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HomeMy WebLinkAboutState Financial Assit Audit 1999 CHUGA<: POWERING ALASKA’S FUTURE VE | } 0 (MQ {Ef June 12, 2000 IP? E G E | JUN 15 299 cUU > Alaska Industrial Development Mr. Randy Simmons and Export Authority Executive Director ee Alaska Industrial Development and Export Authority Lo\ Sis 480 West Tudor Road Anchorage, Alaska 99503 Fk ac Shauna Subject: Southern Intertie State Grant Expenditures, Audit Dear Mr. Simmons: Enclosed are three copies of Chugach Electric Association’s “State Financial Assistance Reports, Year ended December 31, 1999” and one copy of “Financial Statements, December 31, 1999 and 1998”. The reports are 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. Sincerely, alle pureeea I General Manager Mth a ahw Enclosures: 3 copies of Financial Assistance Reports, Year ended December 31, 1999. 1 copy of Financial Statement, December 31, 1999 and 1998. c Lee Thibert, w/o Mike Massin, w/o Mike Cunningham Kathy Harris W.0.#E9590081, Sec., 2.2.1.1 RF Chiaach F : Chugach Electric Association, Inc 5601 Minnesota Drive, P.O. Box 196300, Anck e, Alaska ) 563-7494 Fax (907) 562-0027 © (800) 478-7494 CHUGACH ELECTRIC ASSOCIATION, INC. State Financial Assistance Reports Year ended December 31, 1999 CHUGACH ELECTRIC ASSOCIATION, INC. Table of Contents Page(s) Independent Auditors’ Report on Schedule of State Financial Assistance 1 Schedule of State Financial Assistance ?) Notes to Schedule of State Financial Assistance 8 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 4 Independent Auditors’ Report on Compliance for a State Single Audit 5 Independent Auditors’ Report on the Internal Control Structure for a State Single Audit 6-7 Baa 601 West Fifth Avenue Suite 700 Anchorage, AK 99501-2258 Independent Auditors’ Report on Schedule of State Financial Assistance The Board of Directors Chugach Electric Association, Inc.: We have audited the financial statements of the Chugach Electric Association, Inc. (Chugach) as of and for the year ended December 31, 1999, and have issued our report thereon dated February 25, 2000. These financial statements are the responsibility of Chugach’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was made for the purpose of forming an opinion on the financial statements of Chugach Electric Association, Inc. taken as a whole. The accompanying Schedule of State Financial Assistance is presented for purposes of additional analysis and is not a required part of the basic financial statements. The information in the schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly presented, in all material respects in relation to the financial statements taken as a whole. KPIIc LEP February 25, 2000 CHUGACH ELECTRIC ASSOCIATION, INC. Schedule of State Financial Assistance Year Ended December 31, 1999 Deferred Grant cash Interest Total allowable Deferred Grant revenue receipts receipts expenditures revenue Name of award award Jan. 1, 1999 during year during year during year Dec. 31, 1999 Department of Administration: Direct: Southern Intertie Route Selection $ 48,000,000 (86,656) 985,191 19,246 599,719 (491,374) CHUGACH ELECTRIC ASSOCIATION, INC. Notes to Schedule of State Financial Assistance Year Ended December 31, 1999 General The accompanying Schedule of State Financial Assistance presents the activity of all state financial assistance programs of Chugach. Chugach’s reporting entity is defined in note 1 to Chugach’s financial statements. State financial assistance received directly from state agencies as well as state financial assistance passed through other government 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 Chugach’s financial statements. Deferred Revenue at December 31, 1999 Deferred revenue at December 31, 1999 included amounts received from the State of Alaska in excess of amounts expended, amounts payable from the program’s restricted cash account to Chugach’s general cash account and accrued expenditures. Raa 601 West Fifth Avenue Suite 700 Anchorage, AK 99501-2258 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 The Board of Directors Chugach Electric Association, Inc.: We have audited the financial statements of Chugach Electric Association, Inc. (Chugach) as of and for the year ended December 31, 1999, and have issued our report thereon dated February 25, 2000. 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. As part of obtaining reasonable assurance about whether Chugach’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. In planning and performing our audit, we considered Chugach’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 over financial reporting 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. This report is intended solely for the information and use of Chugach’s Board of Directors, management and state awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. KPI LIP February 25, 2000 Bana 601 West Fifth Avenue Suite 700 Anchorage, AK 99501-2258 Independent Auditors’ Report on Compliance for a State Single Audit The Board of Directors Chugach Electric Association, Inc.: We have audited the financial statements of the Chugach Electric Association, Inc. (Chugach) as of and for the year ended December 31, 1999, and have issued our report thereon dated February 25, 2000. As part of obtaining reasonable assurance about whether the financial statements and the major state assistance program are free of material misstatement, we have applied procedures to test Chugach’s compliance with certain provisions of laws and regulations and with the general requirements applicable to its state financial assistance programs and the specific requirements that are applicable to its major state financial assistance program, which is identified in the accompanying schedule of state financial assistance, for the year ended December 31, 1999. The management of Chugach is responsible for Chugach’s compliance with those requirements. Our responsibility is to express an opinion on compliance with those provisions and requirements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, 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 audit guide require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about Chugach’s compliance with those provisions and requirements. We believe that our audit provides a reasonable basis for our opinion. In our opinion, Chugach complied, in all material respects, with the provisions of laws and regulations and the applicable general requirements governing its state financial assistance program and with the specific requirements that are applicable to its major state financial assistance program for the year ended December 31, 1999. This report is intended solely for the information and use of Chugach’s Board of Directors, management and state awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. KPMG LEP February 25, 2000 Aaa 601 West Fifth Avenue Suite 700 Anchorage, AK 99501-2258 Independent Auditors’ Report on the Internal Control Structure for a State Single Audit The Board of Directors Chugach Electric Association, Inc.: We have audited the financial statements of Chugach Electric Association, Inc. (Chugach) as of and for the year ended December 31, 1999, and have issued our report thereon dated February 25, 2000. We have also audited Chugach’s compliance with general requirements and specific requirements applicable to the major state financial assistance program and have issued our report thereon dated February 25, 2000. We conducted our audits in accordance with generally accepted auditing standards, 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 audit guide require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether Chugach complied with laws and regulations, noncompliance with which would be material to a major state financial assistance program. The management of Chugach is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management’s authorization with generally accepted accounting principles, and that state financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projections of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. In planning and performing our audit of the financial statements of Chugach for the year ended December 31, 1999, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and on compliance with general requirements and requirements applicable to major state financial assistance programs and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. The Board of Directors Chugach Electric Association, Inc. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that (1) errors or irregularities in amounts that would be material in relation to the financial statements being audited or (2) noncompliance with laws and regulations that would be material to the state programs 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 structure and its operation that we consider to be material weaknesses as defined above. This report is intended solely for the information and use of Chugach’s Board of Directors, management and state awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. KPMG LIP February 25, 2000