oversight

Semiannual Report to Congress, September 2017

Published by the Denali Commission, Office of Inspector General on 2017-09-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Office of Inspector General

                                           Department of Commerce
   Denali Commission
                                              Inspector General           Office of Counsel
   Inspector General
                                           Deputy Inspector General




         Office of                             Office of Audit                Office of
       Administration                          and Evaluation              Investigations




The Department of Commerce Office of Inspector
General provides oversight services to the Denali
Commission through a Memorandum of Understanding.


Inspector General . . . . . . . . . . . . . . . . . .907.271.1757

Website. . . . . . . . . . . . . . . . . . . . . www.oig.denali.gov

Twitter . . . . . . . . . . . . . . . . www.twitter.com/DenaliOIG

Commerce OIG Hotline
    Telephone . . . . . . . . . . . . . . . . . . . . .800.424.5197
    TDD . . . . . . . . . . . . . . . . . . . . . . . . .855.860.6950
    Fax . . . . . . . . . . . . . . . . . . . . . . . . . .855.569.9235
    E-mail . . . . . . . . . . . . . . . . . . hotline@oig.doc.gov




COVER: View of Denali, the highest peak in North America.
Denali Commission
        OFFICE OF INSPECTOR GENERAL
     SEMIANNUAL REPORT TO CONGRESS




                  September 2017
Contents

Completed Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Work in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Oversight Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

     Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

     Transportation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

     Government Coordination . . . . . . . . . . . . . . . . . . 5

     Health Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 6

     Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Statistical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . 14
DENALI COMMISSION
The Denali Commission Act of 1998 (Denali
Commission Act) established the Denali Commission
(Commission) to deliver a wide range of services to
Alaska in the most cost-effective manner by reducing
administrative and overhead costs. As part of the
Denali Commission Act, the Commission provides job
training and other economic development services
in rural communities, with a focus on promoting
development in rural Alaska and on providing
key infrastructure, such as power generation and
transition facilities, modern communication systems,
and water and sewer systems.


Since its enactment, the Denali Commission Act
has been updated several times, expanding the
Commission’s mission to include the planning
and construction of health care facilities and the
establishment of the Denali Access System Program
to support surface transportation infrastructure and
waterfront transportation projects.


The Commission oversees five program
areas: Energy, Transportation, Government
Coordination, Health Facilities, and Training. The
Commission’s current priorities relate primarily to its
energy and government coordination programs.
    COMPLETED WORKS




    Completed Works
    During the semiannual reporting period, we completed a
    review of the Denali Commission’s compliance with FY
    2016 improper payments requirements and developed the
    FY 2018 work plan.




    REVIEW OF THE DENALI COMMISSION’S
    COMPLIANCE WITH FY 2016 IMPROPER
    PAYMENTS REQUIREMENTS
    (DCOIG-17-004-M)

    In August 2017, we completed our review of the
    Commission’s compliance with requirements of the
    Improper Payments Information Act of 2002 (IPIA), as
    amended. Our objective was to evaluate the accuracy
    and completeness of the Commission’s reporting and, if
    applicable, its performance in reducing and recapturing
    improper payments.

    Overall, we found that the Commission met the applicable
    Office of Management and Budget (OMB) criteria for
    compliance with IPIA, as amended, for FY 2016.




    FY 2018 WORK PLAN

    In September 2017, we developed the Denali Commission
    OIG’s annual work plan. We included a series of review
    required of all Inspectors General, as well as audits of
    programs unique to the Commission.




2    OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
                                                                                                                  WORK IN PROGRESS




Work in Progress
AUDIT OF THE DENALI COMMISSION’S                                 DENALI COMMISSION’S FY 2018 TOP
FY 2017 FINANCIAL STATEMENTS                                     MANAGEMENT AND PERFORMANCE
                                                                 CHALLENGES
SB & Company, LLC (SBC), an independent public
accounting firm, is currently performing an audit of the         In September 2017, we began our assessment of the
Commission’s FY 2017 financial statements in accordance          top management and performance challenges facing
with the Government Accountability Office’s Government           the Commission in FY 2018. The Commission has been
Auditing Standards and OMB Bulletin 15-02, Audit                 substantially affected by its evolving role in the village
Requirements for Federal Financial Statements.                   infrastructure protection program, continued budget
                                                                 constraints, and the upcoming change in the Federal
                                                                 Co-chair position. We plan to issue our assessment
AUDIT OF THE DENALI COMMISSION’S                                 of the Commission’s FY 2018 top management and
FY 2017 COMPLIANCE WITH FISMA                                    performance challenges in November 2017.

SBC is currently performing an audit of the Commission’s
FY 2017 compliance with FISMA in accordance with OMB             2018 RISK ASSESSMENT
Memorandum 17-05, Fiscal Year 2016-2017 Guidance on
Federal Information Security and Privacy Management              In September 2017, we began our annual risk
Requirements.                                                    assessment of the Commission’s programs and
                                                                 activities, to include an assessment of risks related to
                                                                 its funding recipients. The assessment will be used
REVIEW OF THE DENALI COMMISSION’S                                to develop program audits unique to the Commission
COMPLIANCE UNDER THE DATA ACT                                    based on risk.

SBC is currently performing a review of the Commission’s
compliance under the DATA Act in accordance with the
Federal Audit Executive Committee’s Inspectors General
Guide to Compliance Under the DATA Act.



AUDIT OF THE DENALI COMMISSION
GOVERNMENT TRAVEL PROGRAM

On March 30, 2016, we initiated an audit of the Denali
Commission’s government travel card program. Our
objective is to determine whether the Commission has
sufficient controls over travel card transactions to ensure
federal funds are being appropriately managed.




                                                     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017    3
    OVERSIGHT AREAS




    Oversight Areas
     ENERGY                                                                TRANSPORTATION

    Recognizing the critical role energy plays in the quality of         The Transportation Program was created in 2005
    life and economic development of Alaska’s communities,               as part of the Safe, Accountable, Flexible, Efficient
    the Commission has made energy its primary                           Transportation Equity Act: A Legacy for Users
    infrastructure theme since 1999.                                     (SAFETEA-LU) and accompanying amendments to the
                                                                         Denali Commission Act. The program focuses primarily
    The Energy Program funds the design and construction
                                                                         on two areas: rural roads and waterfront development.
    of replacement bulk-fuel storage facilities, upgrades to
    community power-generation and distribution systems,                 The roads portion focuses on planning, design, and
    energy efficiency measures, and alternative energy                   construction to address basic road improvement needs,
    projects. The Commission primarily works with the Alaska             including projects that connect rural communities to
    Energy Authority (AEA) and Alaska Village Electric                   one another and to the state highway system, and
    Cooperative (AVEC) to meet rural communities’ fuel                   opportunities to enhance rural economic development.
    storage and power generation needs.                                  Eligible project types include board roads (boardwalk-
                                                                         like systems) for all-terrain vehicles, local community
                                                                         road and street improvements, and roads and board
                                                                         roads to access subsistence-use sites (specifically
                                                                         designated locations used by Alaska Natives and rural
                                                                         community members to gather food).

                                                                         The waterfront portion addresses planning, design, and
                                                                         construction of port, harbor, and other rural waterfront
                                                                         needs. Eligible project types include regional ports,
                                                                         barge landings, and docking facilities. In addition,
                                                                         legislation was passed on December 18, 2015, that
                                                                         allowed the use of Trans-Alaska Pipeline Liability funds
                                                                         for the repair of barge mooring points and barge landing
                                                                         sites to facilitate pumping fuel from fuel transport barges
                                                                         into bulk fuel storage tanks.

                                                                         SAFETEA-LU expired in 2009 and operated under
                                                                         continuing resolutions from June 2009 through June
                                                                         2012. In June 2012, Congress passed a 2-year
                                                                         transportation bill, the Moving Ahead for Progress in the
                                                                         21st Century Act, which did not include authorization or
                                                                         funding for the Commission’s Transportation Program.
                                                                         The Commission’s Transportation Program is still
                                                                         functioning with funding appropriated several years



4     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
                                                                                                                   OVERSIGHT AREAS




  TRANSPORTATION                                                    GOVERNMENT COORDINATION

ago, but is winding down as projects are completed.               The Commission is charged with the special role of
Commission staff continues to administer the program in           increasing government effectiveness. The Commission
coordination with members of the Transportation Advisory          does so by acting as a catalyst and strategic partner
Committee, which rates and ranks project submissions,             for many federal and state programs in Alaska. The
recommends projects to the Commission’s Federal                   Commission joined others in a memorandum of
Co-Chair, and advises the Commission on rural surface             understanding (MOU) that outlines the roles of agencies
transportation needs in Alaska.                                   in coordinating resources and efforts in areas such
                                                                  as community planning, sustainability, data sharing,
The Commission works with these recipients and
                                                                  and coordination of pre-construction activities. This
program partners: U.S. Federal Highway Administration,
                                                                  MOU served as the basis for creating several multi-
Western Federal Lands Highway Division and Alaska
                                                                  agency workgroups and cooperative projects that have
Division; Alaska Department of Transportation and Public
                                                                  increased overall government effectiveness. The MOU,
Facilities; U.S. Army Corps of Engineers, Alaska District;
                                                                  amended in 2003 with increased participation from both
regional, local, and tribal governments; and regional tribal
                                                                  state and federal partners, was renewed once again
nonprofits.
                                                                  in 2008. This renewed effort focuses on improving
                                                                  the channels of communication among the heads of
                                                                  all federal and state agencies with an emphasis on
                                                                  critical issues that affect the entire state of Alaska: the
                                                                  high cost of energy, outmigration, and coordination of
                                                                  efforts among all government agencies. Government
                                                                  coordination has become a mainstay of the efforts of the
                                                                  Denali Commission in improving communities in rural
                                                                  Alaska.




                                                     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017    5
    OVERSIGHT AREAS




     HEALTH FACILITIES                                                     TRAINING

    Congress amended the Denali Commission Act in 1999 to                As the Commission funded projects for new clinics,
    provide for the planning, design, construction, and equipping        roads, and tank farms, it also provided sustainability for
    of healthcare facilities. The Health Facilities Program              these projects by including training for local residents to
    collaborates with numerous organizations, including the              maintain and operate new facilities.
    Alaska Native Regional Health Corporations, from which the
                                                                         The Commission has administered the training program
    program receives support. The Commission has invested in
                                                                         through numerous program partnerships. Each program
    regional networks of primary care clinics across Alaska and,
                                                                         partner has provided a high level of training opportunities
    in response to Congressional direction in 2003, initiated
                                                                         that support Commission investments in rural Alaska
    efforts to fund additional program areas addressing other
                                                                         by providing training for careers related to Commission
    health and social service-related facility needs. Further, the
                                                                         programs such as Energy, Transportation, and Health
    Health Facilities Program incorporated behavioral health,
                                                                         Facilities. Types of training funded have included
    dental care, and other components into its clinic design.
                                                                         allied health professions, construction trades, facility
    Over the years, the program has expanded to include
                                                                         operations, and maintenance, administration of public
    annual initiatives to support domestic violence facilities,
                                                                         infrastructure, and youth initiatives. However, the training
    elder housing, primary care in hospitals, emergency medical
                                                                         program was last funded in 2009, and applications for
    services equipment, and hospital designs.
                                                                         new training initiatives are no longer being accepted.
    During the past decade, the program used a universe-
    of-need model for primary care and an annual selection
    process via a Health Steering Committee for other program
    areas. In 2000, the program created a deficiency list for
    primary care clinics and found 288 communities statewide
    in need of clinic replacement, expansion, and/or renovation.
    That list was last updated in 2008. In the past, projects
    were recommended for funding if they demonstrated project
    readiness. However, the Health Facilities Program was last
    funded by Congress in FY 2010.




6     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
                                                                                                                      STATISTICAL DATA




Statistical Data
OFFICE OF INVESTIGATIONS STATISTICAL HIGHLIGHTS FOR THIS PERIOD

Investigative activities covers investigations opened and closed by OIG; arrests by OIG agents; indictments and other
criminal charges filed against individuals or entities as a result of OIG investigations; convictions secured at trial or by
guilty plea as a result of OIG investigations; and fines, restitution, and all other forms of financial recoveries achieved by
OIG as a result of investigative action. No investigative activities occurred during this reporting period.


Allegations processed presents the number of complaints from employees, stakeholders, and the general public that we
were able to identify from the limited records maintained by the previous inspector general. No allegations were processed
during this reporting period.


TABLE 1. INVESTIGATIONS, CRIMINAL PROSECUTIONS, AND CRIMINAL INDICTMENTS

 Type                                                                                                    Number of Reports

 Investigative Reports Issued                                                                                     0
 Persons Referred to the Department of Justice for Criminal Prosecution                                           0
 Number of Persons Referred to State and Local Authorities for Criminal Prosecution                               0
 Criminal Indictments and Information Resulting from Prior Referrals to Prospective Authorities                   0



AUDIT RESOLUTION AND FOLLOW-UP

The Inspector General Act of 1978, as amended, requires us to present in this report audits issued before the beginning
of the reporting period (April 1, 2017) for which no management decision had been made by the end of the period
(September 30, 2017).


Audit resolution is the process by which the Commission reaches an effective management decision in response to audit
reports.


Management decision refers to the Commission’s evaluation of the findings and recommendations included in the audit
report and the issuance of a final decision by Commission management concerning its response.




                                                      OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017       7
    STATISTICAL DATA




    TABLE 2. MANAGEMENT DECISIONS

     Report Category                                                                 Recommendations

     Management Decisions Pending (April 1, 2017)                                             0
     New Management Decisions Required                                                        0
     New Management Decisions Submitted                                                       0
     Management Decisions Accepted by OIG                                                     0
     Actions Pending (September 30, 2017)                                                     0



    AUDIT, EVALUATION, AND INSPECTION STATISTICAL HIGHLIGHTS FOR THIS PERIOD

    Audits of federal establishments, organizations, programs, activities, and functions must comply with standards
    established by the Comptroller General of the United States. Evaluations and inspections include reviews that do not
    constitute an audit or a criminal investigation. We completed a review of the Denali Commission’s compliance with FY
    2016 improper payments requirements; however, we found neither questioned costs nor funds that could have been put to
    better use.

    Questioned cost refers to a cost that is questioned by OIG because of (1) an alleged violation of a provision of a law,
    regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds;
    (2) a finding that, at the time of the audit, such cost is not supported by adequate documentation; or (3) a finding that an
    expenditure of funds for the intended purpose is unnecessary or unreasonable.

    Value of audit recommendations that funds be put to better use results from an OIG recommendation that funds
    could be used more efficiently if Commission management took action to implement and complete the recommendation.
    Such actions may include (1) reductions in outlays; (2) deobligation of funds from programs or operations; (3) withdrawal
    of interest subsidy costs on loans or loan guarantees, insurance, or bonds; (4) costs not incurred by implementing
    recommended improvements related to the Commission, a contractor, or a grantee; (5) avoidance of unnecessary
    expenditures identified in pre-award reviews of contracts or grant agreements; or (6) any other savings specifically
    identified.




8     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
                                                                                                                       STATISTICAL DATA




REPORT TYPES FOR THIS PERIOD

Performance audits are engagements that provide assurance or conclusions based on an evaluation of sufficient,
appropriate evidence against stated criteria such as specific requirements, measures, or defined business practices.
Performance audits provide objective analysis so that management and those charged with governance and oversight can
use the information to improve program performance and operations, reduce costs, facilitate decision making by parties
with responsibility to oversee or initiate corrective action, and contribute to public accountability.

Financial statement audits provide reasonable assurance through an opinion (or disclaimer of an opinion) about
whether an entity’s financial statements are presented fairly in all material respects in conformity with generally accepted
accounting principles, or with a comprehensive basis of accounting other than these principles.

Evaluations and inspections include evaluations, inquiries, and similar types of reviews that do not constitute an audit
or investigation. An inspection is defined as a process that evaluates, reviews, studies, or analyzes the programs and
activities of a department or agency to provide information to managers for decision making; make recommendations for
improvements to programs, policies, or procedures; and identify where administrative action may be necessary.


TABLE 3. REPORT TYPES FOR THIS PERIOD

 Type                                     Number of Reports                           Table Number

 Performance Audits                                 0                                       N/A
 Financial Statement Audits                         0                                       N/A
 Evaluations and Inspections                        1                                       3-A
 Total                                              1


TABLE 3-A. EVALUATIONS AND INSPECTIONS
 Report Title                                Report                 Date          Funds to          Amount            Amount
                                             Number                Issued         Be Put to        Questioned       Unsupported
                                                                                Better Use ($)        ($)               ($)


 Denali Commission’s Compliance         DCOIG-17-004-M           8.23.2017             0                  0                 0
 with FY 2016 Improper Payments
 Requirements




                                                        OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017      9
     STATISTICAL DATA




     TABLE 4. UNIMPLEMENTED RECOMMENDATIONSReport Category

     Resolved reports are reports for which (a) the Commission agreed to OIG recommendations and (b) OIG approved the
     action plan submitted by the Commission. Table 4 lists 5 resolved performance audit, evaluation, and inspection reports with
     a total of 10 unimplemented recommendations that were issued between May 15, 2015, and November 29, 2016. There is
     no potential monetary benefit of unimplemented recommendations associated with these reports.

     Unresolved reports include reports with no approved action plan as of September 30, 2017, and reports for which the
     action plans are not due until after the reporting period ending on September 30, 2017. Currently, there are no unresolved
     reports.



          Date          OIG Report             Total      Recommendations Unimplemented Potential Monetary
         Report         No. and Title     Recommendations   Agreed to by  Recommendations    Benefits of
         Issued                                Made         Management                     Unimplemented
                                                                                          Recommendations

       05.15.2015 DCOIG-17-007-I                    2                      2                   2                   $0
                      FY2014
                    Compliance
                   with Improper
                     Payments
                   Requirements



     Objective(s)

     Our objective was to evaluate the accuracy and completeness of the Commission’s reporting and, if applicable, its
     performance in reducing and recapturing improper payments.

     Summary

     We found that, while the Commission’s reporting on improper payments appeared accurate, it could be incomplete due to
     areas omitted from the risk assessment. The Commission did not perform the required risk assessment prior to publishing
     the FY 2014 Agency Financial Report. In addition, the assessment completed in March 2015 did not include all of the
     required risk factors, including payments to employees and whether grant payments were made for eligible services.

     Unimplemented Recommendations

     We recommended that the Commission strengthen its risk assessment process by:

         1. Performing a risk assessment prior to completing its FY 2017 Agency Financial Report.

         2. Adding assessment areas to include (a) payments to employees and (b) grant payments made for eligible
                services, thus assuring consideration of all of OMB’s required risk factors.




10     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
                                                                                                                      STATISTICAL DATA




    Date          OIG Report            Total      Recommendations Unimplemented Potential Monetary
   Report         No. and Title    Recommendations   Agreed to by Recommendations    Benefits of
   Issued                               Made         Management                    Unimplemented
                                                                                  Recommendations

 09.24.2015     DCOIG-15-012-A                9                       9                      1                      $0
                 Audit of Denali
               Commission Grant
               Monitoring Process

Objective(s)

Our objectives were to determine (1) whether the Commission’s grant monitoring process effectively ensures that federal
funds are being expended as intended and (2) whether the Commission is effectively allocating its grant monitoring
resources.

Summary

Based on this review, we determined improvements are needed in the Commission’s grant monitoring process.
Specifically, the Commission could better (1) exercise consistent grants management processes and procedures to identify
and limit risk to the organization, (2) communicate federal requirements to its grantees, and (3) manage grantee progress
reports.

Unimplemented Recommendations

We recommended that the Commission:

    9. Maintain written notification to grantees of past due progress reports in the official grant file.


    Date           OIG Report             Total      Recommendations Unimplemented Potential Monetary
   Report          No. and Title     Recommendations   Agreed to by Recommendations    Benefits of
   Issued                                 Made         Management                    Unimplemented
                                                                                    Recommendations

 05.26.2016     DCOIG-16-005-A                    5                   5                      2                      $0
                 Improvements
               Are Needed in the
               Denali Commission
                   Inventory
                  Management
                 and Equipment
               Acquisition Process


Objective(s)

Our objective was to determine whether the Commission’s processes and procedures for inventory management and
equipment acquisition were sufficient to ensure that federal assets and funds were being appropriately managed.




                                                       OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017      11
     STATISTICAL DATA




     Summary

     Based on this review we determined that improvements are needed in the Commission’s inventory management.
     Specifically, we found that the Commission (1) maintained an inaccurate and inconsistent inventory record, and (2) allowed
     unrestricted access to its official inventory.

     Unimplemented Recommendations

     We recommended that the Commission strengthen its inventory management and equipment acquisition process by
     formalizing the following processes:

         1. Implement inventory policies and procedures, to include required inventories and a definition of accountable
              equipment.

         5. Disseminate the equipment purchase policy to all employees and enforce the process for equipment acquisition




          Date            OIG Report           Total      Recommendations Unimplemented Potential Monetary
         Report           No. and Title   Recommendations   Agreed to by Recommendations    Benefits of
         Issued                                Made         Management                    Unimplemented
                                                                                         Recommendations

       09.28.2016        DCOIG-16-008-A               4                     4               4                     $0
                          Improvements
                        Are Needed in the
                        Denali Commission
                           Government
                          Purchase Card
                             Program



     Objective(s)

     Our objective was to determine whether the Commission’s internal control over purchase card transactions is sufficient to
     ensure that federal funds were being appropriately managed.

     Summary

     Based on this review, we determined that improvements are needed in the Commission’s government purchase
     card program. Specifically, the Commission could improve internal control over (1) purchase card transactions and
     documentation, and (2) the online purchase card management system.




12     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
                                                                                                                   STATISTICAL DATA




Unimplemented Recommendations

We recommended that the Commission strengthen internal control in its purchase card program by:

    1. Updating internal guidance to better reflect federal requirements with regards to purchase card transactions and
        documentation and emphasizing the importance of following guidance when making purchases.

    2. Removing access to the online purchase card management system from staff no longer employed by the Denali
        Commission.

    3. Including a procedure during the off-boarding process to verify any access to the online purchase card
        management system is removed.

    4. Updating the purchase card merchant category code template to reduce risk and revising the allowed merchant
        category codes for current cardholders.



    Date         OIG Report            Total      Recommendations Unimplemented  Potential Monetary
   Report        No. and Title    Recommendations   Agreed to by Recommendations     Benefits of
   Issued                              Made         Management                    Unimplemented
                                                                                 Recommendations

 11.29.2016 DCOIG-17-001-A                 3                      3                      1                       $0
            Denali Commission
              New Stuyahok
             Bulk Fuel Facility
                   Grant

Objective(s)

Our objectives were to determine whether (1) costs associated with the development of the New Stuyahok bulk fuel
facilities were allowable, allocable, and reasonable; and (2) the project was developed as intended and operating
successfully.

Summary

Based on this review, we found that (1) sampled costs associated with the development of the New Stuyahok bulk
fuel facility were allowable, allocable, and reasonable, and (2) the project was developed as intended and operating
successfully. However, we also found that improvements are needed in (1) the maintenance of the AVEC bulk fuel facility
and (2) the review of consultant fees.

Unimplemented Recommendations

We recommended the Commission instruct the grantee to:

    1. Determine the cause of standing water and vegetation in the AVEC bulk fuel facility and implement any necessary
        changes to ensure the facility is properly maintainedcategory codes for current cardholders.




                                                    OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017      13
     REPORTING REQUIREMENTS




     Reporting Requirements

     The Inspector General Act of 1978, as amended, specifies reporting requirements for semiannual reports. The
     requirements are listed below and indexed to the applicable pages of this report.

      Section                     Topic                                                                         Page

      4(a)(2)                     Review of Legislation and Regulations                                         15
      5(a)(1)                     Significant Problems, Abuses, and Deficiencies                                15
      5(a)(2)                     Resulting Recommendations for Corrective Action                               15
      5(a)(3)                     Prior Significant Recommendations Unimplemented                               15
      5(a)(4)                     Matters Referred to Prosecutorial Authorities                                 15
      5(a)(5) and 6(b)(2)         Information or Assistance Refused                                             15
      5(a)(6)                     Listing of Audit Reports                                                      2, 9*
      5(a)(7)                     Summary of Significant Reports                                                2, 9*
      5(a)(8)                     Audit Reports—Questioned Costs                                                2, 9*
      5(a)(9)                     Audit Reports—Funds to Be Put to Better Use                                   2, 9*
      5(a)(10)                    Prior Audit Reports Unresolved                                                16
      5(a)(11)                    Significant Revised Management Decisions                                      16
      5(a)(12)                    Significant Management Decisions with Which OIG Disagreed                     16
      5(a)(13)                    Noncompliance with Federal Financial Management Systems                       16
      5(a)(14) and 5(a)(15)       Results of Peer Review Received by OIG                                        16
      5(a)(16)                    Results of Peer Review Conducted by OIG                                       17
      5(a)(17) and 5(a)(18)       Investigations, Criminal Prosecutions, and Criminal Indictments               7, 17
      5(a)(19)                    Substantiated Investigations of Senior Government Employees                   17
      5(a)(20)                    Instances of Whistleblower Retaliation                                        17
      5(a)(21)                    Interference with OIG Independence                                            17
      5(a)(22)                    Closed OIG Matters Not Publicly Disclosed                                     18


     *Reference Completed Works, page 2 and Table 3-A, page 9.




     The following section includes information that is required under the Inspector General Act that is not otherwise
     addressed in this report, along with supplemental information on select reporting topics.




14     OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
                                                                                                          REPORTING REQUIREMENTS




SECTION 4(A)(2): REVIEW OF LEGISLATION AND REGULATIONS

This section requires the Inspector General of each agency to review existing and proposed legislation and regulations
relating to that agency’s programs and operations. Based on this review, the Inspector General is required to make
recommendations in the semiannual report concerning the impact of such legislation or regulations on (1) the economy
and efficiency of the management of programs and operations administered or financed by the agency or (2) the
prevention and detection of fraud and abuse in those programs and operations. There were no existing and proposed
legislation and regulations relating to the Commission’s programs and operations.


SECTION 5(A)(1) AND 5(A)(2): SIGNIFICANT PROBLEMS, ABUSES, AND DEFICIENCIES,
AND RESULTING RECOMMENDATIONS FOR CORRECTIVE ACTION

These sections requires a description of significant problems, abuses, and deficiencies relating to the administration
of programs and operations disclosed during the reporting period and the resulting recommendations for corrective
action. There were no significant problems, abuses, or deficiencies found during the reporting period, and no resulting
recommendations for corrective action were issued.


SECTIONS 5(A)(3): PRIOR SIGNIFICANT RECOMMENDATIONS UNIMPLEMENTED

This section requires identification of each significant recommendation described in previous semiannual reports for which
corrective action has not been completed. Section 5(b) requires that the Commission transmit to Congress statistical
tables showing the number and value of audit reports for which no final action has been taken, as well as an explanation
of why recommended action has not occurred, except when the management decision was made within the preceding
year. We have no prior significant unimplemented recommendations.


SECTION 5(A)(4): MATTERS REFERRED TO PROSECUTORIAL AUTHORITIES

This section requires a summary of matters referred to prosecutorial authorities and the resulting prosecutions and
convictions. There were no matters referred to prosecutorial authorities.


SECTION 5(A)(5) AND 6(C)(2): INFORMATION OR ASSISTANCE REFUSED

These sections require a summary of each report to the Commissioners when access, information, or assistance has
been unreasonably refused or not provided. We were not refused access, information, or assistance.




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     REPORTING REQUIREMENTS




     SECTION 5(A)(10): PRIOR AUDIT REPORTS UNRESOLVED

     This section requires: a summary of each audit report, inspection report, and evaluation report issued before
     commencement of the reporting period (A) for which no management decision has been made by the end of the reporting
     period, an explanation of why a decision has not been made, and a statement concerning the desired timetable for
     delivering a decision on each such report; (B) for which no establishment comment was returned within 60 days of
     providing the report to the establishment; and (C) for which there are any outstanding unimplemented recommendations,
     including the aggregate potential cost savings of those recommendations. There are no reports for which no management
     decision was made by the end of the reporting period or for which no establishment comment was returned within 60 days
     of providing the report to the establishment. There are currently 5 reports, with 10 unimplemented recommendations, that
     do not have any associated potential cost savings (see Table 4).


     SECTION 5(A)(11): SIGNIFICANT REVISED MANAGEMENT DECISIONS

     This section requires an explanation of the reasons for any significant revision to a management decision made during the
     reporting period. There are no appeals pending at the end of this period.


     SECTION 5(A)(12): SIGNIFICANT MANAGEMENT DECISIONS WITH WHICH OIG
     DISAGREED

     This section requires information concerning any significant management decision with which the inspector general
     disagrees. There were no significant management decisions with which OIG disagreed.


     SECTION 5(A)(13): NONCOMPLIANCE WITH FEDERAL FINANCIAL MANAGEMENT
     SYSTEMS

     Agencies are required to implement and maintain financial management systems that comply substantially with Federal
     financial management systems requirements, applicable Federal accounting standards, and the U.S. Government
     Standard General Ledger at the transaction level. If an agency does not comply with Federal financial systems, they are
     required to establish a remediation plan. This section requires the reporting of instances and reasons when an agency
     has not met target dates established in the remediation plan. There were no instances of noncompliance with Federal
     financial management systems.


     SECTION 5(A)(14) AND 5(A)(15): RESULTS OF PEER REVIEW RECEIVED BY OIG

     These sections require an appendix containing the results of any peer review conducted by another OIG during the
     reporting period and a list of outstanding recommendations. As of this reporting period, the Denali Commission OIG has
     not been peer reviewed and there are no outstanding recommendations.




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                                                                                                           REPORTING REQUIREMENTS




SECTION 5(A)(16): RESULTS OF PEER REVIEW CONDUCTED BY OIG

This section requires a list of any peer reviews conducted by the Inspector General of another OIG during the reporting
period, including a list of any outstanding recommendations made from any previous peer reviews. The previous Inspector
General did not conduct any peer reviews during the reporting period.


SECTION 5(A)(17) AND 5(A)(18): INVESTIGATIONS, CRIMINAL PROSECUTIONS, AND
CRIMINAL INDICTIMENTS & METRICS USED TO DEVELOP STATISTICAL DATA OF
INVESTIGATIONS, CRIMINAL PROSECUTIONS, AND CRIMINAL INDICTMENTS

This section requires a statistical table and a description of the metrics used to develop the data related to (1) the number
of investigative reports issued, (2) number of persons referred to the Department of Justice for criminal prosecution, (3)
number of persons referred to state and local authorities for criminal prosecution, and (4) number of criminal indictments
and criminal information resulting from any prior referrals to prospective authorities. There were no investigations, criminal
prosecutions, or criminal indictments.


SECTION 5(A)(19): SUBSTANTIATED INVESTIGATIONS OF SENIOR GOVERNMENT
EMPLOYEES

This section requires a detailed description of each investigation involving a senior government employee where
allegations of misconduct were substantiated, including a detailed description of (1) the facts and circumstances of the
investigations and (2) the status and disposition of the matter—including, if referred to or declined by the Department of
Justice, the date of referral or declination. There were no investigations involving senior government employees.


SECTION 5(A)(20): INSTANCES OF WHISTLEBLOWER RETALIATION

This section requires a detailed description of any instance of whistleblower retaliation, including (1) information about
the official found to have engaged in retaliation and (2) the consequences the agency imposed to hold the official
accountable. There were no instances of whistleblower retaliation.


SECTION 5(A)(21): INTERFERENCE WITH OIG INDEPENDENCE

This section requires a detailed description of any attempt by the Commission to interfere with the independence of OIG,
including (1) budget constraints designed to limit OIG capabilities and (2) incidents where the establishment has resisted
OIG oversight or delayed OIG access to information, including the justification of the establishment for such action. There
were no instances of the Commission attempting to interfere with the independence of the OIG.




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     REPORTING REQUIREMENTS




     SECTION 5(A)(22): CLOSED OIG MATTERS NOT PUBLICLY DISCLOSED

     This section requires a detailed description of the particular circumstances of each (1) inspection, evaluation, and audit
     conducted by OIG that is closed and was not publicly disclosed and (2) investigation conducted by the OIG involving a
     senior government employee that is closed and was not disclosed to the public. There were no instances of inspections,
     evaluations, and audits or investigations involving senior government employees that were not disclosed to the public.




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