Corrective Action Plans

Finding 1208545 (2025-032)

Material Weakness 2025

State of Alaska

AK

Subrecipient Monitoring § 200.1 § 200.303 § 200.521

Finding: 2025-032 - DMVA management did not issue a management decision for a finding relating to one Disaster Grants subrecipient’ s single audit. Questioned Costs: None Assistance Listing Number: 97.036 Assistance Listing Title: Disaster Grants Views of Responsible Officials (state whether your ag...

Finding: 2025-032 - DMVA management did not issue a management decision for a finding relating to one Disaster Grants subrecipient’ s single audit. Questioned Costs: None Assistance Listing Number: 97.036 Assistance Listing Title: Disaster Grants Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree. briefly explain why): DMVA concurs with the finding. Corrective Action (corrective action planned): DMVA acknowledges the importance of issuing timely and adequate management decisions to ensure subrecipients take corrective action. Due to a misunderstanding in the guidance provided, DMVA failed to issue the required management decision. The management letter has since been issued to the subrecipient. Internal procedures were updated in fiscal year 2025 to eliminate a single point of failure in this requirement. The Administrative Director, in conjunction with the Finance Officer, will assess the strengthened internal procedures to ensure they meet requirements. Completion Date (list anticipated completion date): 06/30/2026 Agency Contact (name of person responsible for corrective action): Bob Ernisse, Pamela Wiederspohn

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Finding 1208542 (2025-056)

Material Weakness 2025

State of Alaska

AK

Allowable Costs / Cost Principles Eligibility

Finding: 2025-056 - Sixty Medicaid and sixty CHIP recipients were randomly selected for eligibility testing. Testing revealed the following errors: Medicaid five of 60 cases lacked eligibility determination issues (note, some case had multiple deficiencies): • One of sixty case files lacked the prop...

Finding: 2025-056 - Sixty Medicaid and sixty CHIP recipients were randomly selected for eligibility testing. Testing revealed the following errors: Medicaid five of 60 cases lacked eligibility determination issues (note, some case had multiple deficiencies): • One of sixty case files lacked the proper case notes to properly maintain how the individual was determined eligible for payments. • One of sixty cases had an incorrect social security number entered into the ARIES system. In addition: • Five of sixty files lacked documentation of facts supporting the eligibility determination. • One of sixty participants did not meet income eligibility requirements. • Two of sixty cases lacked documentation to verify that the Income and Eligibility Verification System (IEVS) was used to verify income eligibility. CHIP 17 of 60 cases lacked eligibility: determination issues, (note, some case had multiple deficiencies). • One of sixty case files was missing a: CHIP-specific application that was signed of by the program recipient. • Three of the sixty identified cases had identified income that exceeded income limits or income was unable to be verified. • Four of sixty cases lacked documentation to verify that the Income and Eligibility Verification System was used, to verify income eligibi1ity. • Three of sixty cases were not properly closed after the period of eligibility to receive benefits had ended. • Four of sixty cases that had payments to programs participants that were deemed unallowable costs activities due to-multiple individual compliance issues. • Sixteen of sixty cases lacked adequate support for eligibility determinations/redeterminations. Questioned Costs: AL 93.778: 138 (known questioned costs); 37,006,989 (likely questioned costs), AL 93.767: 288 (known questioned costs); 582,269 (likely questioned costs) Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Assistance Listing Title: CHIP Medicaid Cluster Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding but does not concur with the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS’ Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q. Corrective Action (corrective action planned): The Division of Public Assistance will continue to perform case reviews and will randomly sample eligibility determinations to identify error trends and improve training opportunities. Case reviews that specifically target income and case documentation will be performed. The division will broadly message case documentation expectations as well as review in individual office meetings. The division will analyze its case documentation protocols and update them as necessary to ensure all relevant documentation supporting eligibility decisions are present in electronic case files. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2027. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

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Finding 1208541 (2025-055)

Material Weakness 2025

State of Alaska

AK

Eligibility Material Weakness

Finding: 2025-055 - Sixty Medicaid and sixty Children’s Health Insurance Program (CHIP) recipients were randomly selected for eligibility testing. Testing revealed the following errors: Medicaid 14 of 60 cases had timing issues (note, some cases had multiple deficiencies): • Seven of the sixty cases...

Finding: 2025-055 - Sixty Medicaid and sixty Children’s Health Insurance Program (CHIP) recipients were randomly selected for eligibility testing. Testing revealed the following errors: Medicaid 14 of 60 cases had timing issues (note, some cases had multiple deficiencies): • Seven of the sixty cases had not gone through a renewal assessment within 12 months of the last determination. • Eleven of the sixty cases’ eligibility determinations were not done timely (i.e., within 45 days). CHIP 26 of 60 cases had timing issues (note, some cases had multiple deficiencies): • Fifteen of sixty cases’ eligibility determinations were not done timely (i.e., within 45 days). • Eighteen of sixty cases had not gone through a renewal assessment within 12 months of the last determination. Questioned Costs: AL 93.778: 2,653 (known questioned costs); 712,969,620 (likely questioned costs), AL 93.767: 2,825 (known questioned costs); 5,719,575 (likely questioned costs) Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Assistance Listing Title: CHIP Medicaid Cluster Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding but does not concur with the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS’ Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q. Corrective Action (corrective action planned): The Division of Public Assistance continues engaging with contractors to incorporate system upgrades to improve timeliness and accuracy with Medicaid determinations. The division will provide additional eligibility resources to ensure timely review of Medicaid cases. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2027. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

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Finding 1208534 (2025-071)

Material Weakness 2025

State of Alaska

AK

Allowable Costs / Cost Principles Special Tests & Provisions § 200.403 § 200.404

Finding No. 2025-071 - Deficiencies were identified in the Office of Children’s Services FY25 foster care base rate setting methodology. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DFCS disagrees with this fin...

Finding No. 2025-071 - Deficiencies were identified in the Office of Children’s Services FY25 foster care base rate setting methodology. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DFCS disagrees with this finding. DFCS evaluated two foster care base rate proposals using the established Hornsby Zeller Methodology. The first option applied the traditional methodology and the second followed the same structure but incorporated Urban West regional expenditure data, which includes Alaska and eleven other western states as well as Hawaii. This change was implemented because Urban West data more accurately reflects Alaska’s high cost of living environment, whereas reliance on national averages has historically produced rates below Alaska’s true cost of care. Both options were reviewed with departmental legal counsel, who were involved in the original settlement, division leadership and the Commissioner’s Office. DFCS advanced the second option, resulting in an approximate 3000 increase to foster care base rate stipends effective July 1,2025. DFCS disagrees with the conclusion that the cost-of-living (inflation) factor should be adjusted to include inflation from 2016 forward. When the 2018 Foster Care Base Rates were established, inflation up to that point was already incorporated into the rate calculation. The current rate-setting process correctly used the 2018 rates as the baseline, which already accounted for prior inflation. Adding inflation from 2016 again would result in double-counting. DFCS disagrees with the conclusion that the rate-setting process did not follow the Hornsby Zeller methodology. The methodology was followed in full. As part of the rate analysis, DFCS applied the national average cost-of-living factor as outlined; however, the resulting amount did not adequately meet the needs of the children under the care and responsibility of the Department. DFCS is fiduciarily required to ensure that rates are sufficient to meet the actual needs of children in out-of-home care, and the national average input did not satisfy that obligation. To ensure the methodology produced accurate and appropriate results, DFCS utilized the Urban West index, an allowable and geographically relevant data source under the methodology. This adjustment did not change the methodology itself it refined the underlying input to better reflect Alaska’s actual cost of living and support the intended purpose of the rate-setting process. Corrective Action (corrective action planned): DFCS will continue to consult with legal counsel regarding any future methodology changes and will follow all guidance provided. Completion Date (list anticipated completion date): DFCS considers this matter resolved. Agency Contact (name of person responsible for corrective action): Nancy Miller, Finance Officer

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Finding 1208533 (2025-070)

Material Weakness 2025

State of Alaska

AK

Allowable Costs / Cost Principles Student Financial Aid Eligibility

Finding No. 2025-070 - An evaluation of the Office of Children’s Services (OCS) Online Resources for the Children of Alaska (ORCA) system controls identified an internal control weakness. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree,...

Finding No. 2025-070 - An evaluation of the Office of Children’s Services (OCS) Online Resources for the Children of Alaska (ORCA) system controls identified an internal control weakness. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DFCS agrees with the finding. Corrective Action (corrective action planned): OCS will be making modifications to the ORCA system that will automatically deactivate any user who has not logged in within 30 days during the ORCA update on 4 16 2026. Completion Date (list anticipated completion date): DFCS anticipates the finding will be resolved in FY2026. Agency Contact (name of person responsible for corrective action): Nancy Miller, Finance Officer

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Finding 1208532 (2025-054)

Material Weakness 2025

State of Alaska

AK

Special Tests & Provisions Significant Deficiency

Finding: 2025-054 - Per the 2025 Office of Management and Budget Compliance Supplement, if the state agency determines that an individual is not cooperating in regards to establishing paternity or related to a support order, “the TANF agency must (1) deduct an amount equal to not less than 25 percen...

Finding: 2025-054 - Per the 2025 Office of Management and Budget Compliance Supplement, if the state agency determines that an individual is not cooperating in regards to establishing paternity or related to a support order, “the TANF agency must (1) deduct an amount equal to not less than 25 percent from the TANF assistance that would otherwise be provided to the family of the individual, and (2) may deny the family any TANF assistance.” Questioned Costs: 4,650 (known questioned costs) Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): The Division of Public Assistance will present refresher training for child support cooperation protocols. The division will continue performing case reviews and randomly sample determinations to support staff eligibility determinations and to identify error trends and training opportunities. Case reviews that specifically target case documentation will be performed. The division will broadly message case documentation expectations as well as review those expectations in individual office meetings. The division will analyze its case documentation protocols and update them as necessary to ensure all relevant documentation supporting eligibility decisions are present in electronic case files. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2026. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

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Finding 1208531 (2025-053)

Material Weakness 2025

State of Alaska

AK

Reporting Internal Control / Segregation of Duties

Finding: 2025-053 - The State could not provide evidence that the FFY 24 ACF-204 annual report and two ACF-196R quarterly reports were completed or submitted to the federal agency. Questioned Costs: None Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Responsible Officials ...

Finding: 2025-053 - The State could not provide evidence that the FFY 24 ACF-204 annual report and two ACF-196R quarterly reports were completed or submitted to the federal agency. Questioned Costs: None Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): The Division of Public Assistance has hired an accountant dedicated to reviewing financial ACF reports, including the ACF- 1 96R, to ensure accuracy and timely finalization. Written procedures will be finalized to document roles and responsibilities, review and approval processes, submission timelines, and the retention of supporting documentation. The procedures will strengthen coordination between finance and program staff and further improve internal controls over federal reporting. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2026. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

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Finding 1208530 (2025-052)

Material Weakness 2025

State of Alaska

AK

Matching / Level of Effort / Earmarking Special Tests & Provisions Reporting

Finding: 2025-052 - Sixteen of the sixty cases tested had insufficient documentation to verify work hours which resulted in these work activities being reported inaccurately in the ACF- 199 report. Questioned Costs: None Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Respo...

Finding: 2025-052 - Sixteen of the sixty cases tested had insufficient documentation to verify work hours which resulted in these work activities being reported inaccurately in the ACF- 199 report. Questioned Costs: None Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): The Division of Public Assistance will continue to perform case reviews and meet with applicable staff to go over results and offer training and coaching as needed. The division will incorporate targeted reviews that focus on work hour verification and documentation. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2027. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

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Finding 1208529 (2025-051)

Material Weakness 2025

State of Alaska

AK

Eligibility Subrecipient Monitoring Significant Deficiency

Finding: 2025-051 - Five of sixty Temporary Assistance for Needy Families (TANF) recipient case files - tested lacked adequate documentation to indicate that the participant met all eligibility criteria. The following errors were noted: • One case had the monthly benefit the individual calculated in...

Finding: 2025-051 - Five of sixty Temporary Assistance for Needy Families (TANF) recipient case files - tested lacked adequate documentation to indicate that the participant met all eligibility criteria. The following errors were noted: • One case had the monthly benefit the individual calculated incorrectly causing an underpayment to the individual. • One case lacked documentation to verify if an 18 year old was attending high school and expected graduation date. • Three cases did not contain a child support cooperation form that assigns to the State the rights the family member may have for support from any other person. Questioned Costs: 3,702 (known questioned costs); 759,673 (likely questioned costs) Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): The Division of Public Assistance will continue to perform case reviews and will randomly sample eligibility determinations to identify error trends and improve training opportunities. The division will present refresher training for child support cooperation protocols. Case reviews that specifically target income and case documentation will be performed. The division will broadly message case documentation expectations as well as review those expectations in individual office meetings. The division will analyze its case documentation protocols and update them as necessary to ensure all relevant documentation supporting eligibility decisions are present in electronic case files. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2027. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

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Finding 1208528 (2025-023)

Material Weakness 2025

State of Alaska

AK

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles § 200.303

Finding: 2025-023 - The Coordinated Early Intervening Services budgets for two Local Education Agencies exceeded the allowable federal limit. Questioned Costs: None Assistance Listing Number: 84.027, 84.173 Assistance Listing Title: Special Education Cluster Views of Responsible Officials (state whe...

Finding: 2025-023 - The Coordinated Early Intervening Services budgets for two Local Education Agencies exceeded the allowable federal limit. Questioned Costs: None Assistance Listing Number: 84.027, 84.173 Assistance Listing Title: Special Education Cluster Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with Finding 2025-023. Corrective Action (corrective action planned): DEED is awaiting guidance from the U.S. Department of Education (U.S. ED) to determine what action should be taken to correct the FY2025 issue. The GMS controls have been updated for FY2026 to prevent the issue from recurring. Completion Date (list anticipated completion date): Unknown dependent on U.S.ED Agency Contact (name of person responsible for corrective action): Deborah Riddle, Division Operations Manager, Division of Innovation & Education Excellence

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Finding 1208526 (2025-060)

Material Weakness 2025

State of Alaska

AK

Subrecipient Monitoring Procurement, Suspension & Debarment Reporting § 200.303

Finding: 2025-060 - DEC did not fully comply with Federal Funding Accountability and Transparency Act reporting requirements applicable to FY 25 Congressionally Mandated Projects subawards. Questioned Costs: None Assistance Listing Number: 66.202 Assistance Listing Title: CMP Views of Responsible Of...

Finding: 2025-060 - DEC did not fully comply with Federal Funding Accountability and Transparency Act reporting requirements applicable to FY 25 Congressionally Mandated Projects subawards. Questioned Costs: None Assistance Listing Number: 66.202 Assistance Listing Title: CMP Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DEC agrees with the finding 2025-060. The errors and omissions were due to staff turnover, limitations of the legacy FSRS.gov reporting system, and insufficient review procedures. The FSRS platform allowed only one user per grant and lacked visibility for other staff, which contributed to reliance on PDF backups without timestamps. The incorrect subaward action dates were due to insufficient review procedures during the migration to the new and unfamiliar SAM.gov platform. DEC acknowledges the need for stronger internal controls and improved processes. Corrective Action (corrective action planned): DEC has taken steps to address the issues identified in the FFATA reporting process. To strengthen internal controls, DEC has further enhanced its existing written procedure by incorporating a visual verification checklist to ensure all data entry fields are accurate and submissions are complete. Staff have been trained on the new SAM.gov reporting and verification process to reduce the risk of errors. DEC will also implement a secondary review by verifying data entry directly in Sam.gov rather than relying on the PDF reports. As a final level of review the agency will conduct random audits on a sample of reports to verify compliance. Completion Date (list anticipated completion date): February 27, 2026. Agency Contact (name of person responsible for corrective action): Myra Pugh, Division of Water Administrative Operations Manager

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Finding 1208525 (2025-059)

Material Weakness 2025

State of Alaska

AK

Reporting Internal Control / Segregation of Duties § 200.303 § 200.328

Finding: 2025-059 - Unliquidated obligations as reported in two of three tested SF-425 Federal Financial Reports were inaccurate. Questioned Costs: None Assistance Listing Number: 66.202 Assistance Listing Title: Congressionally Mandated Projects (CMP) Views of Responsible Officials (state whether y...

Finding: 2025-059 - Unliquidated obligations as reported in two of three tested SF-425 Federal Financial Reports were inaccurate. Questioned Costs: None Assistance Listing Number: 66.202 Assistance Listing Title: Congressionally Mandated Projects (CMP) Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DEC agrees with the finding 2025-059. The department has established procedures and supervisory reviews in place for the preparation and submission of SF-425 Federal Financial Reports. The reporting errors identified relate to 2024 reporting activity and resulted from a misapplied filter within the encumbrance pivot tables, which caused State appropriations to be included in the federal share of unliquidated obligations. Corrective Action (corrective action planned): Revised reports were submitted to the EPA on December 26, 2025. To prevent future errors, DEC will reinforce existing SF-425 preparation procedures by documenting required report logic, including validation of pivot table filters and exclusion of State appropriations from federal reporting. Procedures will require confirmation that only the federal share of unliquidated obligations is included prior to submission. The department will also provide refresher guidance and targeted training for staff responsible for SF-425 preparation, including proper use of encumbrance tabs, pivot tables, and filters. This will ensure continuity of established procedures and reduce reliance on manual assumptions. Completion Date (list anticipated completion date): March 31, 2026 Agency Contact (name of person responsible for corrective action): Christina McCoskey, DEC Finance Officer

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Finding 1208524 (2025-028)

Material Weakness 2025

State of Alaska

AK

Allowable Costs / Cost Principles § 200.303 § 200.430

Finding: 2025-028 - One of 10 employee timesheets tested did not support the charges billed to the Congressionally Mandated Projects (CMP) program. Questioned Costs: 2,273 Assistance Listing Number: 66.202 Assistance Listing Title: CMP Views of Responsible Officials (state whether your agency agrees...

Finding: 2025-028 - One of 10 employee timesheets tested did not support the charges billed to the Congressionally Mandated Projects (CMP) program. Questioned Costs: 2,273 Assistance Listing Number: 66.202 Assistance Listing Title: CMP Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding. Corrective Action (corrective action planned): This finding has been corrected. The Division of Community and Regional Affairs (DCRA) and the Division of Administrative Services (DAS) have reviewed and updated timesheet processing functions in DCRA. DAS has provided information and training to DCRA timekeepers and management staff on timesheet entry, timekeeping procedures, and time entry and review processes in the accounting system. Both DCRA and DAS management will continue to monitor time entry and timesheet processing to ensure that time is entered accurately. Completion Date (list anticipated completion date): I The corrective action plan was fully implemented on January 31, 2026. Agency Contact (name of person responsible for corrective action): Nichole Tham, Division Operations Manager, Division of Community and Regional Affairs.

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Finding 1208523 (2025-013)

Material Weakness 2025

State of Alaska

AK

Special Tests & Provisions Material Weakness Internal Control / Segregation of Duties

Finding: 2025-013 - In FY 25, AKSASP did not consistently conduct required utilization reviews for donated property to ensure the property was being used in compliance with the terms and conditions of the donation. Questioned Costs: None Assistance Listing Number: 39.003 Assistance Listing Title: Do...

Finding: 2025-013 - In FY 25, AKSASP did not consistently conduct required utilization reviews for donated property to ensure the property was being used in compliance with the terms and conditions of the donation. Questioned Costs: None Assistance Listing Number: 39.003 Assistance Listing Title: Donation of Federal Surplus Personal Property Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): SSOA/OPPM, State Property Office agrees with this finding Corrective Action (corrective action planned): As a part of the new monthly review process mentioned above (finding 2025-010), all completed compliance reviews will be reviewed for accuracy and compliance with federal requirements by the State Property Manager and the results compared to reports produced by AssetWorks, the state’s federal property system of record. In addition, The State Property Office will also conduct internal staff training on internal controls prior to the end of the calendar year. Completion Date (list anticipated completion date): The new utilization compliance review process has been implemented as of September 30, 2025, internal staff training was completed in December 2025. Agency Contact (name of person responsible for corrective action): I Jonathon Harshfield State of Alaska Property Manager

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Finding 1208522 (2025-012)

Material Weakness 2025

State of Alaska

AK

Special Tests & Provisions Material Weakness Equipment & Real Property Management

Finding: 2025-012 - AKSASP staff did not conduct an annual inventory of federal surplus personal property. Questioned Costs: None Assistance Listing Number: 39.003 Assistance Listing Title: Donation of Federal Surplus Personal Property Views of Responsible Officials (state whether your agency agrees...

Finding: 2025-012 - AKSASP staff did not conduct an annual inventory of federal surplus personal property. Questioned Costs: None Assistance Listing Number: 39.003 Assistance Listing Title: Donation of Federal Surplus Personal Property Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): SSOA/OPPM, State Property Office agrees with this finding Corrective Action (corrective action planned): To ensure the annual inventory of federal surplus property is completed timely, the State Property Office will shut down operations from 1 September to 15 September annually to conduct a full inventory as rolling inventories do not meet the requirements. Completion Date (list anticipated completion date): The state property office will close from September 1, 2026, to September 15, 2026, to complete the required federal inventory by the required due date of September 30, 2026. Agency Contact (name of person responsible for corrective action): Jonathon Harshfield State of Alaska Property Manager

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Finding 1208521 (2025-011)

Material Weakness 2025

State of Alaska

AK

Reporting Internal Control / Segregation of Duties Significant Deficiency § 200.303

Finding: 2025-011 - Alaska State Agency for Surplus Property (AKSASP) lacked internal controls for the preparation and submission of the quarterly General Services Administration 3040 State Agency Monthly Donation Report of Surplus Personal Property. Questioned Costs: None Assistance Listing Number:...

Finding: 2025-011 - Alaska State Agency for Surplus Property (AKSASP) lacked internal controls for the preparation and submission of the quarterly General Services Administration 3040 State Agency Monthly Donation Report of Surplus Personal Property. Questioned Costs: None Assistance Listing Number: 39.003 Assistance Listing Title: Donation of Federal Surplus Personal Property Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): SSOA/OPPM, State Property Office agrees with this finding Corrective Action (corrective action planned): The State Property Office has implemented a procedure that will ensure all GSA reports are reviewed for accuracy prior to submission by the State Property Manager. The reviewer will initial the report prior to it being filed. In addition, The State Property Office conducted internal staff training on the updated internal control procedures in December 2025. Completion Date (list anticipated completion date): The new GSA Report review process was implemented on September 30, 2025, internal staff training was completed in December 2025, with the State Plan of Operations also being updated. Agency Contact (name of person responsible for corrective action): Jonathon Harshfield State of Alaska Property Manager

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Finding 1208520 (2025-010)

Material Weakness 2025

State of Alaska

AK

Eligibility Significant Deficiency § 200.303

Finding: 2025-010 - Internal controls to ensure applicants were eligible to receive donations of federal surplus personal property were not consistently applied. Questioned Costs: None Assistance Listing Number: 39.003 Assistance Listing Title: Donation of Federal Surplus Personal Property Views of ...

Finding: 2025-010 - Internal controls to ensure applicants were eligible to receive donations of federal surplus personal property were not consistently applied. Questioned Costs: None Assistance Listing Number: 39.003 Assistance Listing Title: Donation of Federal Surplus Personal Property Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): SSOA/OPPM, State Property Office agrees with this finding Corrective Action (corrective action planned): The State Property Office has implemented a two-step process with a monthly review to help ensure compliance with this requirement. The State Property Office also conducted internal staff training on the updated internal control procedures in December 2025. Completion Date (list anticipated completion date): The two-step review process was implemented September 30, 2025, internal staff training was completed in December 2025, with the State Plan of Operations also being updated. Agency Contact (name of person responsible for corrective action): Jonathon Harshfield State of Alaska Property Manager

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Finding 1208519 (2025-027)

Material Weakness 2025

State of Alaska

AK

Reporting Internal Control / Segregation of Duties Subrecipient Monitoring § 200.303

Finding: 2025-027 - For two of two CCPF 2025 Quarterly Obligations and Expenditure Reports reviewed, key line items for current period obligation and current period expenditures were inaccurate, and actual square footage of completed projects was unsupported. Questioned Costs: None Assistance Listin...

Finding: 2025-027 - For two of two CCPF 2025 Quarterly Obligations and Expenditure Reports reviewed, key line items for current period obligation and current period expenditures were inaccurate, and actual square footage of completed projects was unsupported. Questioned Costs: None Assistance Listing Number: 21.029 Assistance Listing Title: CCPF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding. Corrective Action (corrective action planned): The department will review obligation and expenditure totals for all CCPF quarterly reporting periods and submit necessary corrections in the 2025 Q4 CCPF Financial and Performance Report. DCCED verified subrecipients actual completed project square footages and will include these figures in the 2025 Q4 CCPF Performance Report. Completion Date (list anticipated completion date): This finding was corrected in the Q4 2025 CCP Financial and Performance Report, submitted on January 30, 2026. Agency Contact (name of person responsible for corrective action): Kevin Bartley, Grants Administration Manager, Division of Community and Regional Affairs.

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Finding 1208518 (2025-026)

Material Weakness 2025

State of Alaska

AK

Reporting Internal Control / Segregation of Duties Subrecipient Monitoring § 200.303

Finding: 2025-026 - During FY 25, DCCED did not have procedures for the preparation and submission of reports under the Federal Funding Accountability and Transparency Act for Coronavirus Capital Projects Fund (CCPF) subrecipients. Questioned Costs: None Assistance Listing Number: 21.029 Assistance ...

Finding: 2025-026 - During FY 25, DCCED did not have procedures for the preparation and submission of reports under the Federal Funding Accountability and Transparency Act for Coronavirus Capital Projects Fund (CCPF) subrecipients. Questioned Costs: None Assistance Listing Number: 21.029 Assistance Listing Title: CCPF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding. Corrective Action (corrective action planned): The Division of Community and Regional Affairs will draft FFATA reporting procedures. Completion Date (list anticipated completion date): This corrective action plan was completed on December 15, 2025. Agency Contact (name of person responsible for corrective action): Kevin Bartley, Grants Administration Manager, Division of Community and Regional Affairs.

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Finding 1208517 (2025-068)

Material Weakness 2025

State of Alaska

AK

Allowable Costs / Cost Principles § 200.303 § 200.430

Single Audit Finding No. 2025-068 - For two out of 40 timesheets tested (five percent), the employees’ hours were inaccurately recorded in the State’s accounting system. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain w...

Single Audit Finding No. 2025-068 - For two out of 40 timesheets tested (five percent), the employees’ hours were inaccurately recorded in the State’s accounting system. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): I The department agrees with this finding and recommendation. Corrective Action (corrective action planned): Department management will implement additional training for time collectors and payroll entry staff and strengthen the review process to ensure the accuracy of timesheet entry moving forward. Completion Date (list anticipated completion date): June 30, 2026 Agency Contact (name of person responsible for corrective action): Shanna Burns, Human Resources Consultant 5

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Finding 1208516 (2025-067)

Material Weakness 2025

State of Alaska

AK

Reporting Internal Control / Segregation of Duties Special Tests & Provisions § 200.303

Single Audit Finding No. 2025-067 - DOTPF’s statewide value engineering (VE) coordinator omitted one project with a VE analysis in the FFY 2025 annual VE summary report submitted to the Federal Highway Administration (FHWA). Views of Responsible Officials (state whether your agency agrees or disagre...

Single Audit Finding No. 2025-067 - DOTPF’s statewide value engineering (VE) coordinator omitted one project with a VE analysis in the FFY 2025 annual VE summary report submitted to the Federal Highway Administration (FHWA). Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding and recommendation. Corrective Action (corrective action planned): The department has implemented additional controls and training necessary to ensure compliance. Current procedures have proven adequate as demonstrated during the audit period, but adherence to procedures for reporting necessitates additional training. Completion Date (list anticipated completion date): June 30, 2026 Agency Contact (name of person responsible for corrective action): Michael White, Financial Services Manager

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Finding 1208515 (2025-066)

Material Weakness 2025

State of Alaska

AK

Internal Control / Segregation of Duties Special Tests & Provisions Subrecipient Monitoring § 200.303 § 200.318

Single Audit Finding No. 2025-066 - Contractor certified payrolls for four of 11 construction projects tested were not submitted during FY25. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees w...

Single Audit Finding No. 2025-066 - Contractor certified payrolls for four of 11 construction projects tested were not submitted during FY25. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding and recommendation. Corrective Action (corrective action planned): The department will implement measures to follow up with contractors and document attempts to contact businesses. Management will provide additional staff training regarding processes and procedures to ensure that the department is following up with due diligence. Completion Date (list anticipated completion date): December 31, 2026 Agency Contact (name of person responsible for corrective action): Michael White, Financial Services Manager

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Finding 1208514 (2025-065)

Material Weakness 2025

State of Alaska

AK

Procurement, Suspension & Debarment § 200.303

Single Audit Finding No. 2025-065 - The indirect cost rate in two of 11 FY 25 consultant contracts tested (18 percent) were incorrect. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with thi...

Single Audit Finding No. 2025-065 - The indirect cost rate in two of 11 FY 25 consultant contracts tested (18 percent) were incorrect. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding and recommendation. Corrective Action (corrective action planned): The department will ensure that DOT&PF follows applicable statute and policy. The department will implement additional controls by introducing a semiannual review of appropriate contacts within the department to ensure updated indirect rates are reflected. Completion Date (list anticipated completion date): June 30, 2026 Agency Contact (name of person responsible for corrective action): Michael White, Financial Services Manager

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Finding 1208513 (2025-064)

Material Weakness 2025

State of Alaska

AK

Procurement, Suspension & Debarment § 200.317

Single Audit Finding No. 2025-064 - Four of four judgmentally selected engineering and design-related professional service procurements were not publicly noticed on the Alaska Online Public Notice System. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding;...

Single Audit Finding No. 2025-064 - Four of four judgmentally selected engineering and design-related professional service procurements were not publicly noticed on the Alaska Online Public Notice System. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding and recommendation. Corrective Action (corrective action planned): Department management and procurement officers will ensure that DOT&PF follows applicable statute and policy and will implement additional controls to ensure equitable and fair procurement public notice policies are followed. Completion Date (list anticipated completion date): June 30, 2026 Agency Contact (name of person responsible for corrective action): Michael White, Financial Services Manager

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Finding 1208512 (2025-063)

Material Weakness 2025

State of Alaska

AK

Allowable Costs / Cost Principles § 200.303 § 200.430

Single Audit Finding No. 2025-063 - Three of 40 timesheets tested (eight percent) were entered into the State’s accounting system with incorrect coding. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The departme...

Single Audit Finding No. 2025-063 - Three of 40 timesheets tested (eight percent) were entered into the State’s accounting system with incorrect coding. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding and recommendation. Corrective Action (corrective action planned): The department will reinforce timesheet entry and processing procedures, and the finance officer will provide additional training to administrative staff to avoid future errors. Completion Date (list anticipated completion date): June 30, 2026 Agency Contact (name of person responsible for corrective action): Michael White, Financial Services Manager

View Audit 399484

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