Program Review and Investigations Committee


Minutes of the<MeetNo1> 5th Meeting

of the 2002 Interim


<MeetMDY1> October 10, 2002


The<MeetNo2> 5th meeting of the Program Review and Investigations Committee was held on<Day> Thursday,<MeetMDY2> October 10, 2002, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Gippy Graham, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Gippy Graham, Chair; Senator Katie Stine, Co-Chair; Senators Charlie Borders, Brett Guthrie, Ernie Harris, Paul Herron Jr, Vernie McGaha, Dan Seum, and Johnny Ray Turner; Representatives Adrian Arnold, Sheldon Baugh, Dwight Butler, Charlie Hoffman, and Dottie Sims.


Guests:  Tom Jones, Executive Director, East Kentucky Corporation; Steve Zea, President, West Kentucky Corporation; Debby Spencer, Vice President, West Kentucky Corporation; Marcia Morgan, Secretary, Cabinet for Health Services and Tricia Salyer, Director, Division of Medicaid Services for Mental Health/Mental Retardation, Cabinet for Health Services


LRC Staff:  Greg Hager, Acting Committee Staff Administrator, Lowell Atchley, Judy Fritz, Tom Hewlett, Alice Hobson, Joseph Hood, Margaret Hurst, Dan Jacovitch, Erin McNees, Stacie Otto, Cindy Upton, Perry Nutt, LRC Staff Economist, Barry Boardman, LRC Staff Economist and Susan Spoonamore, Committee Assistant.


Minutes of the September 12, 2002 meeting were approved by voice vote upon motion made by Representative Arnold and seconded by Rep. Baugh.


Perry Nutt, LRC Staff Economist, explained that the East and West Kentucky Corporations were created by statute in 1990 and 1992, respectively.  Each corporation was created as a public agency and established by statute as an independent, de jure municipal corporation of the Commonwealth.  He stated that the goal of the study was to provide a comprehensive review of each corporation with emphasis placed on determining the extent to which the activities of each corporation complemented, or duplicated, those performed by the Cabinet for Economic Development’s East and West Regional Office, the former Department for Coal County Development, the Department of Business Development and the Area Development Districts. In summarizing, Mr. Nutt stated that the East Kentucky and West Kentucky Corporation had developed unique areas of economic development expertise tailored to meet the needs of their regions, therefore maintaining a complementary and supplementary relationship among economic development agencies in the state. He stated that staff had reviewed compliance of the East Kentucky and West Kentucky Corporation with respect to submission of strategic plans and annual reports to the appropriate state agencies, the conducting of annual audits, and the composition of the board of directors and the executive committee. He said that, overall, the corporations had been operating appropriately, but staff’s analysis did find some areas of concern. He stated that West Kentucky Corporation’s bylaws regarding a quorum contradicted the definition established in statute and the designated membership of the executive committee did not follow statute. He said that East Kentucky Corporation’s bylaws with respect to the Project Advisory Committee reduced the power of their executive committee, and that both corporations could improve record-keeping at their meetings. He also said that the East Kentucky Corporation was the easiest of the two to evaluate because of the tangible, quantifiable results of their efforts in recruiting firms, promoting regional industrial parks, and providing loans to existing businesses. He said that in respect to the effectiveness of the West Kentucky Corporation, staff was not able to make a definitive assessment because of the absence of any effort by the corporation to monitor and evaluate the benefits derived from its marketing efforts.  In closing, Mr. Nutt presented nine recommendations to the Committee for their consideration (a copy of the report and recommendations can be found, in its entirety, in the LRC Library file).


Rep. Arnold asked if the Corporations had used coal severance tax money. Mr. Nutt stated that the Corporations were presently being funded through local government and economic development funds, which represented coal severance tax receipts that had been returned back to the counties.


Rep. Sims asked how much state funding was received by the East Kentucky and West Kentucky Corporations. Mr. Nutt stated that for the last fiscal year, the East Kentucky Corporation received $472,000 and the West Kentucky Corporation received $467,000. 


Rep. Sims asked if it was correct that the West Kentucky Corporation had 66 cities and the East Kentucky Corporation had 55 cities. Mr. Nutt stated that was correct.


Rep. Sims asked which corporation covered the most population. Mr. Nutt stated that for the largest total population it would be West Kentucky Corporation.


Rep. Baugh asked for examples of the new initiatives in the West Kentucky Corporation. Mr. Nutt stated that agri-tourism, the biomass project at Murray State University (MSU) and the ethanol project were somewhat new initiatives. 


Rep. Baugh asked if the West Kentucky Corporation had any area development district directors as members of their Board.  Mr. Nutt stated that as provided under the statutes, the West Kentucky Corporation was not allowed to have any area development district directors on the Board.


Rep. Baugh asked for the expenses of each Corporation. Mr. Nutt stated that he did not have the audits in front of him, but he would gather that information for Rep. Baugh.


Rep. Baugh asked if the West Kentucky Corporation had an economic loan development fund. Mr. Nutt stated that WKC did not have an economic loan development fund, because they had revolving loan funds that were sufficiently addressing the needs in their area.


Rep. Baugh asked if the grants accompanying expenditures in the WKC were additional to the $467,000 in state funds. Mr. Nutt stated that the grants were in addition to the $467,000.


Rep. Baugh asked if office expenses and salaries were expenses of the $467,000. Mr. Nutt stated that when looking at both entities, their biggest expenses were salaries, benefits, office expenses, postage, promotions, and telephone expenses.


Rep. Baugh asked what the salaries were for the six employees. Mr. Nutt stated that he did not know the salaries, but would get that information.


Sen. Seum asked how many of the 26 recruited firms would have come to Kentucky without the intervention of EKC. Mr. Nutt explained that staff was unable to be definitive in that assessment because of limited information about the firms and their location decisions.


Sen. Seum asked if it would be normal for a company wanting to locate in Kentucky to contact the East Kentucky Corporation. Mr. Nutt stated that the company would probably come in contact with the Corporation.


Sen. Seum stated that the report says that only 20% of the recruited firms received loans.  He asked if the other firms had not applied for the loans. Barry Boardman, LRC Staff Economist, stated that 20% of the firms recruited by EKC also received their economic development loan fund as well.  He said that it could not be determined if the recruitment efforts and the loans were instrumental in bringing business into Kentucky. 


Sen. McGaha asked why local funding and contributions had steadily dropped off in the last few years. Mr. Nutt stated that local contributions were voluntary, and that a lot of the cities and counties in East Kentucky were simply not contributing.  He stated that EKC had received 33% of their contributions from counties and 40% from cities for fiscal year 2001.  


Sen. McGaha asked what the percentages were in 1991. Mr. Nutt stated that he would go through his notes and obtain those figures. 


Sen. McGaha asked if the Corporations were receiving enough money from the state to operate without receiving any local funds. Mr. Nutt explained that in the early years, EKC received a lot of corporate contributions in which to capitalize their economic development loan fund. He said that the most recent numbers for EKC reflected local contributions in the range of about $60,000.


Sen. McGaha asked how much of the $85,000 was from local contributions. Mr. Nutt stated that $60,000 was from local contributions.


Rep. Arnold asked if the board members were compensated or if they were elected officials.  Mr. Nutt stated that no board member was compensated. 


Rep. Arnold asked if EKC made loans to the companies through the corporation or was it through the Economic Development Cabinet. He also asked if those companies were repaying the loans. Mr. Nutt explained that the loans were made through the Corporation.  He also stated that EKC had loaned monies to 41 companies, and 26 of those companies were still in operation and were current on their loans. He also said that eight of those companies were no longer in operation, but had repaid their loans, and seven out of the 41, approximately 17%,  were not operating and those loan proceeds had not been recovered.


Tom Jones, Executive Director, East Kentucky Corporation, stated that in regard to Recommendation 1, a decision to rescind the corporation’s ability to issue bonds would be a matter for the General Assembly to decide. He also said that the concerns raised in Recommendations 2 and 3 could be better addressed through improved documentation in the minutes. As to Recommendation 7, he stated that EKC did realize that the employment market was not as saturated with entry-level workers that became available because of changes in the public assistance programs, therefore EKC was in the process of seeking out firms to bring more intermediate-skilled jobs to Kentucky.


Rep. Baugh asked if EKC referred industrial companies to other areas of the state if it was determined that their market was saturated. Mr. Jones stated that EKC has referred at least three tele-service companies to the West Kentucky Corporation, and EKC does the same with the Kentucky Economic Development Cabinet.


Mr. Jones stated that the EKC did not have an opinion on Recommendation 9.


Mr. Jones responded to the question regarding why only a small percentage of the companies recruited by EKC had actually received loans. Mr. Jones stated that the EKC recruits mature companies from out of state, and typically a $50,000 or a $100,000 loan is not a type of loan that would make any difference to them. The EKC does not really offer loans to mature companies. He said that loans are usually made to home-grown companies or companies who are expanding their facilities.  


Mr. Jones also responded to the question regarding local contributions. He said that during the start-up in 1991,  the Ashland Corporation Foundation and A.T. Massey Coal Company contributed private capital to the EKC.  He said that in 1997, 1998 and into 1999, the EKC received a one time grant from the E.O. Robinson Foundation which was for a three year period only.  He also said that the contribution rate received from the counties and cities had been consistent.


Sen. McGaha asked if state contributions had doubled for the West Kentucky Corporation within the last ten years.  Steve Zea, President, West Kentucky Corporation, stated that the contributions had not doubled. 


Sen. McGaha asked if the Corporations were actively pursuing grants to help with funding. Mr. Jones said that they were actively pursuing grants and low interest rate loans from the United States Department of Agriculture and other agencies. He said that EKC was also looking at foundations to help augment the state support. 


Mr. Zea stated that the West Kentucky Corporation was also doing the same to help augment their state support.  He said that the WKC had received grants from Murray State University, Western Kentucky University, and most recently a U.S. Commerce Department’s Economic Development Administration (EDA) grant for the Innovation and Commercialization Centers (ICC) incubators.  He said that WKC had received a $1.1 million dollar grant from the Tennessee Valley Authority, which was money from their power budget, not federal money. He said those monies would never be reflected on their financial report because those monies did not pass through the WKC account. 


Rep. Arnold asked if any companies ever contacted the Corporations looking for new sites or a new county in which to expand.  Mr. Jones responded that companies did contact them about new sites or new counties in which to expand. He said that most of their leads came from trade shows, trade journals, their website and direct mailing. He said very few leads came from the Economic Development Cabinet.


Mr. Zea stated that in regard to  Recommendation 1, the WKC would never issue a general obligation fund on behalf of the Corporation, although the Corporation had been looking at issuing revenue bonds. He said that WKC had five representatives from the area development districts on the Board. As to Recommendation 4, he stated that the bylaws would be corrected to reflect the executive committee membership. He also said that the Corporation agreed with Recommendations 5 and 6. Mr. Zea said that he also agreed with Recommendation 8 in that the Corporation was open to improving its means for measuring the effectiveness of their promotion efforts. He said that the means for measuring tourism was difficult. He stated that WKC was putting in place a program called Webtrans which would allow WKC to track the hits that the website receives. He said that the area of civil war and heritage terrorism were extremely popular sites on the web page.


Sen. Stine asked if the civil war website was advertised in the Civil War magazine. Mr. Zea stated that it was. 


Rep. Baugh asked why the West Kentucky Corporation would have some opposition to Recommendation 1 regarding bonding, and why would the Corporation do the bonding for universities and/or water projects.  Mr. Zea stated that some of the projects were unique in that a revenue stream could be developed. He said that the biomass project at Murray State University, and the ethanol project being developed by the Hopkinsville Grain Elevator could result in a commercialized venture creating a stream of revenue.


Rep. Baugh asked why WKC would be issuing bonds and not the entities who would ultimately be receiving the revenue.  Mr. Zea stated that WKC would issue the bonds since they would be considered a partner.  He said that by being a partner in those projects, then WKC would hope to make money off those ventures and then turn around and reinvest that money in the communities. 


Rep. Arnold asked what initiatives are involved in using the 611 money for tourism. 


Debby Spencer, Vice President, West Kentucky Corporation stated that her office was very active in promoting tourism. She said that their website, which contained over 1,700 pages highlighting events and places of interest in West Kentucky and Kentucky, had been receiving over 380,000 hits a month. She stated that WKC had partnered with the Department of Agriculture in developing a website for the agri-tourism initiatives. Ms. Spencer went on to summarize the tourism initiatives undertaken by the WKC.


The report and recommendations of the East and West Kentucky Corporations was approved by roll call vote upon motion made by Rep. Arnold and seconded by Sen. Stine.


Stacie Otto of the Program Review staff presented a follow-up to the Impact Plus: Design of Medicaid-Funded Program for Children with Severe Emotional Disturbance Results in Rapidly Growing Expenditures and Difficult Policy Choices study that had previously been approved by the Program Review and Investigations Committee in December 2001. She said that in addition to the written response of the Cabinet for Health Services regarding the implementation of the recommendations, it was noted that on May 21, 2002, a new emergency regulation was filed for the IMPACT Plus program, which tightened eligibility requirements, placed time limitations and restrictions on who would be able to access residential and foster care services, and standardized rates for all services. Ms. Otto stated that with the added component to the eligibility requirements, providers were claiming that children were being left without needed services resulting in unnecessary hospitalizations. (For a detailed description of the recommendations and the Cabinet For Health Services’ response on the implementation of the recommendations, please refer to the IMPACT Plus Study Follow-up, which can be found in the LRC Library file.)


Rep. Butler asked for the total number of children being served by IMPACT Plus. Ms. Otto stated that for Calendar Year 2001, there were 4,077 children being served.  She said that for Calendar Year 2002, it was estimated that approximately 4,100 children would be served.    


Rep. Butler asked what was the average cost per child.  Ms. Otto explained that in CY 2001 it was $6,458 and for CY 2002 it was projected to cost $7,610 per child. 


Rep. Butler asked how parents would go about selecting a case manager. Ms. Otto stated that once the child was determined eligible for services, then the parents/guardians would receive a letter  asking them to call the office to obtain a listing of providers.


Marcia Morgan, Secretary, Cabinet for Health Services, stated that when the Cabinet redesigned the Impact Plus program, it had to be done in phases.  She said the Cabinet had worked closely with the advocacy and provider communities in the redesign of the program, which was completed in May 2002. She stated that the changes associated with Phase I were not retroactively applied to children already in the program to the rates for services being provided to those children. Secretary Morgan stated that the eligibility requirements had been strengthened and were more in line with the original conception of the program.  She said that the Impact Plus program was designed to be short term, intensive treatment for children who were at risk for institutionalization.  She stated that the Cabinet redirected more of its focus on children who would improve with intensive treatment. She stated that the Cabinet had been able to preserve the Title V arrangement with the Department for Community Based Services; Department for Mental Health/Mental Retardation so parents would not have to forfeit guardianship in order to receive treatment services, which is important to the overall success of the program.  She said changes were made to the therapeutic foster care and group residential services, which were the most expensive component pieces.  She also stated that the program now imposes a six month requirement; a requirement for family involvement since a lot of the children come from dysfunctional homes, and there is now a prospective plan for home-based services.  She said that the Cabinet had eliminated the Wilderness Camp Service, a service not widely accessed. Rates that were previously negotiated with all providers were standardized although not retroactively applied.  She stated that the Cabinet had also added a clinician to the on-site review team, and that twenty-six site reviews had been conducted.  She also stated that corrective action plans had been implemented to insure compliance and to improve the quality of the services.  She said that training for the service coordinators had been enhanced and they are now focused on high quality services and compliance with regulations. Secretary Morgan stated that when the Impact Plus program was initiated, the annual expenditures were $3 million and in Fiscal Year 2001 the expenditures were $27.6 million. She said that the net budget target for Fiscal Year 2002 was $30 million, however, at the close of FY 2002, $32 million was spent for the both Medicaid and KCHIP eligible children. She stated that the Cabinet had seen eligibility increase dramatically in the Medicaid program during the calendar year. She said that according to an eligibility forecast done in January, the Cabinet felt like that there would be 25,000 additional TANF eligibles and over 4,000 additional foster care children in the Medicaid program. She also said that the Cabinet was expecting over 1,741 additional individuals in the other eligible categories and including the aged, blind and disabled, an additional 6,202 individuals over the January forecast. She said that overall, Medicaid eligibles were going up so the Impact Plus program could see some increases in the population. She stated that the July 2001 expenditures for the overall Medicaid program averaged $55 million on a weekly basis. She said that even after all the cost containments that had been initiated in Medicaid, the weekly cycle for the first quarter averaged approximately $65 million.  She said that Phase II of the redesign would explore the planned level of care for each individual child, and that the Cabinet would be looking for ways to increase provider accountability, which would evolve out of best practices approach.  She said that in addition, the Cabinet referred the Impact Plus report to the Children’s Committee work group of the House Bill 843 Commission.  Secretary Morgan said that the Cabinet was preparing a waiver for children with Pervasive Developmental Disorders (PDD) for submission to the Centers for Medicare and Medicaid Services.  She said that in order to make it a budget neutral situation to the Department, the Cabinet would have to cap the dollars available and then take the dollars that were spent on children with PDD in 2002, and reduce that from the Impact Plus budget and use that to fund the waiver.  She also said that the number of participants in the waiver program would also have to be capped.  She stated that 160 children with PDD received Impact Plus services totaling $2,079,053 in Fiscal Year 2002.  She said the Cabinet hoped to have the final waiver ready for submission to CMS by the end of October or the first of November. 


Rep. Baugh asked if the Impact Plus program only dealt with children who were Medicaid eligible.  Secretary Morgan stated that was correct.


Rep. Baugh asked what happened to children who were not Medicaid eligible who were removed from the custody of their parents either on a temporary or permanent basis.  Secretary Morgan stated that under the Medicaid program, the children would have to be Medicaid eligible.  She said that most children who were removed from custody of their parents, might fall in one of the several Medicaid eligible categories, therefore making them eligible for Impact Plus services. 


Rep. Baugh asked how many children in Kentucky were non-Medicaid eligible.  Secretary Morgan explained that there was a general fund program set up with the State InterAgency Council (SIAC), which was open to any one that was not Medicaid eligible.  She said she did not know how many children could benefit from these services.


Tricia Salyer, Director, Division of Medicaid Services for Mental Health/Mental Retardation, stated that the estimate would be approximately 5% of the population of children who would be at risk for a severe emotional disturbance.


Rep. Baugh asked if the Impact Plus program was successful in as far as saving the children, or turning the children around, or preventing further abuse. Secretary Morgan stated that Impact Plus was a program that provided services to children and helped children. She did not think the success of the program could be assessed by the amount of money spent.  She said there was no doubt that the program should have been managed better, but children were helped.  She said that in her opinion, the Impact Plus program was successful for children.


Rep. Baugh stated that in his opinion, the program did work and the program should continue to be funded. However he said he was concerned over the children who were not Medicaid eligible and unable to receive the same types of service.


Secretary Morgan stated that the Cabinet was concerned, but since the Medicaid budget was in a crisis, the Cabinet was striving to serve the people who were the most needy and those who had the most serious problems. 


Rep. Baugh stated that he was concerned about the growing number of people who were uninsured because of the cost of health insurance and who would not qualify for Medicaid.


Secretary Morgan stated that within the Department for Mental Health and Mental Retardation, there were programs for the non-Medicaid eligible.  She said that the Community Mental Health Centers have safety net funding that helps them address the uninsured or the underinsured in their communities.  She agreed that the program could use more money, but the Cabinet was focused on managing the programs with the dollars that they had. 


Rep. Baugh asked if the program covered mental retardation and behavioral problems that were not classified as mentally retarded.  Secretary Morgan stated that was correct. 


Sen. McGaha stated that as a former educator, he saw many students diagnosed and medicated for problems that did not exist, or else the behavioral problems were not addressed appropriately.  


Secretary Morgan stated that she agreed there was a problem.  She said that even with the site reviews along with a medical necessity determination, the Cabinet would still need to do quality assurance and address that issue.


Chairman Graham asked how much money had been budgeted for Impact Plus for the Calendar Year 2002. Secretary Morgan explained that there was never any money budgeted for the Impact Plus program.  She said that when the program was designed, it was supposed to be budget neutral.  She said the Cabinet had predicted that the Medicaid program would expend $35 million dollars on Impact Plus in Fiscal Year 2002.  She said that the program used Medicaid and KCHIP money amounting to $32 million dollars. 


Chairman Graham asked if the Cabinet had a budget for 2003. Secretary Morgan stated the budget target for 2003 was $30 million dollars. 


Chairman Graham asked if the Cabinet had guidelines in order to track the money. Secretary Morgan stated that the Program Review report had been very clear about setting up guidelines to track expenditures. She reminded the Committee that across the board, eligibles were up and utilization was up. She also said that at this time, she did not know if the program would have any savings, and they would be lucky to hit the target of $30 million.


Chairman Graham asked what type of results had come out of the outcomes based evaluations. Ms. Salyer stated that the outcome study had been implemented, and the results of that study would be a source for determining if children were getting better after being served in the Impact Plus program. She said that so far, the results showed that Impact Plus services  were beneficial to the children in the program.


Greg Hager, of Program Review staff, stated that the Performance-Based Budgeting: Concepts and Examples report that was adopted by the Committee last year, was an informational report and no recommendations were made. Since the adoption of  the report, the Office of the State Budget Director chose four state agencies as pilot programs under the provisions of the performance budgeting pilot project: Juvenile Justice, Program Operations; Forestry Program; Department for Vehicle Registration, Motor Carrier Program; and Governor’s Office for Technology’s Infrastructure Services Program.   He said that the State Budget Director had worked with those agencies in helping them prepare their performance budgeting information, which included all the documentation related to the current budget period.  He explained that $750,000 had been appropriated to implement the pilot program, and that the State Budget Director reported  that $262,672 had been expended.  He said that the remaining money was either included in the reduction orders or lapsed at the end of FY 2002. 


Chairman Graham asked what was the future of performance-based budgeting. Dr. Hager stated that it was too early to tell how it was going to work in Kentucky.  He said that the four pilot projects were just getting started in the process, and it would be at least a year before we would know if it had been a successful operation. 


Erin McNees, of Program Review staff, presented the study proposal for the review of the Commonwealth Accountability and Testing System (CATS) Writing Portfolios, and Failing Schools and Dropout Rates.  She said that staff would:  1) Provide a description of the Commonwealth Accountability Testing System;  2) Describe and evaluate the accountability measures used under CATS and other states’ testing systems; and 3) Describe and evaluate the scoring criteria for CATS writing portfolios (a copy of the study proposal can be found in the LRC Library file).


Dr. Hager stated that even though the evaluation of scoring criteria for CATS writing portfolios was the original study question, it was listed as Objective 3 because the other objectives were more general, and it would make the flow of the report better. 


Sen. Stine asked to include the following comments as amendments to the CATS study proposal:

She asked that the reference to the No Child Left Behind language be corrected to read that that states must assess students against “reading”, not English.

In Objective 1, she asked that staff compare increases in the CATS score to the increases in the ACT and SAT.  She also asked staff to look at the correlation between CATS scores and the standardized military test, Armed Services Vocational Aptitude Battery (ASVAB).

Under objective #2, 2.2A, she asked staff to see if it was appropriate for the State to be giving awards to schools that had dropout rates that were in fact higher than what the average state dropout rate was.  She said this question could be included in the survey of the administrators.

Sen. Stine also asked that under 2.2, staff include graduation rates.

She also stated that under 2.4, staff needed to find out if the CATS test had been judged valid as used in the No Child Left Behind federal language, and also had CATS been judged valid under the National Technical Advisory Panel on Assessment and Accountability’s (NTAPAA) analysis, and if not, why.

Sen. Stine asked that teachers be included in any interview or survey assessing opinions regarding the process of setting improvement goals and the consequences to schools that fail to improve.    

Sen. Stine stated that under Objection 3, 3.4,  she did not think that asking how other states grade the writing portfolio sections of their standardized tests was a valid question. 


Dr. Hager explained that the tests were referred to as standardized tests in order to distinguish it between a test where everything would be just writing an essay.  He said it was his opinion that writing portfolios, as understood in other states, could be considered standardized.  He stated that the goal of the study was to make sure that the grading of tests was standard. 


Sen. Stine stated that another question to be asked was whether or not teachers were teaching to the test as opposed to having a core body curriculum that they ordinarily taught.  She said it was her understanding that the same test questions were used year after year.


Dr. Hager stated that the question could be included on the survey, but he was concerned about the answers that would be received.  He said that if the survey asked people if they were teaching to the test,  he was confident that most people would not admit to doing that. He said that staff would try to address the issue somehow.


Sen. Stine stated that if it was determined that the same questions were being used year after year, then staff should find out what effect that had on the score increases.  She also asked staff to find out why new CTBS booklets were not being purchased and used.


Dr. Hager stated that staff would address those issues.


Sen. Stine asked if there had ever been an external audit of the scoring procedure. Ms. McNees stated that an audit of the portfolios were performed every summer.


Sen. McGaha asked staff to look at other states who have portfolios and determine the percentage of weight placed on portfolios.  He also asked that staff look at other states to see how implementing the No Child Left Behind Act will affect their testing programs.


Sen. McGaha also asked that staff examine the local level costs associated with  CATS testing and writing portfolios.


Dr. Hager stated that staff would look into the costs.


Sen. McGaha stated that he realized that some school districts did a better job than others at breaking down the costs, and in order to save time he would be willing to share survey information that had been obtained by a survey conducted during the last session. He asked that the confidentiality of the responses be preserved.


Dr. Hager stated that staff, as always, would preserve the confidentiality of the survey as well any other survey results.


Sen. McGaha asked staff to look at the dropout rates and to also do a comparison of graduation rates.  He wanted to know what happened to the children who dropped out. He also asked if the dropout rate was based on an annual number, year by year.


Dr. Hager stated that was correct. 


Sen. McGaha asked that staff compare the dropout rate from freshman who were in the 9th grade to the same students who would be seniors four years later.


Dr. Hager stated that staff would be certain to include that information in their report.


Sen. McGaha asked staff to see if there was a correlation between prepared writing (portfolios) and on demand writing, and to also to see if there was any consistency between the prepared writing ability and the non-prepared ability of a child to write. He also asked who actually provided the training and instructions on the scoring of the portfolios.


Dr. Hager stated that the training instructions were actually provided by the Kentucky Department of Education, and he said that staff would study the most current version of the training instructions. 


The Commonwealth Accountability and Testing System Writing Portfolios, Failing Schools and Dropout Rates study proposal, with amendments, was approved by voice vote upon motion made by Sen. Stine and seconded by Rep. Baugh.


Meeting adjourned.