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HomeMy WebLinkAboutAEA Audit in Accordance with OMB Circular A-133 Year ended June 30, 2009ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Audit in Accordance with OMB Circular A-133 Year ended June 30, 2009 (With Independent Auditors’ Report Tnereon) 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 and on Internal Control over Compliance 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 KPMG LLP Suite 600 701 West Eighth Avenue Anchorage, AK 99501 Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 The Board of Directors Alaska Energy Authority (A Component Unit of the State of Alaska): Compliance We have audited the compliance of the Alaska Energy Authority, a Component Unit of the State of Alaska, (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, 2009. 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, 2009. Internal Control over Compliance The 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, 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, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. nana A control deficiency in an entity’s internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity’s internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the entity’s internal control that might be 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 basic financial statements of the Authority as of and for the year ended June 30, 2009, and have issued our report thereon dated October 23, 2009. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. 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. KPMG LEP October 23, 2009 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Expenditures of Federal Awards Year ended June 30, 2009 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 Wood Biomass 81.079 180,722 3,152 Alaska Wind Energy 81.087 2,772,940 41,706 Geothermal Outreach 81.117 122,000 26,358 Nome Diesel Generator Upgrade 81.122 950,000 9,991 Chenega Bay Power System Upgrade 81.122 379,000 215,741 Total direct 4,404,662 296,948 Passed through the State of Alaska: State Energy Program - Energy Conservation 81.041 125,000 125,000 Passed through Washington State University Washington State Univ-SEP Northwest CHP Application Center 81.041 35,000 5,006 Total U.S. Department of Energy 4,564,662 426,954 Commissior Direct: Bulk Fuel Consolidation Upgrades and Power Generation 90.100 104,315,408 137,376 Bulk Fuel Consolidation Upgrades and Power Generation - 2005 and beyond 90.100 42,304,866 2,697,801 Bulk Fuel Consolidation Upgrades 90.100, 3,991,328 639,141 Kwethluk Barge Landing Design 90.100, 201,415 30,705 Bulk Fuel Consolidation and Power Generation Upgrades 90.100 21,485,255 9,205,688 Alternative Energy Proposal Review and Project Management 90.100 3,090,000 227,370 Kwethluk Barge Landing and Road Extension Design 90.100 143,415 35,177 2008 Rural Energy Conference 90.100 36,585 33,719 St. George High Penet Wind Diesel 90.100 1,000,000 = Angoon Power System Upgrade 90.100 840,000 556,120 Kwethluk Power System Upgrade 90.100 3,100,000 422,444 Ouzinkie Power System Upgrade 90.100 200,000 169,231 DC Project Administration 90.100 350,520 31,473 Pelican Hydro Upgrade 90.100 2,274,000 274,301 Napakiak Power System Upgrade 90.100 ‘850,000 527,432 Tuluksak Bulk Fuel Tank Farm Upgrade 90.100 120,000 24,489 Repair & Replacement 90,100 225,000 48,007 Napakiak Bulk Fuel Farm Upgrade 90.100. 150,000 137,702 Ekwok Bulk Fuel Design & Upgrade 90.100, 150,000 51,506 Chitina Power System Upgrade 90.100 940,000 358,952 Takotna Power System Upgrade 90.100 950,000 2,724 Napakiak Intertie 90.100 2,850,000 145,092 Ruby Power System Upgrade 90.100 120,000 1 Remote Monitoring & Metering 90.100 153,000 27,002 Nikolai Power System Upgrade 90.100 150,000 186 Village End Use Efficiency Measures 90.100 180,000 16,810 Anchorage School District End Use Efficiency Measures 90.100 147,840 132,172 Total direct 190,318,632 15,932,621 Passed through the State of Alaska: Bulk Fuel Tank, Utility, Power Plant, Hydro Power Plant Operator Training 90.100 273,308 273,009 Total Denali Commission 190,591,940, 16,205,630 U.S, Department of Interior: Passed through the State of Alaska: Remote Monitoring 15.615 24,674 24,674 USS. Environmental Protection Agency: EPA AK Fish Oil Biodiesel 66.034 200,000 12,454 EPA -TIPS Feasibility 66,202 1,450,800 468,763 Total direct 1,650,800 481,217 Passed through the State of Alaska: Organic Rankine 66.040 35,000 18,467, Total U.S. Environmental Protection Agency 1,705,800 499,684 U.S. Department of Agriculture: RUS Napakiak Transmission Line 10.859 2,915,228 2,590,986 RUS Elfin Cove Power System Upgrade 10.859 1,178,490 103,919 RUS Levelock Power System Upgrade 10.859 2,637,831 1,139,472 Total direct 6,731,549 3,834,377 Passed through the State of Alaska: University of Alaska Modular Fish Oil 10.001 10,391 125 Total U.S, Department of Agriculture 6,741,940 3,834,502 Total federal awards S$ ___ 203,629,016 20,991,444 See accompanying notes to schedule of expenditures of federal awards. (1) (2) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Schedule of Expenditures of Federal Awards Year ended June 30, 2009 General The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of 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. Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards is presented using the accrual basis of accounting, which is described in note 2 to the Authority’s financial statements. ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Schedule of Expenditures of Federal Awards Year ended June 30, 2009 (3) Subrecipients The Authority provided the following to subrecipients during the year ended June 30, 2009: US. Department of Energy: Nome Diesel Generator Upgrade $ 10,000 Chenega Bay Power System Upgrade 215,740 225,740 Denali Commission: Bulk Fuel Consolidation Upgrades and Power Generation 33,490 Bulk Fuel Consolidation Upgrades and Power Generation — 2005 and beyond Legislative Energy Project 1,958,084 Bulk Fuel Consolidation Upgrades 603,048 Bulk Fuel Consolidation and Power System Upgrades 8,178,250 Alternative Energy Proposal Review and Project Management 210,477 Angoon Power System Uprade 497,344 Kwethluk Power System Upgrade 422,444 Ouzinki Power System Upgrade 120,828 Pelican Hydro Upgrade 274,301 Napakiak Power System Upgrade 340,530 Chitna Power System Upgrade 345,906 Village End Use Efficiency Measures 14,737 Anchorage School District End Use Efficiency Measures 1325172 13,131,611 US. Environmental Protection Agency: EPA — TIPS Feasibility 459,965 US. Department of Agriculture: RUS Napakiak Transmission Line 14,047 RUS Elfin Cove Power System Upgrade 94,646 RUS Levelock Power System Upgrade 1,131,527 1,240,220 $15,057,536 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Federal Financial Assistance Report Schedule of Findings and Questioned Costs Year ended June 30, 2009 (1) Summary of Auditors’ Results Financial Statements Type of auditors’ report issued Unqualified Internal control over financial reporting: e Material weakness(es) identified? yes X__ no e 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: e Material weakness(es) identified? yes X_ no e 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 Circular A-133? yes X no Identification of major programs: CFDA Number Name of Federal Program or Cluster 90.100 Denali Commission 10.859 U.S. Department of Agriculture Dollar threshold used to distinguish between Type A and Type B programs: $ 629,189 Auditee qualified as low-risk auditee? X___ yes no 6 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Federal Financial Assistance Report Schedule of Findings and Questioned Costs Year ended June 30, 2009 (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 (A Component Unit of the State of Alaska) We have audited the financial statements of the Alaska Energy Authority as of and for the year ended June 30, 2009, and have issued our report thereon dated October 23, 2009. 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. KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. This report is intended solely for the information and use of management, the board of directors, 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. KPa, LIP October 23, 2009