SUMMARY OF: State of Alaska, Single Audit for the Fiscal Year Ended June 30, 2002

Purpose and Scope 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 over $2 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 Circular A-133 issued by the U.S. Office of Management and Budget.

Report Conclusions

For FY 02, the State of Alaska implemented Governmental Accounting Standards Board Statement No. 34 – Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments as required. Due to this, the presentation is vastly different from prior years and includes statements that present the State of Alaska’s financial position and FY 02 financial activities on a government-wide perspective. For the first time, 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.

During FY 02, $884 million was transferred from the Constitutional Budget Reserve Fund (CBRF) to the General Fund in accordance with Chapter 61, SLA 2001, section 93(b) to fund the State’s FY 02 shortfall between revenues and general fund appropriations. Other significant transactions between the General Fund and the CBRF during this fiscal year included $101.9 million returned from the CBRF to the General Fund after being swept at the end of FY 01, and $130.7 million being swept from a variety of General Fund sub-funds and accounts, then transferred to the CBRF in FY 02.

Additionally, the State has complied with the applicable laws and regulations in the administration of its major federal financial assistance programs, except for allowable costs requirement for the Bryne Formula Grant program in the Department of Law and the Department of Public Safety and reporting requirements for the Child Care Cluster in the Department of Education and Early Development.

Findings and Recommendations

This report contains 47 recommendations, of which 10 were presented last year. Many 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 IV identifies the current status of prior audit recommendations.