Steven Moortel
Legislative Research Analyst
(602) 926-5987
Arizona House of Representatives
House Majority Research
MEMORANDUM
1700 W. Washington
Phoenix, AZ 85007-2848
FAX (602) 417-3137
TO: JOINT LEGISLATIVE AUDIT COMMITTEE
Senator Blendu, Chairman
Representative Knaperek, Vice Chairman
CC: Representative Konopnicki, Senator Waring
DATE: December 19,2005
SUBJECT: Sunset Review ofthe Prescott Historical Society of Arizona
Attached is the final report of the sunset review of the Prescott Historical Society of
Arizona, which was conducted by the Senate Government and House of Representatives
Government Reform & Government Finance Accountability Committee of Reference.
This report has been distributed to the following individuals and agencies:
Governor of the State of Arizona
The Honorable Janet Napolitano
President of the Senate
Senator Ken Bennett
Senate Members
Senator Jim Waring, Vice Chairman
Senator Bill Brotherton
Senator Jake Flake
Senator Linda Gray
Senator Harry E. Mitchell
Speaker of the House of Representatives
Representative Jim Weiers
House Members
Representative Bill Konopnicki, Chairman
Representative Ted Downing
Representative Phil Lopes
Representative John McComish
Representative John Nelson
Prescott Historical Society of Arizona
Arizona State Library, Archives & Public Records
Office of the Auditor General
Senate Majority Staff
Senate Research Staff
Senate Minority Staff
Senate Resource Center
Attachment
House Majority Staff
House Research Staff
House Minority Staff
Chief Clerk
Senate Government and House of Representatives Government Reform & Finance
Accountability Committee of Reference
Committee of Reference Report
Prescott Historical Society of Arizona
Background
The Pursuant to Arizona Revised Statutes section (A.R.S. § 41-2953), the Joint
Legislative Audit Committee (JLAC) assigned the sunset review of the Arizona State Personnel
Board (Board) to the Senate Government and House of Representatives Government Reform &
Government Finance Accountability Committee of Reference for review.
Prescott Historical Society of Arizona was created in Laws 1964, Ch. 50 §1 for the
purpose of preserving, maintaining and perpetuating the gubernatorial mansion, the Sharlot Hall
Museum and the historical collections contained in the mansion and museum and on the grounds
of the mansion and museum in Prescott, Arizona. Additionally, the Society procures by gift,
exchange or purchase; books, maps, papers, goods, artifacts, utensils, museum specimens and
other data or materials pertaining to the history of Arizona and the west, amongst other statutory
duties. The Society receives legislative appropriation as well as funding from additional private
sources such as donation and fees.
Committee ofReference Sunset Review Procedures
The Committee of Reference held one public meeting on November 1, 2005 to review the
Society's response to the 12 sunset factors, as well as four additional questions, as required by
A.R.S. § 41-2954, subsections D and F, and to accept public testimony. The Committee of
Reference received testimony from Richard Simms, Director of the Prescott Historical Society of
Arizona.
Committee ofReference Recommendations
The Committee of Reference recommended that the Prescott Historical Society of
Arizona be continued for ten years.
Attachments
1. Agency Response
2. Meeting Notice
3. Minutes of the Committee of Reference Meeting
2
415 WEST GURLEY STREET • PRESCOTI, ARIZONA 86301 • 520/445-3122. FAX 520/776-9053
September 22, 2005
Representative Bill Konopnicki
House of Representatives
State ofArizona
House Wing, Capitol Building
Phoenix, Arizona 85007
RE: Sunset Review Process, Prescott Historical Society (Sharlot Hall Museum)
Dear Mr. Konopnicki:
This document contains the responses requested by you as. Chair ofthe Committee of
Reference, as that committee begins the work ofreviewing this state agency, the Prescott
Historical Society, better known to the public as the Sharlot Hall Museum, founded by
former Territorial Historian and author Sharlot M. Hall in 1928. The Museum became a
state agency in 1965. The Board and Staffof the Sharlot Hall Museum/Prescott
Historical appreciate this opportunity to present a full profile ofthis award-winning
institution.
Below is the detailed response to the 12 decision factors and the 4 additional responses
requested in your letter ofJuly 15,2005:
Twelve Decision Factors
1. The objective andpurpose in establishing the agency. The Prescott Historical
Society ofArizona was established in 1965 pursuant to Arizona Revised Statute
41-831. The objective was to create stable annual funding for a 40-year-old
institution that "preserves, maintains and perpetuates" (a) the 1864 Territorial
Governor's Mansion, (b) the Shar10t Hall Museum campus ofwhich the
Governor's Mansion is one of several historic buildings, and (c) the historical
artifact and archival collections of the museum agency's mission area, the Central
Highlands ofArizona. The purpose in establishing the museum agency was to
assure that avast area ofthe State ofArizona not served by other state museums
receives museum services. The Central Highlands reaches from Interstate 40 in
the north, to northern Maricopa County in the South, to the White Mountains in
the east, and to the Colorado River in the West.
2. The effectiveness with which the agency has met its objective andpurpose and the
efficiency with which it has operated. The Prescott Historical Society/Sharlot
Hall Museum has been highly effective in applying both state allocations and
revenues generated by its nonprofit organizational partner, the Sharlot Hall
Historical Society to the preservation and perpetuation ofhistory and heritage in
the Central Arizona Highlands. In recognition ofits work, this museum agency in
2003 was reaccredited by the American Association ofMuseums for its
"professional operations and adherence to current and evolving standards and best
practices, commitment to continued institutional improvement, and public service
and accountability"; in 2004 it received the Distinguished Organization Award
from the Arizona Humanities Council; and in 2005 the Executive Director,
Richard Sims, received the Distinguished Service Award from the Museum
Association ofArizona Such recognition and status has accrued to this museum
agency because it is seen as a model for other museums in the extent and quality
ofits service to the Prescott community, to Yavapai County, to the broader
mission area, and to the thousands ofin-state, national and international visitors.
To mention some projects over the past ten years, the SharlotHall Museum has
(a) installed an exhibit at Northern Arizona University on the 1868 Navajo Treaty
that allowed the Navajo people to return home from forced exile, using the
original document from the National Archives, an exhibit viewed with much
emotion by thousands ofNavajo, (b) helped Lake Havasu City open its first
museum, through consultation, assistance with fundraising, and exhibit
installation, (c) published the definitive biography ofa major Arizona public
figure, Ernest W. McFarland, Senator, Governor, and Chief Justice o'f Arizona,
(d) and closer to home, worked with the communities ofAsh Forle, Peeples
Valley, Jerome, Sedon~ and Clarkdale on their museum and heritage endeavors.
.The efficiency with which this state agency and its nonprofit support organization
have operated can be measured by the sheer volume ofpublic programs and
services offered by a reduced staffof 13 state employees (18 before the budget
cuts of 2002-2003) and 6 nonprofit employees. lbis highly productive staffhas
not only "made do" with the loss ofessential co-workers, buthas rededicated
itselfby offering additional services, such as the Lifelong Learning Institute, the
Prescott Book Festival and the Arizona Heritage Project, which works with high
school students around the state, in partnership with the Library of Congress.
This would not be possible without the vital and valuable assistance ofover 100
volunteers, and without the needed entrepreneurial revenues generated by the
nonprofit organization.
3. The extent to which the agency has operated in the public interest. Ifwe may
define "public interest" as public trust, public accountability, and public
availability, the Prescott Historical Society/Sharlot Hall Museum has maximized
its capacity to operate in such a manner. The museum agency occupies a city
block campus ofgalleries and gardens in downtown Prescott. The ungated
grounds are available to casual strollers and picknickers at all times. The formal
hours for museum visitors to the many exhibit buildings are· 10-5, MondaySaturday,
and 12-4 on Sundays. The Museum is closed for only three holidays,
Thanksgiving, Christmas, and New Years. During all other state holidays, the
museum remains open. In addition, the facilities are available on a scheduled
basis in the evenings and on weekends to outside groups, such as hospice groups,
service clubs, and conferences of city planners or Arizona Town Hall attendees.
The reader is referred to mention in no. 2 above of the many recognitions for
professional service that demonstrate maintenance ofthe public trust. The
museum has developed exhibits, lectures series, research programs, and festivals
that serve public expectations ofa large museum.
4. The extent to which rules adopted by the agency are consistent with the legislative
mandate. To date, the Prescott Historical Society has adopted no rules. However,
one rulemaking process will begin soon, in consultation with our Assistant
Attorney General, a result ofthe passing of a bill during the 2004 legislative
session that allows this state agency to charge of an admission fee for the daily
visitor. Such an ability to gain new revenue was a direct result ofthe severe
budget cuts absorbed by this agency during the two statewide 10% reduction
actions.-
5. The extent to which the agency has encouraged inputfrom the public before
adopting its rules and the extent to which it has informed the public as to its
actions and their expected impact on the public. Again, no rules have been
adopted yet, but a rule regarding an admission fee is now being looked into. The
museum director has spoken to many service clubs, communicated with the
membership ofthe museum, and has explored the admission fee in his regular
Sunday column in the local newspaper. No resistance has yet been encountered.
Indeed, some individuals wondered why the fee (instead ofdonation) had not
been in place long before.
6. The extent to which the agency has been able to investigate and resolve
complaints within. its jurisdiction. As a museum, the Prescott Historical Society
-seldom receives complaints of any serious nature. There have been no complaints
to investigate and resolve, legally or procedurally, since the last sunset review.,
7. The extent to which the Attorney General or any other applicable agency ofstate
government has the authority to prosecute actions under the enabling legislation.
The Attorney General or an applicable state agency has legitimate authority, as far
as is known. No situation has arisen to activate such authority.
8. The extent to which the agency has addressed deficiencies in its enabling statutes
'that prevent itfromfuljilling its statutory mandate. One deficiency, mentioned in
n. 5 above, has been addressed - the transition from a donation-based museum
visit, to a fee-based museum visit. Other statutory language that needs
addressing includes the date for the annual meeting, and the limit on membership
dues of $25.
9. The extent to which changes are necessary in the laws ofthe agency to adequately
comply with these factors. Only modest measures are contemplated, such as
allowing the annual meeting to take place during a particular month, rather than
on a certain day; and allowing a membership dues schedule to accommodate
many levels of generosity and support, well above the $25 "ceiling." Currently,
the membership dues are a non-state revenue stream, and a program of the
nonprofit partner organization.
10. The extent to which the termination ofthe agency would significantly hdrm the
public health, safety or welfare. Ofcourse, museum operations are not
necessarily related to public heath and safety, unless one considers that a thinking
and informed public, presented with insights into Arizona's heritage and cultures
in a variety ofpleasing formats, is a healthier and safer public. Public welfare, in
the sense of the economic stability ofdowntown Prescott and ofthe service area,
would be significantly hanned by the absence ofone ofArizona's premier
museums. On any list of state tourism attractions, the Sharlot Hall Museum is
consistently in the top twenty. Termination would require that thousands of
objects and documents in the historical collections go into receivership, and
dispersed to other, probably overcrowded and less accessible, storage locations.
Termination would mean the loss ofthe premier cultural institution in a major
population area ofthe state. Termination, ultimately, would mean the loss of
knowledge and perspective that is the basic work ofmuseums, and so important to
nurturing an involved citizenry.
11. The extent to which the level ofregulation exercised by the agency is appropriate
andwhether less or more stringent levels ofregulation would be appropriate.
Current levels ofregulation are appropriate.
12. The extent to which the agency has usedprivate contractors in the performance of
its duties and how effective use ofprivate contractors could be accomplished.
Occasional trade and craft specialists are employed for targeted maintenance of
elements of historic buildings and modem buildings on the museum campus, such
as plumbers, roofers, and electricians, and alarm system workers. Occasional use
ofmuseum specialists, related to specific projects, such as an exhibit on Prescott's
Chinese community, or archival preservation of antique maps, is funded through
grant money, or other non-state money. The current level·ofuse ofprivate
contractors is felt to be effective and strategic, relating to preservation ofhistoric
material, and presentation ofhistoric information.
Four Additional Responses
1. An identification ofthe problem or the needs that the agency is intending to
address. There is one significant problem that resonates through all other
challenges - the budget cuts to this state agency in recent years that reduced
annual allocations from $800,000 to $640,000. These reductions resulted in the
vacancy ofthree state positions, and in the inability to replace two state workers
who departed of their own volition. These reductions also resulted in the further
burdening ofnon-state funds in order to address fundamental expenditures related
to the maintenance of state property, such as the electric bill for a large campus
with many buildings, repairs to groundskeeping equipment, office supplies, and
replacement of one aging pick-up truck. At one time, the goal was to have state
funds matched by non-state funds. That goal occurred, but in the wrong way.
Instead of growing non-state funds to match state funds, the reverse has happened
- state funds decreased to the level of non-state funds. Nonetheless, operational
stability has been maintained, although our "human capital" is stretched to the
limit, and feeling under-rewarded for having to do more with less.
2. A statement, to the extent practicable, in quantitative andqualitative terms, ofthe
objectives ofsuch agency and its anticipated accomplishments. The objective of
the Prescott Historical Society/Sharlot Hall Museum is to increase the service
capacity ofthe agency/museum by expanding the physical facilities, and by
increasing the staffand the revenue (quantitative) to effectively operate the larger
museum campus for increased service delivery (qualitative). It is anticipated that
a $4 million capital and endowment campaign now underway will address that
objective, by 2008-2009. See attached "Honoring the Legacy" campaign
magazme.
3. An identification ofany other agencies having similar, conflicting, or duplicate
objectives, and an explanation ofthe manner in whic;h the agency avoids
duplication or coriflict with other agencies. Other agencies that provide similar
services related to historical education and historical research include the state
library system, the Arizona Historical Society, and certain components ofthe state
parks system, such as Fort Verde State Park and McFarland State Park. We are
unaware of any agencies that have conflicting or duplicative services. Avoidance
ofduplication or conflict occurs through frequent communications among
museum professionals in the state, in both the public and the private sector. The
Museum Association of Arizona is a primary clearinghouse for idea and
information exchange. Through the years, many Prescott Historical Society staff
have served in leadership positions on the MAA board. The work of history and
heritage is wide and deep, and the Prescott Historical Society aggressively serves
its mission area, the Central Highlands or middle third ofArizona, sometimes
partnering with public or private museums.
4. An assessment ofthe consequences ofeliminating the agency or ofconsolidating
it with another agency. Eliminating the agency/museum would cause irreparable
harm to the work of maintaining and exhibiting Arizona's history and heritage.
Historical documents and artifacts would be scattered to other museums or
agencies, and a centralized database ofprecious collections, as well as a valuable
museum visitor experience, would be dissolved. Eliminating the agency/museum
would be a serious blow to the economy ofdowntown Prescott, where the Sharlot
Hall Museum is the major regional attraction. Consolidation, as a previous JLBC
study (1991-1992) showed, would not result in any efficiencies or savings. A
major public-private partnership would be severed, a partnership that nurtures the
existence and the growth ofone ofArizona's finest, award-winning museums.
Many private contributors (corporate sponsors, individual donors, family-based
members, foundations) would be dismayed by such actions, knowing that
elimination or consolidation would diminish the value, indeed negate the very
meaning, oftheir support.
The Prescott Historical Society stands by to clarify information, or to provide additional
information. We look forward to the Sunset Review process, for we see it as an
opportunity to inform the Arizona State Legislature ofthe worthiness ofthis agency.
Sharlot Hall Museum
OrganaaffonalCharl
FY2006
Board of Trustees
Prescott Historical Society
Sharlot Hall Historical Society
19 Members
Director
Richerd Sima
Possible Hiring Order
NewNacant Positions
Over the Next 2-6 Years:
The un-shaded boxes are State employees
through Prescott Historical Society, a State agency
The shaded boxes are employees of the Sharlot
Hall Historical Society, a non-profit organization
Bualn'lI
Maneger
Jeanne Welch
:!,,,oI49te~r.):
Secratary H HC:OClldlnatQr&'
Rec.Pllonlste.....aletter!=C!lto
Gall Sinon (KartnCi\rllslt
I
1.
2.
3.
4.
5.
6.
Curator of Children's Education
Maintenance or Custodial Person
Assistant Curator
Administrative Assistant
IT Person
Visitor Services
Aselstant
Archivist
Scott Anderaon
Grounds
Supervisor
SteveWhllley
Maintenance
Technician
Cody Bennett
Physical Plant
Supervisor
Bob Fields
Custodlel
Supervisor
Carlos Parra
Curator
of Education
Warr.n Millar
Archivist
Ryan Flahive
Curetor ot
Exhibits
George Fuller
Curator
of Anthropology
Sandy Lynch
Curator of
History
Mlck Woodcock
Curator For.
the Humanities
.Pan Shilling '.
Note: The services of the Museum to its
mission area are augmented by over
150 volunteers and by an Adjunct
Curator program that numbers
apprOXimately six scholars at any
given time.
Note: The Museum, founded in 1928 by
Sharlot M. Hall, has a current
operating budget of $1.1 million
and a campus of 3.5 acres.
ARIZONA STATE LEGISLATURE
Senate Government and House of Representatives Government Reform
and Government Finance Accountability Committee of Reference for the
Sunset Review of: Prescott Historical Society, Arizona State Personnel
Board, Government Information and Technology Agency, and Arizona
Department of Administration
Minutes of the Meeting
Tuesday, November 1,2005
9:30 a.m., House Hearing Room 1
Members Present:
Representative Bill Konopnicki, CoChair
Representative Ted Downing
Representative Phil Lopes
Representative John McComish
Representative John Nelson
Members Absent:
Senator Jake Flake
Senator Jim Waring, CoChair
Senator Bill Brotherton
Senator Linda Gray
Senator Harry Mitchell
Staff:
Steve Moortel, House Assistant Legislative Analyst
Nadine Sapien, Senate Government Analyst
Chairman Konopnicki called the meeting to order at 9:30 A.M. and the
attendance was taken.
Presentations
Richard Sims, Director, Prescott Historical Society, presented a brief
overview of the Prescott Historical Society, also known as the Sharlot Hall
Museum, its work both in and around Prescott, and some of the museum's
accomplishments.
Senator Waring asked if the Prescott Historical Society is charging an admission
fee to the museum. Mr. Sims stated through House Bill 2490 (2004), the
Historical Society is allowed to charge an admission fee to the museum. The fee
is $5 for adults and children 18 and under are free.
Senator Waring asked Mr. Sims if it is true that the Historical Society wants to
raise membership dues. Mr. Sims stated the membership program is run·
through the non-profit society which can charge more market rate dues instead of
the low and outdated numbers in the State statute.
Representative McComish asked if the Historical Society's $4 million
capital campaign is being run through the non-profit society. Mr. Sims stated the
campaign is being run through the non-profit.
Representative McComish asked how much of the Society's operating budget
comes from the State and the non-profit. Mr. Sims stated the Society is matching
the State funds of over $600,000 with the non-profifactivities.
Senator Lopes requested that the Historical Society report back as to what the
impact is on the utilization of the museum as a result of the admission fee. Mr.
Sims stated he would be happy to report that information back to the Committee.
Senator Brotherton asked what is the Historical Society's current budget. Mr.
Sims stated the current budget is $640,000 and has been in place for the last
three years. Mr. Sims stated the budget had been reduced from $800,000 due to
budget cuts and as a result the museum had to cut five State positions.
Senator Brotherton asked if the loss of employees is an ongoing issue for the
museum. Mr. Sims stated the loss of State personnel is an ongoing problem as
a result of prior budget cuts.
Senator Brotherton asked Mr. Sims where he would want the budget to be on an
annual basis. Mr. Sims stated he would like to see the budget fully recovered
back to 18 full time employees.
Senator Gray asked how much money has come in from the $5 admission fee.
Mr. Sims stated that tracking back to last October the museum has budgeted for
a little over $50,000 based on daily attendance. Mr. Sims did not have the
figures for the current quarter but he stated that he would report back to Senator
Gray with those numbers.
Mr. Sims stated all of the money from State allocations goes towards personnel
and risk management costs and everything else needed to run the museum
comes from the non-profit revenue stream.
Representative Lucy Mason stated her appreciation for Mr. Sims' ability to run
the museum with the resources that have been allocated and urged the
committee to continue with the funding of the Historical Society.
Representative Konopnicki stated the Committee will do what it can to try to
restore the museum's funding but he is not sure how soon, or if ever, funding can
be re-established to agencies that have been cut.
Representative McComish stated the Historical Society has done a great job of
working with the private sector and non-profits. Representative McComish
added that this does bring up the question of how much responsibility the State
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 2
takes for buying certain items, such as mop heads, and how much do non-profits
take.
Senator Waring moved to recommend the continuation of the Prescott Historical
Society for ten years and the motion was seconded by Representative Lopes.
Roll call vote was taken on the recommendation and passed 9-0-1
(Attachment 1).
Senator Brotherton stated he supports the continuation and that he would like to
see more of the non-profit monies that are raised being used for the extras that
cannot be achieved through State funds instead of so much of it going towards
the operational budget of the museum. Senator Brotherton also stated he does
not believe it is fair to cut taxes and not to give money back to State agencies
that have been cut and stretched thin for a long time.
Senator Gray commended Mr. Sims on the job that he is doing.
Representative Konopnicki commended the Prescott Historical Society on the job
that it is doing and stated that while there has been talk of a tax cut, the
Legislature has to be careful in the next few years with how they try to reestablish
State agencies.
Judy Henkel, Executive Director, Arizona State Personnel Board, presented
a brief history and overview of the Arizona State Personnel Board.
Representative Downing asked what the frequency is of whistleblower
complaints and what savings the State may have incurred because of these
complaints. Ms. Henkel stated the Board received approximately seven to ten
whistleblower complaints last fiscal year and each hearing process costs
approximately $1,100.
Representative Downing asked how many ofthe whistleblowers' allegations were
upheld. Ms. Henkel responded that in a majority of the cases the employee does
not win because the whistleblower statute is very specific as to what has to be
proven and in a majority of the cases those specifics were not met.
Representative Downing commented whistleblowers play an important role in
government reform and fiscal responsibility and these people need to be
protected in order for them to come forward with information.
Senator Waring asked how many responses the Board had received from the
satisfaction surveys which are mailed to all parties involved in hearings. Ms.
Henkel stated the Board hears about 48 cases or more each year and
approximately half respond to the surveys.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 3
Representative Lopes pointed out that appeals and complaints rose from 62. in
2004 to 101 in 2005 and asked Ms. Henkel if this increase in one year is normal
and if this statistic concerns her.
Ms. Henkel stated the fluctuation varies and in some years the numbers have
been much lower. Ms. Henkel added settlements have increased to 30% and as
a result even though the Board has received 101 complaints most likely some of
those have settled.
Ms. Henkel stated the only concern she has is if there were an increase in the
number of appeals filed it would increase the Board's budget.
Representative Lopes asked what the difference in cost is between a case that
settles and one that goes through the entire process. Ms. Henkel stated the
average cost for a hearing is $1,100 and the savings for a case that is settled is
approximately half of that.
Representative McComish asked if the Board has a procedure to give feedback
to an agency in order to learn from a complaint that has been filed. Ms. Henkel
stated in the past agencies have contacted the Board and in some cases the
Board has met with agency directors.
Senator Waring moved to recommend a continuation of the Arizona State
Personnel Board for ten years and the motion was seconded by Representative
Lopes.
Roll call vote was taken and the motion passed 9-0-1 (Attachment 2).
Jay Dunkleberger, Senior Performance Auditor, Arizona Office of the
Auditor General, presented a PowerPoint presentation of the Office's
Performance Audit and Sunset Review of the Government Information
Technology Agency (GITA) and Sunset Review of the Information Technology
Authorization Committee (ITAC) (Attachment A).
Senator Waring asked if it is a fair assessment that GITA is not performing the
functions in the security and privacy areas that it should. Mr. Dunkleberger
stated that he would not characterize it that way but GITA does need
improvement in enforcing policies and standards.
Senator Mitchell commented that an Auditor General's report titled "Department
of Administration Information Services Division Telecommunications Program
Office,n seems to be asking this office the same thing that the Auditor General is
asking GITA to do. Senator Mitchell asked if there are two different agencies
involved with security.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 4
Mr. Dunkleberger responded GITA's role is to set the statewide standard and the
Department of Administration (DOA) enforces security within its agency and has
a role in the privatized telecommunications network. Mr. Dunkleberger added
there is some overlap and in the recommendation, the Auditor General is looking
for GITA to provide guidance for all agencies, including DOA's administration of
the telecommunications project.
Senator Brotherton asked what mechanisms are available for enforcing policies
that are already in place. Mr. Dunkleberger stated GITA asks agencies to self
report their compliance with security standards each year and GITA will then
meet with those agencies to attempt to improve problems that have been
identified. GITA has also formed a statewide security committee that examines
how to address security issues.
Senator Brotherton asked how GITA enforces policies if agencies do not comply.
Mr. Dunkleberger stated unless there have been changes made to GITA's
statutory requirement since the Auditor General's report, there is little in statute
that allows them to make physical changes to State agencies.
Senator Brotherton commented if there is an enforcement issue, it will be
something that the Committee needs to look at.
Mr. Dunkleberger commented the Auditor General did recommend the formation
of a Chief Security Officer position and for GITA to look at the statutory need of
this position and how it can be established in statute.
Senator Waring asked how many of GITA's projects fall between $25,000 and
$200,000. Mr. Dunkleberger stated in 2004 there were 87 projects and half fell
under $200,000.
Chris Cummiskey, Director, GITA, and State Chief Information Officer,
provided GITA's response to the Auditor General. Mr. Cummiskey stated GITA
concurs with the overall findings and recommendations of the Auditor General
and is working to track and implement strategies for each one.
Mr. Cummiskey stated GITA's role is to sit as an independent agency to review
the work product of the other 114 agencies, boards, and commissions as it
relates to Informa~ion Technology (IT) planning and projects and make sure they
are working within a set of standards and protocols that have been agreed upon
by industry and other state governments across the country as best products.
Mr. Cummiskey stated since its inception, GITA has done a good job of making
sure that projects stay on budget, on time, and within the parameters set forth by
the Legislature.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
PageS
In regards to Senator Brotherton's previous questions regarding enforcement
mechanisms, Mr. Cummiskey stated GITA's options for enforcing compliance is
limited. The Project Investment Justification process (PIJ), by statute, requires
agencies to report to GITA with a plan and seek approval before they can move
forward with a project and the budget offices of both the Office of Strategic
Planning and Budgeting (OSPB) and the Joint Legislative Budget Committee
(JLBC) have been good about not authorizing the release of funds until this step
has been satisfied.
Mr. Cummiskey added GITA has few options when it comes to telling agencies to
change what they are doing. Mr. Cummiskey stated there are standards to which
GITA pointsto and they alsotry to work with them to comply but their only option
is to shut down the project funding.
Senator Waring asked Mr. Cummiskey if GITA has a plan to work with DOA
regarding security and privacy issues. Mr. Cummiskey stated GITA has been
working closely with DOA because it does have operational responsibility for the
common relays for communications across the agencies. GITA is also working
with an IT Security Advisory Committee, which consists of the three mainframe
agencies, the Department of Economic Security (DES), the Department of Public
Safety (DPS), and DOA, as well as other entities such as the Federal Bureau of
Investigation (FBI) and the universities to work on what the State needs to do to
protect the network in the best ways possible.
Mr. Cummiskey added GITA will appoint the Chief Security Officer position that
the Auditor General recommended to serve as a strategic link with DOA, the
Governor's Office for Homeland Security, and the Arizona Department of
Emergency and Military Affairs (DEMA), who all have pieces of the puzzle for
security.
Representative Konopnicki commented that security is the most important issue
and GITA should be given more power to enforce security policies other than
shutting down project funding.
Mr. Commiskey stated GITA has received good compliance from the agencies
but because of the situation that GITA is in statutorily, the best way to get
compliance is to work with agency directors and their teams and educate them
as to why the IT standards are important as they relate to security and why they
need to be invoked. However, with 114 agencies it is taking time to educate
these agencies, especially those without large IT staffs.
Representative Konopnicki asked how important is it to firm up security issues
with the smaller agencies. Mr. Cummiskey stated it is very important not to leave
any agency or board behind. Mr. Cummiskey added GITA, in conjunction with
DOA, is in the process of shutting down access points to the internet.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 6
Representative Nelson commented that information in a response from GITA to
JLAC in October 2005 shows that a great deal of money was expended for a
number of projects that were not approved. Representative Nelson asked how
GITA got to a point where money is being spent on projects that do not move
forward.
Mr. Cummiskey stated that he could not answer what happened prior to January
2003 but since then he does not know of any projects that fall into this category.
Mr. Cummiskey added that he will have his staff research this issue in order to
find a resolution so this will not happen again in the future.
Senator Brotherton asked Mr. Cummiskey if he believed there is a need for
additional enforcement tools or if the current mechanisms are adequate if used
effectively. Mr. Cummiskey stated GITA is cautious with the Auditor General's
recommendation of auditing an agency and going beyond simply requiring an
agency to report on their progress as it relates to the standards. Mr. Cummiskey
added GITA can go in and find out why an agency is not complying with the IT
standards from a strategic standpoint as it relates to the standards, but they feel
they do not have the expertise in-house to take over an agency's operation if
they do not comply.
Senator Brotherton commented that information regarding agencies that do not
comply with security standards should be more readily available to the
Legislature.
Senator Brotherton asked Mr. Cummiskey to comment on the difference of
opinion between the Auditor General and GITA in regards to consulting on the
actual creation and implementation of projects.
Mr. Cummiskey stated GITA has adopted an Interagency Service Agreement
with Enterprise Procurement Services to set out rules and responsibilities and sit
in on committees that are established to look at large scale IT projects as
technical advisors. Mr. Cummiskey added the point that GITA did not want to
cross over was becoming voting members of those committees because they felt
that it would compromise their ability to be independent and communicative with
both the Governor's office as well as the Legislature.
Representative Downing asked if the Legislature receives a scorecard illustrating
agencies' compliance with security standards and if such a scorecard would be
useful. Mr. Cummiskey stated currently members of the Legislature are not
being provided that information, however, it would be a useful tool and GITA is in
the position to provide the members that information.
Representative Downing commented that having that information available to the
members of the Legislature would be useful.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 7
Representative Downing asked if GITA provides technical support to the.
Secretary of State. Mr. Cummiskey stated GITA has not provided technical
assistance to the Secretary of State. Mr. Cummiskey added typically with the
Secretary of State and other constitutionally elected officers, GITA will not
provide assistance unless requested by a particular office.
Representative Downing asked if GITA should be assigned a statutory role to
protect the security of the State's voting systems. Mr. Cummiskey stated there is
value in having an agency that tracks and manages best practices involved in
large scale technological acquisitions with the State.
Representative Downing recommended that the Legislature consider GITA
having an active technical advisory role with the State's voting systems.
Senator Brotherton asked if there is a potential security risk with those offices
that GITA does not provide technical support to. Mr. Cummiskey stated GITA
does have a partnership with most of the State entities in State government. Mr.
Cummiskey added there are some entities that decided they have enough inhouse
IT council and they do not need additional information from GITA.
However, if these entities do connect to the State network they must comply with
GITA standards and DOA has been vigilant about this.
Representative Konopnicki commented that he agreed with Senator Brotherton
and it is important to make sure that all entities must comply with GITA standards
if they connect to the State network.
Senator Waring moved to recommend a continuation of the Government
Information Technology Agency for ten years and the motion was seconded
Roll call vote was taken and the motion passed 6-0-4 (Attachment 3).
Dale Chapman, Performance Audit Manager, Arizona Office of the Auditor
General, presented a PowerPoint presentation of the Office's Performance Audit
and Sunset Review of the Arizona Department of Administration (Attachment B).
Representative Lopes asked if the audit was able to determine if DOA was able
to achieve its goals of limiting growth of health care costs and increase provider
choice through the implementation of self-funded health benefits. Mr. Chapman
stated it was too early to determine if the program has achieved any savings or
reduction of costs. Mr. Chapman added the program has increased choice for
employees.
Representative Lopes asked if there are any mechanisms in place to assure the
consistency of workers' compensation claims awarded. Mr. Chapman ~tated
DOA's processes, policies, and procedures were reviewed to determine if they
did conform with statute and if the policies and procedures were followed. Mr.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 8
Chapman added with a few exceptions it was found by and large that the policies
and procedures are being followed.
Representative Lopes asked if the issue of timeliness was looked at in the review
of DOA's plans for the oversight of procurement in the State. Mr. Chapman
stated at the time of the audit DOA was implementing this program and the
Department might be better able to answer that question.
Bill Bell, Director, Arizona Department of Administration, provided the
Department's response to the Auditor General's recommendations. Mr. Bell
stated the Auditor General's report provides an excellent diagram for how to
begin to approach some of the problems that were identified and DOA plans to
follow many of the recommendations.
Kathy Peckardt, Director of Human Resources, Arizona Department of
Administration, provided the response to the Auditor General's
recommendations for Human Resources Information System (HRIS)
(Attachment B) which were to develop a plan for the completion for HRIS and
enhance user participation.
Ms. Peckardt stated DOA has met with the large State agencies and developed a
systematic methodology to develop a process to find what is important to the
agencies as phase two of HRIS begins. This information will be used in
developing a five year plan that will be completed approximately by January.
Ms. Peckardt added DOA is also working on a data warehouse that will contain
employee information such as turnover.
Senator Brotherton asked what the turnover rate is for DOA and if there is a
target percentage for where they would like the turnover rate to be. Ms. Peckardt
stated DOA's turnover rate is approximately on average with the State's overall
turnover rate of 17.6% and would like to be more in line with rates of other states
and local cities which is between 11% and 12%.
Senator Brotherton asked what issues need to be addressed in order to reduce
the turnover rate. Ms. Peckardt stated if the issue of pay is addressed it will
reduce the turnover rate significantly.
Representative Konopnicki asked where DOA is in the development of the
comprehensive plan for HRIS. Ms. Peckardt stated DOA is currently in the
process of obtaining agency involvement and asking for their input of priorities for
the next five years. This information is expected to be received by the end of
November and will then be prioritized in December. It is anticipated that a
completed plan will be finalized in January.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 9
Tim Boncoskey, Assistant Director of Enterprise Procurement Services,
Arizona Department of Administration, responded to the Auditor General's five
recommendations for improving oversight of procurement in the State
(Attachment B). Mr. Boncoskey stated all five recommendations are in the
process of being completed.
Senator Gray asked what areas of House Bill 2582 (2001), which allowed
reverse bidding, have been implemented. Mr. Boncoskey stated DOA is
currently working with vendors but there has not been any reverse bidding. Mr.
Boncoskey added DOA is looking to have reverse bidding up and operating by
the end of this fiscal year.
Ray Di Ciccio, State Risk Manager, Arizona Department of Administration,
responded to the Auditor General's two recommendations for workers'
compensation (Attachment B).
Mr. DiCiccio stated the first recommendation was to improve employee
communication by providing more information through the phone system and
website. Mr. DiCiccio stated both the phone system and website have been
updated. Mr. DiCiccio added other items have been implemented to help with
communication. These include an agency liaison that goes to the agencies and
provides employees with information, semi-annual meetings with all of the
agencies in order to discuss workers' compensation benefits, and a
representative who is sent to employee orientations to explain reporting
requirements and benefits.
In response to the second issue of the backlog of workers' compensation claims,
DOA has already put a special emphasis on that and there is no longer a
backlog.
Representative Konopnicki commented that in the audit it is mentioned that the
employee makes the workers' compensation claim but in some cases the DOA
was already acting on cases before they were reported and in others DOA waited
until after the claim was reported. Representative Konopnicki stated this is an
issue that needs to be looked at because all employees should be treated the
same way.
Mr. DiCiccio stated it is important to act on the claims in a timely manner but he
is not aware of any differences in how DOA is processing the claims because
there is a manual that states the procedures to follow on each claim.
Kathy Peckardt, in response to health benefit complaints, stated DOA does have
a help desk for the sole purpose of addressing complaints from employees
regarding their health benefits.
Senate Government and House of Representatives
Government Refonn and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 10
Representative Downing commented a help desk is useful for an employee that
has the capacity to complain but some employees are incapacitated and cannot
call a help desk.
Mr. Bell stated DOA will be reviewing its procedures and auditing its vendors and
if there is a structural problem, it will be fixed.
Representative Konopnicki commented that there was an immediate increase of
14% in the insurance premium, an upcoming increase of 17%, and consultant
fees were $6 or $7 million and he wanted to know when this increase in spending
will stop. Mr. Bell stated it is DOA's objective to reduce costs and make this a
cost effective project while providing the kind of service that is expected to
employees.
Michael Totherow, Assistant Director of the Information Services Division
(ISO) Chief Information Officer, Arizona Department of Administration,
provided DOA's response to the Auditor General's recommendations for ISO and
the Telecommunications Program Office (Attachment B).
Mr. Totherow stated in regards to the Auditor General's findings, ISO embraces
as many best practices as possible to provide security for the systems housed
within DOA's data center and the services provided for other agencies. Mr.
Totherow added ISO is a cost recovery operation not directly funded for security
services and when money is limited, many agencies will focus on serving the
constituency and security is often put to the side.
In regards to the recommendation of a state-wide security officer, Mr. Totherow
stated there is an overlap with this recommendation and the recommendation for
a chief security officer for GITA and DOA has been working with GITA to define
what the best scenario would look like.
In regards to the recommendation for the need for the Telecommunications
Office to oversee the inventory process, Mr. Totherow stated through next March
agencies will continue to transition on to AZNET. During this time agencies will
be taking what they are providing for their own telecommunications and data
wide area network (WAN) an d then turning it over to the program control of
Accenture to run in an outsource fashion. This turn over of control is where
agencies are looking at what their inventory is, signing off on what is in scope
and out of scope, and concur that requirements are met.
Representative McComish asked what can be done when agencies do not want
to pay for independent security assessments of their information systems at least
once every three years as recommended by national standards. Mr. Totherow
stated GITA adopts many of these national standards into their standards and
policies that have been enforced upon agencies and the costs have become part
of their budgetary process.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 11
Mr. Bell stated there is a gap in security and a plan needs to be developed that
encompass all of the agencies in regards to this gap and also develop a
comprehensive program that can be administered consistently to help agencies
with security issues.
Representative Konopnicki agreed with Mr. Bell and stated the State cannot
afford to treat security like it has in the past.
Senator Brotherton asked if DOA can prevent an agency from connecting to the
State network if they do not have the proper security standards. Mr. Totherow
stated DOA does not have the authority to enforce security in other agencies,
constitutional offices, the Legislature, or the courts and this is the gap that DOA
would be working with GITA to address from a state wide perspective.
Senator Brotherton asked how talking to GITA will give DOA the authority to
enforce security. Mr. Bell stated there are gaps and confusion as to DOA's
responsibilities in regards to security and it is important for DOA to sit down with
GITA and other agencies to find an answer to this problem.
Representative Konopnicki commented that the issue of security enforcement
and responsibility needs to be solved as soon as possible and in order for that to
happen GITA needs to playa large role and DOA's responsibilities need to be
defined.
Mr. Bell stated whether it is GITA, DOA, or another agency that is responsible for
security, it is important to find a solution and provide the security that everyone is
seeking.
Representative Konopnicki stated the responsibility for security needs to go to a
cabinet level agency where security polices can be set and enforced.
Senator Brotherton commented if the Legislature needs to do something, it
needs to be done this legislative session.
Representative Konopnicki stated this is a non-political issue and an issue that is
paramount to the security of Arizona. Representative Konopnicki added that
DOA should take the lead and come back to the Committee with
recommendations.
Mr. Bell stated DOA takes the Auditor General's report seriously and will be
working diligently to implement their recommendations.
Senator Waring moved to recommend the continuation of the Arizona
Department of Administration for ten years and was seconded by Representative
McComish.
Senate Government and House of Representatives
Government Reform and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 12
Roll call vote was taken and the motion passed 7-0-3 (Attachment 4).
Representative Konopnicki commented that the security issue jumped off the
page in everything that was looked at and the Committee would not be doing its
due diligence if they did not follow up on that issue and make something happen.
There being no further business, Representative Konopnicki adjourned the
meeting at 12:35 p.m.
Respectfully submitted,
~WJ
Committee Secretary
(Tapes and attachments on file in the Secretary of the Senate's Office/Resource Center, Room
115.)
Senate Government and House of Representatives
Govemment Refonn and Government Finance Accountability
Committee of Reference
November 1, 2005
Page 13
SENATE GOVERNMENT AND HOUSE OF
REPRESENTATIVES GOVERNMENT REFORM AND
GOVERNMENT FINANCE ACCOUNTABILITY COMMITTEE OF
REFERENCE FOR THE SUNSET REVIEW OF: PRESCOTT
HISTORICAL SOCIETY, ARIZONA STATE PERSONNEL
BOARD, GOVERNMENT INFORMATION AND TECHNOLOGY
AGENCY, AND ARIZONA DEPARTMENT OF
ADMINISTRATION
ARIZONA STATE LEGISLATURE
FORTY-SEVENTH LEGISLATURE - ROLL CALL VOTE
Recommendation: Continuation of the Prescott Historical Society for ten
years.
Rep. Downing x
Rep. Lopes x
Rep. McComish x
Rep. Nelson x
Senator Brotherton x
Senator Flake x
Senator Gray x
Senator Mitchell x
Senator Waring, CoChair x
Rep. Konopnicki, CoChair x
Committee Secretary -~-=..7.: ) ~::;...:;--,< =T....J.1.'--._- _
November, 2002
Date November 1J 2005
SENATE GOVERNMENT AND HOUSE OF
REPRESENTATIVES GOVERNMENT REFORM AND
GOVERNMENT FINANCE ACCOUNTABILITY COMMITTEE OF
REFERENCE FOR THE SUNSET REVIEW OF: PRESCOTT
HISTORICAL SOCIETY, ARIZONA STATE PERSONNEL
BOARD, GOVERNMENT INFORMATION AND TECHNOLOGY
AGENCY, AND ARIZONA DEPARTMENT OF
ADMINISTRATION
ARIZONA STATE LEGISLATURE
FORTY-SEVENTH LEGISLATURE - ROLL CALL VOTE
Recommendation: Continuation of the Arizona State Personnel Board for ten
years.
Rep. Do.wning x
Rep. Lopes x
Rep. McComish x
Rep. Nelson x
Senator Brotherton x
Senator Flake x
Senator Gray x
Senator Mitchell x
Senator Waring, CoChair x
Rep. Konopnicki, CoChair x
Committee Secretary
November, 2002
k·~:r--"._--- Date November 1, 2005
~T-=3__
SENATE GOVERNMENT AND HOUSE OF
REPRESENTATIVES GOVERNMENT REFORM AND
GOVERNMENT FINANCE ACCOUNTABILITY COMMITTEE OF
REFERENCE FOR THE SUNSET REVIEW OF: PRESCOn
HISTORICAL SOCIETY, ARIZONA STATE PERSONNEL
BOARD, GOVERNMENT INFORMATION AND TECHNOLOGY
AGENCY, AND ARIZONA DEPARTMENT OF
ADMINISTRATION
ARIZONA STATE LEGISLATURE
FORTY-SEVENTH LEGISLATURE - ROLL CALL VOTE
Recommendation: Continuation of Government Information Technology
Agency for ten years.
Rep. Downing x
Rep. Lopes x
Rep. McComish x
Rep. Nelson x
Senator Brotherton x
Senator Flake x
Senator Gray x
Senator Mitchell x
Senator Waring, CoChair x
Rep. Konopnicki, CoChair x
Committee Secretary -----:t):.,e-~..=...c-~'-->{;-;\;-~"""'7l:--'---- Date November 1! 2005
November, 2002
SENATE GOVERNMENT AND HOUSE OF
REPRESENTATIVES GOVERNMENT REFORM AND
GOVERNMENT FINANCE ACCOUNTABILITY COMMITTEE OF
REFERENCE FOR THE SUNSET REVIEW OF: PRESCOTT
HISTORICAL SOCIETY, ARIZONA STATE PERSONNEL
BOARD, GOVERNMENT INFORMATION AND TECHNOLOGY
AGENCY, AND ARIZONA DEPARTMENT OF
ADMINISTRATION
ARIZONA STATE LEGISLATURE
FORTY-SEVENTH LEGISLATURE - ROLL CALL VOTE
Recommendation: Continuation of the Arizona Department of Administration
for ten years.
Rep. Downing x
Rep. lopes x
Rep. McComish x
Rep. Nelson x
Senator Brotherton x
Senator Flake x
Senator Gray x
Senator Mitchell x
Senator Waring, CoChair x
Rep. Konopnicki, CoChair x
Committee Secretary -----,pf7l!'::::L.M.a:::.<:~l]."."..".;':~z.;..,.-..-._.----
November, 2002
Date November 1, 2005
