02-40025-25

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 $5.5 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 Uniform Guidance.

The report contains opinions on the basic financial statements of the State of Alaska for FY 24, findings and recommendations on financial and compliance matters, auditor’s reports on internal controls and compliance, the Schedule of Expenditures of Federal Awards, and the Summary Schedule of Prior Audit Findings.

Report Conclusions

The audit includes unmodified financial statement opinions on all opinion units except for Governmental Activities and Governmental Fund – General Fund, which were qualified due to the following: the Department of Health did not obtain a System and Organization Controls 1 Type 2 report covering controls over financial reporting of Medicaid payments processed by service organizations for FY 24. As a result, we have insufficient evidence to determine if Medicaid related financial activity is properly reported in the basic financial statements. During FY 24, the Medicaid Management Information System processed approximately $2.4 billion in General Fund expenditures and Governmental Activities expenses, resulting in approximately $1.8 billion in General Fund federal grants-in-aid and Governmental Activities Operating Grants and Contributions revenue, $221.8 million in General Fund accounts payable and accrued liabilities, and $166.1 million in General Fund due from other governments.

The State has substantially complied with the applicable laws and regulations in the administration of its major federal financial assistance programs, except for the Pandemic Electronic Benefit Transfer Food Benefits program, the Supplemental Nutrition Assistance program cluster, the Fish and Wildlife cluster, the Coronavirus State and Local Fiscal Recovery Funds, the Education Stabilization Fund, the Temporary Assistance for Needy Families program, the Children’s Health Insurance program, the Medicaid cluster, and the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program.

The report does contain findings regarding material weaknesses and significant deficiencies in the State’s internal control over financial reporting and internal control over federal compliance.

Findings and Recommendations

This report contains 85 findings, of which 25 are unresolved issues from the prior year. Some of the recommendations made in this report require significant changes in procedures, additional resources, 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 prior financial and federal program related audit findings not resolved as of June 30, 2024.