GOLDEN VALLEY ELECTRIC ASSOCIATION INC

Finding 2025-001: Procurement, Suspension and Debarment – Noncompliance and Significant Deficiency in Internal Control over Compliance Agency: Department of Defense Assistance Listing Numbers (ALN): 12.600 Program Name: Community Investment Pass-Through Agency: Alaska Energy Authority Pass-Through Entity Identifying Number: 7910077 Award Year: 2022 Criteria: The Uniform Guidance requires that recipients of federal awards have adequate procedures and controls in place related to procurement and that they ensure that procedures are properly documented. Procedures should provide for full and open competition supported by a cost or price analysis. They should provide for retention of files and other supporting documentation which provides evidence of compliance with specified requirements. Condition: We reviewed 2 out of a total of 3 procurement files and noted an exception with 1 of the 2 procurements sampled. The Association did not follow its established procurement policy when procuring services through a sole-source contract exceeding the Federal micro-purchase threshold. Specifically, the required approvals for a sole-source procurement were not obtained, and supporting documentation was not retained to demonstrate that the procurement was conducted in a manner that ensured full and open competition. Cause: The Association did not adhere to its established procurement policy. Effect or Potential Effect: An ineffective control system related to the procurement process can lead to noncompliance with laws and regulations. The Association could award contracts to vendors whose contract prices are unreasonable and federal funds may have been expended that were not demonstrated to be cost-effective. Contracts awarded to invalid vendors may result in disallowed expenditures. Questioned Costs: None. Context: We selected a sample of 2 procurement transactions totaling $11,891,236. Of the two procurements selected for testing, one was for engineering consulting services totaling $50,000. The Association did not obtain price or rate quotations from qualified sources and did not obtain the approvals required under its procurement policy for sole-source procurement. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management review current and future procurement transactions to ensure compliance with both Association and Federal procurement requirements. Management should ensure that required approvals are obtained and that sufficient documentation is retained to support procurement decisions and demonstrate that purchases were conducted with full and open competition, or that an appropriate exception was properly approved and documented. Views of responsible officials: Management plans to communicate with authorized contract approvers to reinforce compliance with the Association’s established procurement policy and ensure procurement transactions receive the required review and approvals.

Finding 2023-002 Reporting - Noncompliance and Significant Deficiency in Internal Control Over Compliance Agency Department of Homeland Security, Federal Emergency Management Agency (FEMA) Assistance Listing Numbers (ALN) 97.036 Program Name Disaster Grants – Public Assistance (Presidentially Declared Disasters) Award Year 2022 Pass-Through Agency State of Alaska Department of Military and Veterans Affairs Pass-Through Entity Identifying Number PW0005 Criteria or Specific Requirement Uniform Guidance stipulates that recipients must use the standard financial reporting forms or such other forms as may be required by the granting agency. Recipients of Public Assistance are required to submit a yearly financial report along with quarterly progress reports. Condition The Association did not include life-to-date expenditures on the quarterly progress reports to the State of Alaska, the pass-through agency for the Public Assistance program. Cause The Association was informed by certain personnel at the State of Alaska to fill out the progress reports in an inaccurate manner. Effect or Potential Effect Inaccurate quarterly progress reports were submitted to the State of Alaska. As a result, there may be errors in State of Alaska reporting to the Federal agency. Questioned costs None. Context BDO tested two quarterly progress reports in 2023 and one yearly financial report for 2023, which represents all of the reports filed. Life to date expenditures were not disclosed on the two quarterly progress reports tested. Identification as a repeat finding Not a repeat finding Recommendation We recommend management establish internal controls to ensure that reports are submitted to federal agencies in accordance with OMB and federal awarding agency requirements. Views of Responsible Officials Management agrees with the finding and will complete the missing information in future progress reports submitted to the State of Alaska.

Finding 2023-003 Deadline for Federal Single Audit – Reporting - Noncompliance and Significant Deficiency in Internal Control Over Compliance Agency Department of Homeland Security, Federal Emergency Management Agency (FEMA) Assistance Listing Numbers (ALN) 97.036 Program Name Disaster Grants – Public Assistance (Presidentially Declared Disasters) Award Year 2022 Pass-Through Agency State of Alaska Department of Military and Veterans Affairs Pass-Through Entity Identifying Number PW0005 Criteria or Specific Requirement 2 CFR 200.512, Report Submission, establishes that the audit must be completed and the data collection form and reporting package submitted to the Federal Audit Clearinghouse (FAC) within the earlier of 30 days after receipt of the auditor's report or 9 months after the end of the audit period. Condition The Association did not comply with the required submission date of the data collection form and reporting package to the FAC for the fiscal year ended June 30, 2023. Cause The Association did not have controls in place to ensure the audit was completed timely so that the reporting package could be submitted to the FAC within the required timeframe. Effect or Potential Effect The Association is not compliant with 2 CFR 200.512. The Association could be exposed to a reduction or elimination of funds by the Federal awarding agencies. Questioned costs Not applicable. Context This is a condition identified per review of the Association's compliance with the specified requirements. Identification as a repeat finding No Recommendation We recommend the Association establish controls to ensure the audit is completed timely and the reporting package is submitted to the FAC within the required timeframe. Views of responsible officials Management agrees with the finding and plans to establish processes and procedures to ensure the audit is completed timely and the reporting package is submitted within the required timeframe.