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HomeMy WebLinkAboutAEA Audit in Accordance with OMB Circular A-133 Year ended June 30, 2010ALASKA ENERGY AUTEKORITY (A Component Unit of the State of Alaska) Audit in Accordance with OMB Circular A-133 Year ended Jiine 36, 2010 (With Independent Auditors” Report Thereon) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Table of Contents Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Program, Internal Control over Compliance, and Supplementary Schedule of Expenditures of Federal Awards in Accordance with OMB Circular A-133 Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Page(s) 1-2 3 4-5 6 7-8 KPMG LLP Suite 600 701 West Eighth Avenue Anchorage, AK 99501 Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Program, Internal Control over Compliance, and Supplementary Schedule of Expenditures of Federal Awards in Accordance with OMB Circular A-133 The Board of Directors Alaska Energy Authority: Compliance We have audited the compliance of the Alaska Energy Authority (the Authority) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2010. The Authority’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the Authority’s management. Our responsibility is to express an opinion on the Authority’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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 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 federal program occurred. An audit includes examining, on a test basis, evidence about the Authority’s compliance with those requirements and performing such other procedures as we considered 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 Authority’s compliance with those requirements. In our opinion, the Authority complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2010. Internal Control over Compliance Management of the Authority is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Authority’s internal control over compliance with the requirements that could have a direct and material effect on a major federal 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 OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over compliance. KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ("KPMG International”), a Swiss entity. mana A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal Awards We have audited the financial statements of the Alaska Energy Authority (a Component Unit of the State of Alaska) as of and for the year ended June 30, 2010, and have issued our report thereon dated October 28, 2010. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the board of directors, management, federal 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 LEP October 28, 2010 tw ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Expenditures of Federal Awards Year ended June 30, 2010 Catalog of federal domestic Federal grantor/pass-through grantor assistance Award Federal grantor program title number amount expenditures U.S. Department of Energy: Direct: Alaska Wind Energy 81.087 3,072,410 372,106 Passed through Washington State University - Renewable Energy Research 81.087 45,000 41,262 3,117,410 613,368 Geothermal Outreach 81.117 122,000 9.476 NREL LAM 81.117 24,943 24,157 146,943 33,633 Chenega Bay Rural Power System Upgrade 81.122 337,100 121,360 Passed through Alaska Housing Finance Corporation - ARRA - Energy Efficiency Conservation Block Grant 81.128 7,531,100 118,829 Passed through Alaska Housing Finance Corporation — ARRA - State Energy Program — Energy Conservation 81.041 3,732,000 1344 Passed through Alaska Housing Finance Corporation ~ State Energy Program — Energy Conservation 81.041 88,000 88,000 Passed through Washington State University — SEP Energy Conservation 81.041 2,367 2,367 3,822,367 91711 Denali Commission: Direct: Bulk Fuel Consolidation Upgrades and Power Generators 90.100 42,304,866 1,380,041 Bulk Fuel Consolidation Upgrades. 90.100 3,991,328 412,991 Bulk Fuel Consolidation and Power Generator Upgrades 90.100 21,555,255 3,948,456 Alternative Energy Proposal Review and Project Management 90.100 3,090,000 381,279 Angoon Power System Upgrade 90.100 840,000 283,880 Kwethluk Power System Upgrade 90.100 3,000,000 1,536,170 Ouzinkie Power System Upgrade 90.100 200,000 24,863 FY08 Project Administration 90.100 585,881 370,668 Pelican Hydro Upgrade 90.100 2,274,000 1,045,065 Napakiak Power System Upgrade 90.100 850,000 320,375 Tuluksak Bulk Fuel Upgrade 90.100 120,000 39,091 Repair and Replacement 90.100 225,000 55,903 Napakiak Bulk Fuel and Bulk Power 90.100 150,000 7,622 Ekwok Bulk Fuel Design and Bulk Power 90.100 150,000 90,574 Chitina Power System Upgrade 90.100 940,000 458,591 Takotna Power System Upgrade 90.100 950,000 53,298 Napakiak Intertie 90.100 150,000 4,782 Ruby Power System Upgrade 90.100 120,000 27,945 Remote Monitoring and Metering 90.100 153,000 63,191 Nikolai Power System Upgrade 90.100 150,000 1,681 Village End Use Efficiency Measures 90.100 180,000 158,190 Unalakleet Power System Upgrade 90.100 3,500,000 982,180 Tazimina Hydroelectric 90.100 1,273,543 585,155 Kipnuk Power System Upgrade 90.100 400,000 206,072 2010 Rural Energy Conference 90.100 25,000 19,153 Passed through the State of Alaska Department of Labor ~ Operator Training 90.100 261,000 203,508 87,438,873 12,660,724 USS. Department of Agriculture: Direct: RUS Napakiak Tline 10.859 2,915,228 24,029 RUS Elfin Cove Power System Upgrade 10.859 1,178,490 99,424 RUS Levelock Power System Upgrade 10.859 2,637,831 866,710 6,731,549 990,163 National Petroleum Reserve: Passed through the State of Alaska — Power Cost Equalization 15.227 199.601 — U.S. Environmental Protection Agency Direct EPA AK Fish Oil Biodiesel 66.034 200,000 9.481 Passed Through State of Alaska Department of Environmental Conservation Organic Rankine 66,040 79,972 23,212 Total Federal Awards 109,604,915 14,662,481 See accompanying independent auditors’ report ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Schedule of Expenditures of Federal Awards Year ended June 30, 2010 (1) General The accompanying schedule of expenditures of federal awards presents the activity of all federal financial assistance programs of the Alaska Energy Authority (Authority). The Authority’s reporting entity is defined in note 1 to the Authority’s financial statements. Federal financial assistance received directly from federal agencies as well as federal financial assistance passed through other government agencies is included on the schedule. (2) Basis of Accounting The accompanying schedule of federal financial assistance is presented using the accrual basis of accounting, which is described in note 2 to the Authority’s financial statements. 4 (Continued) (3) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Schedule of Expenditures of Federal Awards Year ended June 30, 2010 Subrecipients The Authority provided the following to subrecipients during the year ended June 30, U.S. Department of Energy: Chenega Bay Power System Upgrade Alaska Wind Energy Denali Commission: Bulk Fuel Consolidation Upgrade and Power Generator Bulk Fuel Consolidation Upgrades Bulk Fuel Consolidation and Power Generator Upgrades Alternative Energy Proposal Review and Project Management Angoon Power System Upgrade Kwethluk Power System Upgrade Ouzinkie Power System Upgrade Pelican Hydro Upgrade Napakiak Power System Upgrade Chitina Power System Upgrade Takotna Power System Upgrade Village End Use Efficiency Measures Unalakleet Power System Upgrade Tazi mina Hydroelectric Kipnuk Power System Upgrade Rural Energy Conference U.S. Department of Agriculture: RUS Elfin Cove Power System Upgrade RUS Levelock Power System Upgrade Total to subrecipients 2010: $ 121,360 548,012 669,372 619,712 390,352 3,245,640 365,601 225,942 1,406,150 17,855 1,034,531 195,260 416,318 2,519 153,130 808,785 544,470 182,533 IRAE: 9,627,951 94,717 806,078 900,795 $ 11,198,118 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Findings and Questioned Costs Year ended June 30, 2010 (1) Summary of Auditors’ Results Financial Statements: Type of auditors' report issued Unqualified Internal control over financial reporting: Material weakness(es) identified? yes Xx no Significant deficiency(ies) identified that are not considered to be material weakness(es)? yes x none reported Noncompliance material to financial statements noted? yes X no Federal Awards: Internal control over major programs: Material weakness(es) identified? yes Xx no Significant deficiency(ies) identified that are not considered to be material weakness(es)? yes x none reported Type of auditors’ report issued on compliance for major programs Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A~133? yes X no Identification of major programs: CFDA Numbers Name of Federal Program or Cluster 90.100 Denali Commission 81.128 Energy Efficiency Conservation Block Grant Dollar threshold used to distinguish between Type A and Type B programs: $ 439,874 Auditee qualified as low-risk auditee? X yes no (2) There were no findings relating to the financial statements reported in accordance with Government Auditing Standards. (3) There were no findings or questioned costs relating to federal awards. KPMG LLP Suite 600 701 West Eighth Avenue Anchorage, AK 99501 Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Board of Directors Alaska Energy Authority: We have audited the financial statements of the Alaska Energy Authority (the Authority) as of and for the year ended June 30, 2010, and have issued our report thereon dated October 28, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the Authority’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over financial reporting. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, 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 or other matters that are required to be reported under Government Auditing Standards. 7 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity. mana This report is intended solely for the information and use of the board of directors, management, federal 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 October 28, 2010