STATE OFFICE OF RISK MANAGEMENT

PUBLIC MEETING ON

May 4, 2005

Board Members Martha Rider (Chair), Ronald Beals, Ronald Walenta, Ernest Garcia, and Kenneth Mitchell were present. Jonathan D. Bow, Executive Director, and Stephen Vollbrecht, General Counsel, were also in attendance.

Item 1. Chairman Rider called the public meeting to order at 10:35 a.m. on May 4, 2005. Chairman Rider recognized the members present and that a quorum was established.

Item 2. Chairman Rider introduced and welcomed a new Board member, Mr. Kenneth Mitchell, from El Paso. Mr. Mitchell replaced board member Gerald Lavey.

Item 3. Chairman Rider presented retiring Board member, Gerald Lavey, with a plaque thanking him for his service. Mr. Lavey gave a few words in appreciation.

Item 4. Board Member Beals moved for approval of the Minutes of the April 13, 2005 meeting. Board Member Walenta seconded the motion. Discussion. Board Member Garcia proposed amendment to Item 7. Approved minutes with the correction carried without objection (5-0 vote).

Item 5. Audit Plan Approval. Jonathan D. Bow, Executive Director, introduced Rupert and Associates. Darrell Rupert, Managing Director and Audit Partner, and Jaye Stepp, Audit Manager requested approval of the Fiscal Year 2005 internal audit plan and for the internal audit contract for Fiscal Year 2006. Ms. Stepp provided estimate details. Board Member Beals moved to accept audit. Board Member Garcia seconded the motion for discussion. Board Member Walenta asked for clarification. Mr. Bow and Mr. Rupert addressed questions from the Board. Motion carried without objection (5-0 vote). Chairman Rider appointed Board Member Garcia as the contact for audit.

Item 6. Internal Audit Contract Renewal. Chairman Rider asked for motion to renew contract. Board Member Beals moved to accept renewal of the contract as it is presented. Board Member Garcia seconded motion for discussion. Board Member Walenta questioned Rupert and Associates. Mr. Rupert fielded questions. Stephen Vollbrecht, General Counsel, gave clarification. Chairman Rider moved to vote which did not carry (0-5 vote). Board Member Garcia moved to send RFP (Request For Proposal) out and encouraged Rupert and Associates to submit. Board Member Walenta seconded motion. Board Member Walenta proposed to staff to send copy of the RFP to the Board 30 days before posting. Motion carried without objection (5-0 vote).

Item 7. Board Approval Prior to the Appeal of an Adverse Trial Court Decision to an Appeals Court. Stephen Vollbrecht, General Counsel, addressed previous questions brought to his attention regarding procedures regarding a Court of Appeals. Mr. Vollbrecht provided an overview of legal process and procedure. Board Member Walenta questioned staff on costs and case evaluation procedures. Staff addressed questions. No action taken by Board.

Item 8. Collection of State Insurance Purchasing Data. Sally Becker, Insurance Specialist, introduced how to enter a new policy. A short recess was called due to computer equipment, technical difficulties. Reconvened with the same quorum. Ms. Becker presented screens to enter new policies, how to view existing policies, and how to choose auto/property policies. Ms. Becker fielded questions from Board. No action taken by Board.

Item 10. Executive Director's Report. Jonathan D. Bow, Executive Director, presented updates to the Board on new employees, job vacancies, financial issues, and Texas Worker's Compensation Commission Compliance and Practice Audit. Mr. Bow and Mr. Vollbrecht answered questions from the Board.

Item 11. No Public Comment.

Item 12. Future meeting dates. Board Member Walenta moved the Board meet on June 8th and July 13th . No second. Board Member Beals moved to meet July 20th and August 17th . Chairman Rider set July 20th and August 17th as future tentative dates.

Item 13. Board Member Beals moved to adjourn meeting. Board Member Garcia seconded. Chairman Rider adjourned meeting.

I certify that the above minutes were approved by the State Office of Risk Management Board Members at the public meeting on June 28, 2005.