcement Through their control over the OSA 2019 Fraud Hotline investigation of the State Court Administrator Office the Justices and Attorney General Weiser were able to delay reporting to law enforcement, to apply redactions to the OSA's February 4, 2022 Fraud Hotline report, and then to withhold the full report from the public and other regulatory authorities. The concealment of material information in turn caused the statute of limitations to expire with no accountability for the wrongdoing verified by the OSA. SB 2684 silences whistleblowers and victims by allowing wrongdoers to control whether evidence of public fraud is ever disclosed to law enforcement or to the public. The solution, however, is simple. I ask that this committee vote down Senate Bill 2684 and instead introduce the draft resolution, draft joint resolution, which I have submitted to refer to the ongoing, which I have submitted to refer the ongoing Colorado judicial scandal to conflict-free federal law enforcement and for the appointment of another state's attorney general to impartially represent the interests of the state of Colorado.
Thank you. I understand you're here for questions only. Is that correct? So this is Ms. Shiroff. Am I saying that correctly? Please state your name for the record, anyone that you represent, and I know that Representative Espinoza had a question.
Yeah, thank you. Vice Chair Kate Shiroff, I'm a manager with the State Auditor's Office and the head of the Fraud Hotline.
Okay. Would you like to also be recognized for questions? If you'll just state your name and anyone that you represent for the record, and then we'll go into the questions.
Thank you, Mr. Chair. So I'm also with the Office of the State Auditor. I'm the Director of Communications, Jenny Page.
Thank you very much, Ms. Page. Committee, are there questions for this panel of witnesses? Representative Espinoza.
Thank you, Mr. Vice Chair. So my question you heard to the sponsor of the bill, but what is the level of working with the attorney generals with regard to especially whether the statute can override the obligations and professional responsibility with regard to confidentiality of attorney-client privilege information?
Ms. Shiroff.
Thank you, Mr. Chair and Representative Espinoza. We've been in contact with the Attorney General's Office. They're not taking a position against this bill. They are saying that depending on the circumstances, they may not disclose information during an investigation. This might not help them get over that kind of bar for confidentiality in maintaining attorney-client privilege, but it could help us in some situations. And so we think that this bill could only help us in the future if this situation comes up.
Members, Representative Locke.
Thank you, Mr. Chair. I have one question for you, ma'am, and then I have some questions for Mr. Gregory. So can I just ask my first question? I didn't catch your name. I'm sorry.
Ms. Shiroff.
Shiroff. Thank you. Shearoff, thank you. Yes. Thank you. So I'm not really understanding the process by which this all takes place. So if I can guess and speculate here for a second, does it work such that The state auditor's office asks an agency for information in order to do its work. The agency says this is privileged and that leaves the state auditor not really knowing what to do with that and so then if this bill passes then you can ask that information, be given that information and it still be deemed like somehow you're brought into the relationship such that it's still privileged and you can't then disclose it to us but then it goes towards your recommendations or your review of a matter? Is that how this is contemplated to work?
Ms. Shiroff. Thank you. Representative Luck, so this is solely for the fraud hotline. So if we get a report of occupational fraud to the fraud hotline, statute requires us to refer that complaint to the agency involved and ask if they want to investigate it or if they want our help investigating it, if they determine that they want our help in investigating it, and honestly, it doesn't happen very often. Mostly, agencies want to investigate their own reports of occupational fraud and give us the report at the end of their investigation. But if they do ask for our help in that investigation, then we participate in the investigation. And so in this case, if not having this availability has, will, would impede or delay an investigation and has in the past, that is as much information as I can share with you because the investigations are fully confidential. And so, and we can't even release the results of the investigation to the public under statute. And so it's just to help us proceed with investigation.
Representative Locke. Thank you, Mr. Chair, and thank you for that answer. That's very helpful. Mr. Gregory, can you help me? You are pointing to things that have been hidden. You're pointing to your own experience with this whole system. Can you just give a deeper dive into what you're concerned about?
Mr. Gregory. Thank you. And thank you, Representative Locke. I think the simplest way to identify this issue is just to give the specific example. And I don't know how many members of this committee are familiar with the Colorado judicial scandal that happened a number of years ago. It's still happening, in my opinion. But what had happened with the fraud hotline in particular was that as this $2.66, $2.75 million sole source contract, which I don't think you can categorize as anything other than a bribe, was approved by the Colorado Supreme Court, as that was happening and the entire Colorado Supreme Court approved this thing, there was a fraud complaint made to the fraud hotline. and the justices went ahead and approved this contract anyway. Well, what came out after two years was that the Attorney General's office, the justices, other attorneys, they had concealed a material fact or a big part of the evidence, which was there was a memo that was generated by the chief of staff who was the subject of this whole thing, Manny Macias. and through that memo she was negotiating this contract, but that memo described instances in which she was instructed to cover up misconduct destroy evidence And that critical information was withheld from the state auditor as part of not only the fraud hotline but the state auditor has to do a single statewide audit every year. It's an ongoing, continuous thing. It's a condition of receiving federal funding. and both the court and the AG's office knew that this evidence was material to that single statewide audit as well as the fraud hotline but concealed it and didn't provide it to the state auditor or to me in my role at that time which was chair of the Colorado Commission on Judicial Discipline, the regulatory authority above judges. And that particular act is in many ways federal crimes. There's big problems with that. But what ended up happening through how the state audit fraud hotline process played out was that the justices, they got to control that investigation. And it's, I think, a fundamental problem with fraud hotline is that the agencies and the individuals that may be subject to the investigation get to control the investigation itself. And through that control, there were all these arguments that everything was privileged or confidential. And it harkens back to executive privilege and things that kind of came up in the Nixon administration, oddly enough. But through these assertions of these things, the other regulators, we didn't get access to these records. Law enforcement wasn't provided access to records that were indicative of fraud. And the state auditor's ability to communicate with law enforcement was effectively postponed. And it was postponed long enough that by the time there was finally a referral to law enforcement to charge the people involved with probably a number of felonies, including facts that came with findings of occupational fraud. the state auditor because I think it was the justices and the AG's office had redacted portions of the state auditor's report. By the time it went to the district attorney's office, they didn't have enough time to file charges and the statute of limitations expired. It is almost a classic example of obstruction of justice. And my concern with this bill is not that it says these things aren't waived. We already have that in the False Claims Act, which says that people can come forward with confidential information. There's a process for it. But if the defendant later on wants to assert that privilege, they can. What this bill is doing is it's legitimizing these bogus claims of attorney-client privilege between government and their attorneys. and also just this amorphous confidentiality that would relate to deliberative process or that sort of thing. That's the real ill of this bill.
Members, we are out of time for questions for this panel, but I know that there were other hands up. I want to be gracious about that considering is there anybody else that needs to get something in here? I will entertain it. Yes.
Thank you, Mr. Chair. I was actually able to use this time to look at the statute that we're looking at, and I'm confused as to why this is necessary in that the auditor's general statute already says that documents and information in the auditor control are not public and shall not be released They maintain the confidentiality that they have when they received by the auditor And I believe even in the subsection with regard to the hotline, it says all work papers prepared or maintained by the state auditor must be held strictly confidential by the state auditor and not for public release. So I'm curious as to why this is even necessary. As I read the statute, it seems as if it is already protected under the statutory language that we have on the books. Ms. Page. Thank you, Mr. Vice Chair. So right now there's still ambiguity regarding client-attorney privilege, and there have been some questions that have come up in the past during fraud investigations regarding the extent to which agencies feel like they're waiving privilege because they're giving us information. And so this audit committee bill is merely to clarify that just because an agency provides us information doesn't mean that they are automatically waiving their privilege.
Just to check, do we have any members that have another committee that we have to get to? You do? Okay, my apology. Okay. We are out of time for questions for this panel of witnesses. I have called for all witnesses at this point. Is there anyone else in the room that's wishing to testify on this bill? The witness testimony phase is closed. Sponsors, amendments. I don't have any amendments. Committee, any amendments? Seeing none, the amendments phase is closed. Sponsor wrap-up. I'll start by moving the bill, Mr. Chair. I move Senate Bill 084 to Committee of the Whole with a favorable recommendation. Second.
Seconded by Rep. Carter.
Please explain or please wrap-up. Yep. So I absolutely appreciate the conversation that just happened here between the witness and the office of the state auditor. And I will say that I would not as a member of the legislative audit committee bring forward a bill like this if it wasn't absolutely necessary to ensure that the state auditor has and her office and her employees for that matter have the statutory clarity that they need in order to move forward with necessary audits. So I do ask for your yes vote. And if there are any questions that members do have before we move on to second reading, I'm happy to make sure that we get those questions answered for you. Thank you. Members, brief comments. Representative Bottoms.
Thank you, Chair. I would like to have some discussion a little bit about the resolution that Mr. Gregory was talking about. I just read down through it. It seems pretty solid and not picking on the audit committee. I have nothing against them, but I kind of am leaning the way Representative Espinosa said this. it doesn't appear this is a major thing forward but I do believe if we've got this kind of corruption and and and I believe I seen some of that when when my first year here when the Chief Justice got up and explained how they had investigated themselves and found themselves to be innocent that always concerns me And so obviously that was different circumstances So, yeah, I'd like to have some of the bigger conversation a little bit about that, the resolution.
Representative Froehlich. Thank you, Mr. Chair. Thank you, Chair Wolford. As I mentioned to you, I just have general heartburn about the judicial department and lack of transparency, so I'll be a respectful no.
Representative Bradley. Thank you, Mr. Chair. I, too, get a little heartburn when we have somebody who went through this process and feels like this bill will silence whistleblowers and victims by allowing wrongdoers to control whether evidence of public fraud is ever disclosed to law enforcement or to the public. I feel like we just had a bill just a minute ago that was trying to bring forward some ways to prevent fraud in our state. I, too, have read over the resolution and would like to have more conversations about that and appreciate him coming to testify.
Representative Espinoza. And I just want to put on the record, I'm sorry that I didn't have this conversation in advance because I didn't pull the whole statute in terms of this issue. And I wish we had had the attorney general's office here. and if they're not weighing in, I just as an attorney have some concerns over whether this is an appropriate action for us to take. So I will be a respectful no today.
Are there any further comments from the committee? Seeing none, Ms. King, please poll the committee.
Representatives Bottoms.
No.
Bradley. No.
Carter. Yes.
Espinosa. No.
Bray. Yes.
Rolick. No.
Buck? No.
Wynn? Yes.
Valdez? Yes.
Wilford? Yes. Mr. Chair? Yes. That bill passes six to five. You're on the way to the Committee of the Whole. Thank you. Thank you. We will not go into recess just for sake of time. We do have other committees that are waiting on our business, so we will bring up Representative Carter and Luck for House Bill 1297. And you may begin. Representative Carter.
Thank you, Mr. Chair. Pleased to present House Bill 1297 alongside my colleague, Rep Luck. Bill, this is another bill from the Statutory Revisions Committee, and it's just a technical update regarding the terms misdemeanor traffic offense and traffic offense currently both terms appear in statute and used interchangeably which can create unnecessary inconsistencies this bill simply standardized the language of the term misdemeanor traffic offense is the uniform term throughout the statutes 1297 is a technical housekeeping measure just intended to streamline statutory language and improve clarity in the code by creating consistent terminology the bill helps reduce interpretive friction for courts, legal practitioners, and individuals. I'm respectfully asking for your support on 1297.
Members, any questions? Okay, seeing none. I'm sorry, Representative Locker. Do you have a question for yourself? Did you want to speak? I'm sorry. All right. I didn't hear any questions. Sorry, I'm a little flustered at the moment. We'll move into witness testimony. Okay. There's no witness testimony. If there's anybody in the room that would like to provide witness testimony, please come forward at this time. Seeing none, the testimony phase is now closed. Amendments? No amendments. Okay. Committee, any amendments? Seeing none, the committee or the testimony... The amendment phase is now closed. Bill wrap up.
Representative Locke. Thank you, Madam Chair, and thank you, committee, for hearing another statutory revisions bill. I just did want to put on the record that while it is the statutory revisions committee's task to actually shorten the books, not elongate them, the reason for using misdemeanor traffic offense over the shorter traffic misdemeanor is simply because there are more references in statute to the longer term and to keep our bills shorter, I guess. It was just decided that it was easier to fix the sections that are less than those that are greater. I seem to be flustered myself, so we ask for an aye vote.
All right. Rec routing to the Committee of the Whole. Would you like to move your bill? Thank you, Madam Chair.
We move House Bill 1297 to the Committee of the Whole with a favorable recommendation. Second.
Seconded by Representative Carter. Any closing comments?
All right, seeing none. Ms. King, please poll the committee.
Representatives Bottoms.
Yes. Bradley.
Yes. Carter.
Yes. Espinosa.
Yes. Gray.
Yes. Froelich.
Yes. Luck.
Yes. Wynn.
Respectfully no Valdez No Clifford Yes Yes Madam Chair Yes All right
House Bill 1297 passes on a vote of 9 to 2. All right. Last bill. I see you. House Bill 1303. Who wants to start? I see you. I see you. I know, right? Representative Bradley.
Thank you, Madam Chair. And because DNR did this lovely, gosh, I'm all over the place today too, handoff for us. I'm going to read because she put it together. Current statute sets forth requirements for certification of welders engaged in oil and gas operations. Senate Bill 19-181 specifically required passage of the International Code Council Exam F-31, National standard journeyman, mechanical, or an analogous successor exam for any person working on a pressurized process lines in upstream and midstream operations. During ECMC's recent statutory alignment rulemaking, the commission learned that the F31 exam is not applicable to welders in the oil and gas industry, and rather is the test applicable to mechanical journeyman contractors. Amendment to the statutory provision is necessary to ensure that EC MC's rules are consistent with statute and to accomplish the legislators presumed intent to require welders working on flow lines to pass a test actually applicable to their specialized work.
Representative Carter, do you want to add anything?
Yes. Go ahead. Prior to 2023 the Colorado Oil and Gas Commission the COGCC regulated oil and gas development primarily in 2023 and 2024 legislative session through the passage of SB 23285 and HB 241346 The assembly amended the COGCC Act to change the name of the commission to the Energy and Carbon Management Commission and to expand the scope of the commission's regulatory authority. Overall, the bill fits within the statutory revision committee's charge to modify or eliminate antiquated or redundant or contrary rules of law. I'm asking for an aye vote.
Members, any questions? Okay. Seeing none, we'll move into witness testimony. We have two people signed up remotely. We will call them both at the same time. We have Commissioner Jeff Robbins, or maybe you're the executive director. No, Commissioner Jeff Robbins and then Ben Bordeaux for questions only. If there's anybody else in the room that wishes to provide testimony, please come forward at this time. Welcome, Mr. Robbins, Commissioner Robbins. Thank you very much, Madam Chair, for the opportunity to testify today.
I don't have a lot to further for what the sponsors said. These are two technical revisions. We did determine that the F-31 exam was the inapplicable exam during the recent rulemaking in which we were implementing the pipeline certification rules. What the ECMC did was we actually created a rule that references the two correct exams, and those are part of the statutory amendments today. I would note that rule is not effective until July 1 of 2026 which gave us the opportunity to come before you to try to get the statute amended With regard to the ECMC and oil and gas operations language the sponsor did a good job There was a certain section in which oil and gas operations was not updated to reflect the commission's expanded regulatory authority over energy and carbon management operations, and this amendment would make that change. I'm happy to take any questions. Thank you very much,
commissioners, and I do understand that Mr. Bordeaux is here for questions only. What questions do you have, committee? Okay. I'm not seeing any. Thank you all so much for your time. The witness phase is now closed. Do you all have any amendments? No. All right. Committee, any amendments? Okay. The amendment phase is now closed. Bill, wrap up. Much needed bill. Vote yes. All right. Representative Carter, do you want to move the bill?
I move HB 26-1303 to the Committee of the Whole with a favorable recommendation. Second.
All right, seconded by Representative Bradley.
Any closing comments? All right, seeing none, Ms. Keen, please poll the committee.
Representative Bottoms.
Yes. Bradley.
Yes. Carter.
Yes. Espinoza.
Yes. Fray.
Yes. Froelich.
Yes. Locke.
Yes. Wynn.
Respectfully, no. Valdez?
Yes. I'm sorry, Representative Valdez, what was that? Yes. Clifford?
Yes. Madam Chair? Yes. House Bill 1303 passes on a vote of 10 to 1. With that, the State Affairs Committee will stand in adjournment. We also, actually before we stand in adjournment, we'll be in the old State Library again tomorrow or on Monday for, because it's got more air. All right. The committee is now adjourned.