Anchorage Audit Committee Meeting – February 27, 2026: Grants Management and FY24 ACFAR Update
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Anchorage Audit Committee Meeting – February 27, 2026: Grants Management and FY24 ACFAR Update
This meeting of the Anchorage Audit Committee focused on two primary topics: a review of the city's grant management practices following an internal audit, and an update on the delayed fiscal year 2024 Annual Comprehensive Financial Report (ACFAR) and related single audit. Key speakers included Stephanie (grants division), Mr. Burr (providing historical context), Joy Mariner (audit principal from the external audit firm), and Philippe (CAO representative). Committee members raised concerns about training, data accuracy, and resource constraints.
Public Comments & Testimony
- Mr. Hergsen (via phone) thanked the committee for convening and expressed that there appeared to be several questions that needed to be answered.
Discussion Items
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Grants Management Audit Update
- Stephanie reported on progress made over the past 18 months, including improved communication with departments, quarterly reminders, and efforts to document processes. She highlighted that the division is working to develop cohesive policy manuals and desk procedures with help from a temporary staff member loaned through HANA. A quarterly calendar and updated reporting deadlines are being implemented for 2026. She also noted that staff are working to update outdated SAP grants training materials.
- Mr. Burr provided context: the entire grants team departed a few years ago, resulting in lost institutional knowledge. He stated that the city has suffered on the grant side for about five years, exacerbated by the large volume of COVID-era grants. He emphasized three core issues: accurate numbers (different contact points showing different amounts), training (not mandatory or monitored), and resource constraints (a $1,000 grant requires the same work as a $10 million grant). He urged the assembly and administration to consider resources when accepting grants.
- Discussion revealed that there is no comprehensive master list of active grants with assigned grant administrators within SAP. Stephanie stated that her team is working on reassignment and a quarterly review process, but SAP does not easily produce a reliable list.
- Regarding training, it was noted that the grants team itself had not completed the SAP grants accounting training, which is outdated. Stephanie said they have been tasked with updating the training in the first quarter of 2026.
- Philippe (CAO representative) added that HR and IT are collaborating on a new system to track employee training needs, but a timeline was not provided. He acknowledged the city started with a significant deficit due to vacancies (only half the contract division staff when Stephanie started 18 months ago).
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Fiscal Year 2024 ACFAR and Single Audit Update
- Joy Mariner (audit principal) presented the status: the 2023 single audit is still ongoing, with the main outstanding item being reconciliation of FEMA expenditures between the municipality, state, and federal levels. The 2024 financial statement audit has multiple components: the CIVIC, PAC, CDA, and transportation procedures are completed; AWO is issuing on February 28; solid waste and port audits have drafts with management; the ACFAR draft is in hand but incomplete.
- Key challenges included: SAP's complexity preventing normal trial balance production (multiple trial balances need manual combination under GAAP), the general ledger not balancing with the trial balance in some areas, and ongoing grant reconciliation issues (version four still not final). Mariner stated that typically audits don't begin without a balanced trial balance, and grants remain a major obstacle.
- She clarified the relationship between the ACFAR and the single audit: the single audit tests compliance for major grant programs and cannot be completed until grant revenue numbers in the financial statements are finalized. The 2023 single audit is overdue; 2024 will start only after 2023 is issued.
- Philippe said management is prioritizing the ACFAR (target March 31, 2026 issuance) to meet bond rating agency requirements, but the single audit work continues in parallel. Letters have been sent to major grant providers (e.g., HUD) to explain the delay. He noted that while some rating agencies accept draft financials, failure to issue timely reports could eventually affect bond ratings, but the city is not at that point yet.
Key Outcomes
- The committee received the grants management audit update and the ACFAR/single audit update without formal votes. No binding decisions were made.
- Stephanie committed to producing a draft of policies and procedures by March 2026 and final adoption by July 2026, noting the process is continuous.
- The team will continue working toward an ACFAR issuance by March 31, 2026, though significant work remains on trial balance accuracy and grant reconciliation.
- The 2023 single audit will proceed concurrently, but completion depends on resolving FEMA data discrepancies and finalizing grant listings.
- No additional meetings or deadlines were set; the committee will receive ongoing weekly updates from the audit team.
Meeting adjourned at 2:01 PM.
Meeting Transcript
That we do within our division, communicating a little clearer with the apartments, and reporting deadlines on our shared calendar. Again, we're just getting this going this year's year of fun with a lot of the changes and improvements this 2026. So we want to start behaving like a 2026 on so we're not in the paper file world anymore. So we gotta have to streamline what we're doing on and our shares of them. We're gonna start holding the departments accountable with the policies and procedures and combined with what they have to do. I send quarterly reminders out to the departments because there's a lot of turnovers there as well. There's not a true training process going on yet. That is something in the near future we hope to be able to do with Michelle Nelson. Um she's our new grant um seeker director, I forget her right term, but she's gonna help us bring everybody together in the training sessions for just a little bit far far out with that, probably this summer is what I'm looking for to that. Um we are from develop um cohesive policy manuals and desk procedures, not only for our division, but we will also do it uh community wide. Um we have somebody helping us with that that we're borrowing ahead of that for HANA, right? Um that city was lended to us, so he's helping us get some templates going. So it's getting pretty exciting. I just had my first uh meeting with my leadership team for this new quarter year. Um I say new year because the last two months have been pretty crazy. Uh, we're gonna start streamlining and documenting all of our processes, not only with grants, but um throughout the division, so that when somebody does this, or there is turnover, because there's going to be turnover or people retiring, that the knowledge is not lost with that. Because that's a lot about the last 18 months that I encountered. It's a lot of cleanup and catching things up. Um, and then um let's see, I had a few of these. If there's any specific questions about any clear um finding or concerns over everything, I'm happy to expand upon them. Um I think I touched and kind of highlighted all the major things that's really about documentation and file management, sticking with uh compliance within the grants, and then as well as um deadlines. Um, and then I saw one more that I overlooked that segregation of duties and oversight, we're making sure that not any one person is doing all the work and that our grant team um staff accountants understand what their role is, um, and then if they need help, they tag the supervisor or myself if we need to step in and help with things within the departments and and um and then just go in for the department to their turnover and just have that open communication open um throughout the municipality because it spreads pretty far neat, but um I'm happy to address any certain things and if the internal audit teams in our comments speak, we can go through you know the the whole finding is a fairly large list, so I didn't want to start reading rebatems on anything, but if anything stands out to any of the members um or internal audit or anybody in the audience, I'm happy to um address any of those specifically. Thank you for that. Um Buddh team want to come and give some context or background. I see that. Mr. Burr. Um one comment I'd like to make. I am so happy to see so many assembly people uh not even on the committee joining today, so that's just brilliant. So I really appreciate uh everyone on the phone and so forth. Um this as a little bit of history here just for some of the new members. Uh you know, the the entire grants team basically left a few years ago. Um and that took a lot of knowledge and a lot of uh history that they have with them. They're on where we had to rebuild up that that entire group, not just the accounting team or grants team, but the entire one. And I think that's really what's led to a lot of these things. I'm sure you're gonna hear later on today about the single audit, which is all grant-related as well. And you know, we're two years now, and we have passed due on that particular one. It's really the root of what we're talking about, what this audit is and what the ramifications of that is what you're seeing and what the city is dealing with at this particular point. And I'm just going to kind of go into three segments just to kind of summarize here. One is having accurate numbers, having accurate expenditures, having accurate recap numbers. When you look at the audit and you go to a grant, and that we have three different points of contact, and they all have a different amount, and they all think that that number's correct. How are we ever going to reconcile with that's an what's accurate when ultimately we have to put it into our single audit maybe a year or two down the road? So having everybody agree with the numbers and the amounts and doing it on a timely basis is really a core thing. So whatever the controller's department can do to get that under control going forward, I think is a huge, huge benefit. We do have a grants module in SAP. It was designed when we went live in 2017. But all the people with experience, knowledge are all gone on that particular creation. So we the other one of the other things that Stephanie talked about was training. That was something we really saw across the board. You have to understand we have grants being run by every single department, and the controller's department is just the central repository of reporting all of that and gathering it all.
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