Denali Commission, Office of Inspector General | Denali Commission | Semiannual Report to Congress, September 2017

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

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.

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

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.

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.

OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017 15
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.

16 OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017
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.

OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017 17
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.

18 OFFICE OF INSPECTOR GENERAL | SEMIANNUAL REPORT TO CONGRESS | SEPTEMBER 2017