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02-40015-15

March 30, 2015
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SUMMARY OF: State of Alaska, Single Audit for the Fiscal Year Ended June 30, 2014

Purpose of the Report

This report summarizes our review of the State of Alaska’s basic financial statements and the State’s compliance with federal laws and regulations in the administration of approximately $3.1 billion of federal financial assistance programs. The audit was conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States. It also complies with the federal Single Audit Act Amendments of 1996 and the related United States Office of Management and Budget Circular A-133.

The report contains an opinion on the basic financial statements of the State of Alaska for FY 14, recommendations on financial and compliance matters, auditor’s reports on internal controls and compliance, the Schedule of Expenditures of Federal Awards, and the Summary of Prior Audit Findings.

Report Conclusions

The basic financial statements for the State of Alaska are fairly presented in accordance with accounting principles generally accepted in the United States of America without qualification, except for the Governmental Activities and General Fund financial statements which are qualified. We were unable to obtain sufficient appropriate audit evidence to support an opinion on the expenditures for Medicaid and Children’s Health Insurance Program services and related revenues as of June 30 2014. Medicaid information systems controls were not effective during the fiscal year ended June 30, 2014. (See Recommendation No. 2014-021.)

We were unable to obtain sufficient appropriate audit evidence to support the State of Alaska’s compliance with the Allowable Costs and Eligibility requirements applicable to the Medicaid Cluster and Children’s Health Insurance Program administered by the Department of Health and Social Services. (See Recommendation No. 2014-019.) Failure to comply with these compliance requirements resulted in a material weakness for Medicaid and the Children’s Health Insurance Program. The State has substantially complied with applicable laws and regulations in the administration of its other major federal financial assistance programs. The report does contain recommendations regarding significant deficiencies in the State’s internal control over financial statements and federal programs.

Findings and Recommendations

This report contains 43 recommendations, of which 17 are unresolved issues from last year. Three of the 43 recommendations are made to Alaska Housing Finance Corporation, one is made to the University of Alaska, and two are made to the Department of Environmental Conservation whose audits were performed by other auditors. Some of the recommendations made in this report require significant changes in procedures or a shifting of priorities, and therefore, may take more than one year to implement. The Summary Schedule of Prior Audit Findings in Section III identifies the current status of most prior audit recommendations not resolved by the release of the FY 14 statewide single audit.

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