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HomeMy WebLinkAboutState Grant Exp Audit 2002 CHUGA<; POWERING ALASKA’S FUTURE IE G E | VW E I) 2) Valor2 September 25, 2003 SEP 26 2003 '— ie (shes oe) Mr. Ronald W. Miller D\ copy to Banda A, ee AIDEA/AEA 5 Executive Director Cavern oF 4 199 /sc03} Alaska Industrial Development and Export Authority LeXvaaEs, 813 W. Northern Lights Blvd. Anchorage, AK 99503 Subject: Southern Intertie State Grant Expenditures Audit Dear Mr. Miller: Enclosed are three copies of Chugach Electric Association, Inc.’s “State Financial Assistance Reports for the year ended December 31, 2002”. This report is submitted in accordance with Section 5, “Audit Requirements”, of the Grant Administration Agreement dated August 30, 1994 for expenses incurred in connection with the Southern Intertie Project from the transmission intertie funds granted under SLA 1993. Please distribute copies as needed to the appropriate State departments. Very truly yours, CHUGACH ELEQTRIC ASSOCIATION, INC. MRC:amg Enclosures: 3 copies of Financial Assistance Reports, Year ended December 31, 2002 Xe: Lee Thibert, w/o Mike Massin, w/o Dora Gropp Kathy Harris Chugach Electric Association, Inc 5601 Minnesota Drive, P.O. Box 1 9519-6300 ¢ 5 Fax (907) 562 (800) 478-7494 om © info@c CHUGACH ELECTRIC ASSOCIATION, INC. State Financial Assistance Reports Year ended December 31, 2002 CHUGACH ELECTRIC ASSOCIATION, INC. Table of Contents Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with the State of Alaska Audit Guide and Compliance Supplement for State Single Audits Schedule of State Financial Assistance Notes to Schedule of State Financial Assistance Independent Auditors’ Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Page(s) we mana 701 West Eighth Avenue Suite 600 Anchorage, AK 99501 Independent Auditors’ Report on Compliance With Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance With the State of Alaska Audit Guide and Compliance Supplement for State Single Audits The Board of Directors Chugach Electric Association, Inc.: Compliance We have audited the compliance of Chugach Electric Association, Inc. (Association) with the types of compliance requirements described in the State of Alaska Audit Guide and Compliance Supplement for State Single Audits that are applicable to its major state program for the year ended December 31, 2002. The Association’s major state program is identified in the accompanying schedule of state financial assistance. Compliance with laws, regulations, contracts and grants, general requirements, and the specific requirements applicable to its major state program is the responsibility of the Association’s management. Our responsibility is to express an opinion on the Association’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits. Those standards and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state program occurred. An audit includes examining, on a test basis, evidence about the Association’s compliance with those requirements and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Association’s compliance with those requirements. In our opinion, the Association complied, in all material respects, with the requirements referred to above that are applicable to its major state program for the year ended December 31, 2002. Internal Control Over Compliance The management of the Association is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to state programs. In planning and performing our audit, we considered the Association’s internal control over compliance with requirements that could have a direct and material effect on a major state program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with the State of Alaska Audit Guide and Compliance Supplement for State Single Audits. s # a & KPMG LLP KPMG LLP a US. limited liability partnership, is a member of KPMG International, a Swiss association. KPI The Board of Directors Chguach Electric Association, Inc. Our consideration of internal control over compliance would not necessarily disclose all matters in internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants that would be material in relation to a major state program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving internal control over compliance and its operation that we consider to be material weaknesses. Schedule of State Financial Assistance We have audited the financial statements of the Association as of and for the year ended December 31, 2002, and have issued our report thereon dated March 11, 2003. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying Schedule of State Financial Assistance is presented for purposes of additional analysis as required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audits and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole. This report is intended solely for the information and use of the Board of Directors, management and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. KPMG LEP July 30, 2003 CHUGACH ELECTRIC ASSOCIATION, INC. Schedule of State Financial Assistance Year Ended December 31, 2002 Total expenditures Department of Administration: Direct: Southern Intertie Route Selection $ 492.545 Total State Expenditures $ 492,545 (1) (2) CHUGACH ELECTRIC ASSOCIATION, INC. Notes to Schedule of State Financial Assistance Year Ended December 31, 2002 General The accompanying Schedule of State Financial Assistance presents the activity of all state financial assistance programs of Chugach Electric Association, Inc. (Association). The Association’s reporting entity is defined in note | to the Association’s financial statements. State financial assistance received directly from state agencies is included on the schedule. Basis of Accounting The accompanying Schedule of State Financial Assistance is presented using the accrual basis of accounting, which is described in note | to the Association’s financial statements. mana 701 West Eighth Avenue Suite 600 Anchorage, AK 99501 Independent Auditors’ Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards The Board of Directors Chugach Electric Association, Inc.: We have audited the financial statements of the Chugach Electric Association, Inc. (Association) as of and for the year ended December 31, 2002, and have issued our report thereon dated March 11, 2003. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the Association’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Association’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. euee KPMG LLP KPMG LLP a US. limited liability partnership, is a member of KPMG International, a Swiss association MM Te The Board of Directors Chugach Electric Association, Inc. This report is intended solely for the information and use of the Board of Directors, management, and the state awarding agencies and pass through entities and is not intended to be and should not be used by anyone other than these specified parties. KPI LIP July 30, 2003