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HomeMy WebLinkAboutAEA Federal Single Audit for FY16 2016-A This report was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee. Alaska Energy Authority (A Component Unit of the State of Alaska) Federal Single Audit Report Year Ended June 30, 2016 (With Independent Auditor’s Reports Thereon) Alaska Energy Authority (A Component Unit of the State of Alaska) Federal Single Audit Report Year Ended June 30, 2016 (With Independent Auditor’s Reports Thereon) Alaska Energy Authority (A Component Unit of the State of Alaska) Contents Page Single Audit Section Independent Auditor’s 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 1-2 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 3-5 Schedule of Expenditures of Federal Awards 6 Note to Schedule of Expenditures of Federal Awards 7 Schedule of Findings and Questioned Costs 8 1 BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 3601 C Street, Suite 600 Anchorage, AK 99503 Tel: 907-278-8878 Fax: 907-278-5779 www.bdo.com Independent Auditor’s 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 Board of Directors Alaska Energy Authority Anchorage, Alaska 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 the governmental activities, the business-type activities and each major fund of Alaska Energy Authority, a component unit of the State of Alaska, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Alaska Energy Authority’s basic financial statements, and have issued our report thereon dated October 28, 2016. 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. 2 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. 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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Anchorage, Alaska October 28, 2016 BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 3 3601 C Street, Suite 600 Anchorage, AK 99503 Tel: 907-278-8878 Fax: 907-278-5779 www.bdo.com Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Board of Directors Alaska Energy Authority Anchorage, Alaska 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 Compliance Supplement that could have a direct and material effect on each of Alaska Energy Authority’s major federal programs for the year ended June 30, 2016. Alaska Energy Authority’s major federal programs are 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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of Alaska Energy Authority’s major federal programs 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 each major federal program. However, our audit does not provide a legal determination of Alaska Energy Authority’s compliance. 4 Opinion on Each 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 each of its major federal programs for the year ended June 30, 2016. 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 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 each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, 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 Uniform Guidance. Accordingly, this report is not suitable for any other purpose. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 5 3601 C Street, Suite 600 Anchorage, AK 99503 Tel: 907-278-8878 Fax: 907-278-5779 www.bdo.com Report on Schedule of Expenditures of Federal Awards Required by Uniform Guidance We have audited the financial statements of Alaska Energy Authority as of and for the year ended June 30, 2016 and have issued our report thereon dated October 28, 2016 which contained unmodified opinions 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, as required by Uniform Guidance is presented for purposes of additional analysis, 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 expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole. Anchorage, Alaska October 28, 2016 6 Pass-Through Passed Total Federal Entity Total Through to Federal CFDA Identifying Grant Subre-Expen- Number Number Award cipients ditures Department of Agriculture Wood Utilization Assistance - direct 10.674 478,631$ -$ 64,519$ Biomass System Performance Grant - direct 10.UNKNOWN 10,000 - 87 Total Department of Agriculture - 64,606 Environmental Protection Agency State Clean Diesel Grant Program - direct 66.040 221,728 - 221,728 Department of Energy State Energy Program - direct 81.041 300,560 - 254,603 Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and Technical Analysis/Assistance Passed through Washington State University 81.117 40,000 - 25,467 Direct 81.117 600,000 - 153,135 Total CFDA 81.117 - 178,602 Total Department of Energy - 433,205 Denali Commission Direct: Alternative Energy Request for Proposals and Project Management 90.100 2,226,373 80,747 80,747 FY08 Project Administration 90.100 1,762,717 - 115,355 Ruby RPSU Exp 90.100 - - (1,040) Emerging Energy Technology Grant Fund 90.100 911,079 - 136,131 Akiak RPSU Construction 90.100 2,000,000 411,385 413,053 St. George Rural Power System Upgrade 90.100 2,100,000 31 30 Shishmaref Bulk Fuel Upgrade 90.100 2,517,778 70,413 84,919 Nunam Iqua RPSU 90.100 760,000 281,279 295,065 EETF Cold Climate Heat Pump Demonstration 90.100 50,385 6,459 6,459 EETF Biomass Reforestation for Boreal Forests 90.100 20,700 4,024 4,024 EETF Enhancement Condensation for Organic Rankine Cycle 90.100 76,300 10,304 10,304 EETF Wind-Diesel Battery Hybrid for Kwigillingok 90.100 471,845 83,442 83,442 EETF RivGen Power System Commercialization Project 90.100 651,990 7,218 7,218 EETF Oceana In-stream Hydro Device 90.100 566,235 193,118 193,118 EETF Small Community Self-Regulating Grid 90.100 142,532 59,415 59,415 Tatitlek Bulk Fuel System 90.100 1,472,000 80,002 105,976 Koliganek RPSU 90.100 3,225,200 73,520 73,520 Bulk Fuel Inventory Assessment 90.100 320,750 - 81,012 Port Heiden Bulk Fuel Facility 90.100 780,000 701,319 731,461 Kake Bulk Fuel Storage Upgrade 90.100 585,000 37,406 44,132 Emerging Energy Tech Data Collection 90.100 345,000 - 106,729 Perryville RPSU 90.100 2,560,000 869,567 1,004,986 Chalkytsik Bulk Fuel Facility Design 90.100 257,500 - 1,867 Total Denali Commission 2,969,649 3,637,923 Total Expenditures of Federal Awards 2,969,649$ 4,357,462$ See accompanying independent auditor's report and notes to schedules of expenditures of federal awards Federal Grantor/Pass-Through Grantor/Program or Cluster Title Alaska Energy Authority (A component Unit of the State of Alaska) Schedule of Expenditures of Federal Awards for the Year Ended June 30, 2016 Alaska Energy Authority Note to Schedule of Expenditures of Federal Awards Year Ended June 30, 2016 7 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of Alaska Energy Authority under programs of the federal government for the year ended June 30, 2016. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Alaska Energy Authority, it is not intended to and does not present the financial position, changes in net position, or cash flows of Alaska Energy Authority. Note 2. Summary of Significant Accounting policies Expenditures reported on the Schedule are reported on the full accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A- 87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditure 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. Note 3. Indirect Cost Rate The Authority has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Alaska Energy Authority Corrective Action Plan Year Ended June 30, 2016 8 Section I - Summary of Auditor’s Results Financial Statements Type of auditor’s report issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X (none reported) Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major federal programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X (none reported) Type of auditor’s report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? yes X no Identification of major federal programs: CFDA Number Name of Federal Program or Cluster Agency 90.100 Denali Commission Program Denali Commission Dollar threshold used to distinguish between type A and type B programs: $ 750,000 Auditee qualified as low-risk auditee? X yes no Section II - Financial Statement Findings Required to be Reported in Accordance with Government Auditing Standards There were no findings related to the financial statements which are required to be reported in accordance with the standards applicable to financial audits contained in Government Auditing Standards. Section III - Federal Award Findings and Questioned Costs There were no findings and questioned costs for federal awards (as defined in 2 CFR 200.516(a)) that are required to be reported.