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$5 million from AGDC goes back into state’s general fund
KI
Kristen Nelson Petroleum News
As part of Gov. Mike Dunleavy’s move to reduce the budget, the Office of Management and Budget queried state departments and agencies on what monies they had from their fiscal year 2019 budgets that would not be spent and could be directed back to the general fund to meet other needs, such as disaster spending following the Nov. 30 Southcentral earthquake.
OMB Director Donna Arduin told Senate Finance Jan. 29 that this was money that had not yet been dispersed.
The numbers are reflected in supplemental appropriation bills filed Jan. 28. As part of that process, the Alaska Gasline Development Corp. is transferring $5 million of unused funds back to the state’s general fund.
Asked by Sen. Lyman Hoffman, D-Bethel, what would happen to that $5 million if it were not returned to the general fund, Arduin said it would remain with AGDC.
AGDC has not had any recent additional funding from the Legislature and has been working to spread the funds it does have as far as possible. The corporation requested authorization to accept third-party funding last year, but legislators did not approve that request.
Financials posted as part of the AGDC board’s Jan. 10 meeting showed an ending balance as of November 2018 of $39.75 million, with a remaining balance at the end of the fourth quarter of fiscal year 2019 forecast at $15.18 million.
A recent audit of AGDC by the Division of Legislative Audit for the Legislative Budget and Audit Committee noted that since AGDC was established in 2010, the Legislature has appropriated $479.8 million which earned an additional $5.7 million in interest, monies which covered both the Alaska LNG project and the in-state Alaska Stand Alone Pipeline project. The audit said that as of July 2018 the corporation had expended $433.3 million and had an estimated $52.2 million available.
According to the January board report, funds available had dropped to $39.75 million as of November 2018.
Audit results That audit found one instance where ASAP costs were incorrectly coded to the AKLNG fund - corrected once identified by auditors, the audit report said. It found the corporation’s procurement procedures lacked an Alaska veterans’ preference. It found that after April 2016, when large dollar contracts should have been approved or communicated to the board, that that was not done. The board was also required to approve operating and capital budgets and the audit found two operating and several capital budgets were not properly approved. The audit report said AGDC had addressed the deficiencies associated with capital budgets prior to the audit, but deficiencies to operating budget approval had not been corrected prior to the audit.
In a January response to the audit, then-board chair David Cruz said the veterans’ preference had been added to AGDC’s procurement process; a procedure had been put in place to ensure contracts were approved or communicated to the board as required by the board’s bylaws; and a procedure had been put in place to assure formal board approval of operating budgets.
Since taking office Dunleavy has replaced two public members on the AGDC board and the two commissioner seats are now held by members of the new administration.
Executive management of the corporation changed in January when the new board, chaired by Dunleavy appointee Doug Smith, dismissed former President Keith Meyer and named Joe Dubler, a former AGDC officer, as interim president.
Direction for the project under the new administration is not clear.
AGDC is close to receiving an environmental impact statement for the AKLNG project from the Federal Energy Regulatory Commission, with a final EIS scheduled for the end of this year and a combined FERC and Corps of Engineers record of decision scheduled for early 2020.
- KRISTEN NELSON
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