A newly released audit of the Municipality of Anchorage shows the city has problems when it comes to operational efficiency, budget management, financial oversight, record keeping and unauthorized spending.
Dated Jan. 27, the audit was submitted to Anchorage Assembly members for their Feb. 17 meeting.
POORLY MANAGED SPORTS FACILITY
Among the findings, the audit notes that The Harry J. McDonald Memorial Center, located in Eagle River shows “deficiencies in recordkeeping and numerous inconsistencies within their financial records.”
The versatile sports facility, featuring an Olympic-sized ice rink, indoor turf, two walking tracks, and community rooms, is owned by the city but has been managed by the nonprofit Fire Lake Arena Management, Inc. since 1984.
Auditors found that the contractor “incurred expenses not included in the original budget and made changes to the budget without obtaining prior approval from the Administrator; and paid end-of-year bonuses to employees despite being over their salary/wage budget and ending the fiscal year at a loss.”
Furthermore, the audit revealed that the contractor has “yet to submit audited financial statements for fiscal years 2021 to 2024; is currently in a pending investigation involving a former employee related to alleged misappropriation of resources; and calculated retainage payments incorrectly and did not always track the payments in the annual budget.”
Additionally, the contractor did not “always submit annual budget proposals in a timely manner, has not adhered to the due dates for monthly submittals established by the Administrator, and engaged into a subcontract exceeding $10,000 without prior written approval from the Administrator.”
Finally, the audit showed that he contractor “did not perform the annual inventory, resulting in some capitalizable assets remaining untagged, and has not submitted the required preventative maintenance plan due each year.”
SHODDY RECORDS & ACCOUNTABILITY FOR GRANTS
When it comes to processing, tracking and holding grant recipients accountable, the city is also in need of major improvement.
The audit looked at grants administered by the Anchorage Health Department, the Public Transportation Department, and the Office of Emergency Management, finding that all three need improvement.
“Specifically, our review found that amounts in grant reporting documents did not always match, and grant reporting records were not always maintained by Grant Accounting staff,” the audit states. “In addition, Grant Accounting did not always provide department staff with grant reporting documents to review in a timely manner, and Office of Emergency Management staff circumvented grant reporting requirements.”
Financial reporting to the grantor was found to be delayed, while grant training for city employees was insufficient.
“Finally, Grant Accounting lacks comprehensive written Policies and Procedures or desk manuals to adequately and accurately determine the roles and responsibilities of department staff on grant processes, and the Office of Emergency Management lacks internal written procedures or desk manuals determining the roles and responsibilities of staff in grant processing,” the audit reports.
ALASKA WATCHMAN DIRECT TO YOUR INBOX
ISSUES SECURING SCHOOL ACCESS POINTS
When it comes to securing access to area schools, the auditors found multiple red flags.
“Our audit found that the Anchorage School District’s controls over building access need to be improved,” the report notes. “Specifically, our review found work orders for building access, specific to exterior doors, needs review as the work orders were not always resolved timely.”
It adds: “In addition, we found building access to schools and departments were not always secure, and found multiple storage units were not secure after operating hours. Moreover, we found some processes within the Key Control Procedures were not always followed. Finally, the list of fob holders we received from the schools did not always match the list of fob holders we received from the support department.”
INEFFICIENT EQUAL RIGHTS COMMISSION
The audit also revealed needed improvements in operational efficiency and budget management for the Anchorage Equal Rights Commission.
“Specifically, the Anchorage Equal Rights Commission did not always issue determinations within the 240 days stated in the Anchorage Municipal Code,” the audit notes. “In addition, the Anchorage Equal Rights Commission did not have established internal policies and procedures, or desktop manuals to document operational processes. Moreover, we found deficiencies in maintaining up-to-date information and record keeping.”
The commission also failed to track outreach performance, and overall efforts appear to have little to no impact on the number of inquiries received.
“Finally, our review found a lack of financial oversight from Anchorage Equal Rights Commission management,” the audit states.
Read the entire audit here.
