SUMMARY OF: State of Alaska, Single Audit for the Fiscal Year Ended June 30, 2007.

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 $2.64 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.

The report contains an opinion on the basic financial statement of the State of Alaska for fiscal year 2007, 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.

No draw from the Constitutional Budget Reserve Fund (CBRF) was authorized for FY 07. At the end of FY 07 over $416 million was swept from a variety of General Fund sub-funds and accounts, and transferred to the CBRF.

The State has substantially complied with the applicable laws and regulations in the administration of its 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; none of the recommendations are considered material weaknesses.

Findings and Recommendations

This report contains 20 recommendations, of which seven are unresolved issues from last year. Also, two of the recommendations are made to component units: both recommendations for the University of Alaska 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.