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HomeMy WebLinkAboutAEA Schedule of Expd of Federal Awards 06-30-2015-A ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Audit in Accordance with OMB Circular A-133 June 30, 2015 (With Independent Auditors’ Reports Thereon) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Table of Contents Page(s) Independent Auditors’ Report on Compliance for Each Major Program; Report on Internal Control over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 1–2 Schedule of Expenditures of Federal Awards 3 Notes to Schedule of Expenditures of Federal Awards 4–5 Schedule of Findings and Questioned Costs 6 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 7–8 Independent Auditors’ Report on Compliance for Each Major Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations The Board of Directors Alaska Energy Authority: Report on Compliance for Each Major Federal Program We have audited Alaska Energy Authority’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on Alaska Energy Authority’s major federal program for the year ended June 30, 2015. Alaska Energy Authority’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for Alaska Energy Authority’s major federal program based on our audit of the types of compliance requirements referred to above. 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 Alaska Energy 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 on compliance for the major federal program. However, our audit does not provide a legal determination of Alaska Energy Authority’s compliance. Opinion on the Major Federal Program In our opinion, Alaska Energy Authority complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2015. Report on Internal Control Over Compliance Management of Alaska Energy Authority is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and KPMG LLP Suite 600 701 West Eighth Avenue Anchorage, AK 99501 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity. 2 performing our audit of compliance, we considered Alaska Energy Authority’s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program 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 Alaska Energy Authority’s internal control over compliance. 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. 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 material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 We have audited the financial statements of Alaska Energy Authority as of and for the year ended June 30, 2015, and have issued our report thereon dated October 26, 2015, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements 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 financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditure of federal awards is fairly stated in all material respects in relation to the financial statements as a whole. October 26, 2015 3 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Expenditures of Federal Awards Year ended June 30, 2015 Catalog of federaldomesticFederal grantor/pass-through grantor assistance Award Federal grantor program title number amount expenditures U.S. Department of Energy: Direct – State Energy Program 81.041 $581,840 340,479 Direct – Alaska Wind Energy 81.087 1,585,652 69,856 Passed through Washington State University – Renewable Energy Research 81.117 40,000 25,569 Total U.S. Department of Energy 2,207,492 435,904 Denali Commission: Direct: Nunam Iqua Bulk Fuel Facility 90.100 2,700,000 432,419 St. George Power System Upgrade 90.100 2,100,000 103,087 Fort Yukon Power System Upgrade 90.100 340,000 (60) Emerging Energy Technology Fund (EETF) RivGen Power System Commercial Project 90.100 651,990 263,519 Tatitlek Bulk Fuel System 90.100 1,472,000 260,673 Shishmaref Bulk Fuel 90.100 2,517,778 4,192 Ruby Power System Upgrade 90.100 2,671,825 241,048 Port Heiden Bulk Fuel Facility 90.100 780,000 14,679 EETF BRI Cyclo-Turbine Energy Production 90.100 335,169 107,816 Emerging Energy Technology (Round 1)90.100 911,079 198,930 Yakutat Power System Upgrade Construction 90.100 3,205,514 687 FY08 Project Administration 90.100 1,762,717 157,035 EETF Application of Composite Flywheels 90.100 309,350 179,234 Perryville Rural Power System Upgrade 90.100 2,560,000 195,675 EETF Arctic Field Testing of the EO-25/12 Wind Turbine 90.100 102,359 13,438 EETF Oceana In-stream Hydrokinetic Device Evaluation 90.100 566,235 188,344 Twin Hills Power System Upgrade 90.100 150,000 46,026 Alternative Energy Proposal Review and Project Management 90.100 2,226,373 529,245 Igiugig Power System Upgrade 90.100 1,350,000 224,140 EETF Ultra-Efficient Generator and Diesel-Electric Prop 90.100 103,487 37,122 EETF Small Community Self-Regulating Grid 90.100 142,532 13,245 EETF Arctic Thermal Shutter and Doors 90.100 62,560 8,665 EETF Enhanced Condensation for Organic Rankine Cycle 90.100 76,380 24,320 EETF Cold Climate Heat Pump Demonstration 90.100 50,385 2,019 Akiak Power System Upgrade 90.100 2,000,000 303,689 EETF Safe and Efficient Exhaust Thimble 90.100 40,429 3,621 Emerging Energy Technology (Round 2)90.100 345,000 49,067 Nunam Iqua Rural Power System Upgrade 90.100 760,000 405,189 EETF Biomass Reforest for Boreal 90.100 20,700 4,564 Bulk Fuel Inventory Assessment 90.100 275,000 201,067 Kake Bulk Fuel Storage Upgrade 90.100 585,000 10,921 31,173,862 4,223,616 U.S. Department of Agriculture: Direct: Rural Development, Forestry, and Communities – Wood Energy Development 10.672 277,756 74,059 Total federal awards $33,659,110 4,733,579 See accompanying independent auditors’ report. ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Schedule of Expenditures of Federal Awards June 30, 2015 4 (Continued) (1) Basis of Presentation The Alaska Energy Authority’s (Authority’s) reporting entity is defined in note 1 to the Authority’s financial statements. The accompanying schedule of expenditures of federal awards (Schedule) includes the federal grant activity of the Authority under programs of the federal government for the year ended June 30, 2015. The information in this Schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Because the Schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Authority. (2) Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in note 2 to the Authority’s financial statements. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Schedule of Expenditures of Federal Awards June 30, 2015 5 (3) Subrecipients Of the federal expenditures on the Schedule, the Authority provided federal awards to subrecipients as follows: Denali Commission: Nunam Iqua Bulk Fuel Facility 432,419 St. George Power System Upgrade 102,814 Emerging Energy Technology Fund (EETF) RivGen Power System Commercial Project 263,519 Tatitlek Bulk Fuel System 244,844 Ruby Power System Upgrade 221,548 Port Heiden Bulk Fuel Facility 10,307 EETF BRI Cyclo-Turbine Energy Production 107,816 Yakutat Power System Upgrade Construction 687 EETF Application of Composite Flywheels 179,234 Perryville Rural Power System Upgrade 175,964 EETF Arctic Field Testing of the EO-25/12 Wind Turbine 13,438 EETF Oceana In-stream Hydrokinetic Device Evaluation 188,344 Twin Hills Power System Upgrade 45,002 Alternative Energy Proposal Review and Project Management 529,245 Igiugig Power System Upgrade 213,825 EETF Ultra-Efficient Generator and Diesel-Electric Prop 37,122 EETF Small Community Self-Regulating Grid 13,245 EETF Arctic Thermal Shutter and Doors 8,665 EETF Enhanced Condensation for Organic Rankine Cycle 24,320 EETF Cold Climate Heat Pump Demonstration 2,019 Akiak Power System Upgrade 297,031 EETF Safe and Efficient Exhaust Thimble 3,621 Nunam Iqua Rural Power System Upgrade 389,632 EETF Biomass Reforest for Boreal 4,564 Kake Bulk Fuel Storage Upgrade 10,135 Total Denali Commission 3,519,360 Total to subrecipients $3,519,360 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Findings and Questioned Costs June 30, 2015 6 (1) Summary of Auditors’ Results Financial Statements Type of auditors’ report issued: Unmodified Internal control over financial reporting:  Material weakness(es) identified? yes X no  Significant deficiency(ies) identified that are not considered to be material weakness(es)? Yes X none reported Noncompliance material to the financial statements noted? yes X no Federal Awards Internal control over major programs:  Material weakness(es) identified? yes X no  Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported Type of auditors’ report issued on compliance for major programs: Unmodified 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 #Name of federal program or cluster 90.100 Denali Commission Dollar threshold used to distinguish between type A and type B programs: $300,000 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. 7 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, in accordance with the 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, the financial statements of Alaska Energy Authority, which comprise the statement of net position as of June 30, 2015, and the related statements of revenues, expenses, and changes in net position and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated October 26, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Alaska Energy Authority’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Alaska Energy Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of Alaska Energy Authority’s internal control. A deficiency in internal control 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, 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. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Alaska Energy Authority’s financial statements are free from 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 Suite 600 701 West Eighth Avenue Anchorage, AK 99501 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity. 8 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Alaska Energy Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Alaska Energy Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. October 26, 2015