Alaska Sat on $279.8M in FEMA COVID Aid, Lost $9.1M
Summary
Alaska's own legislative watchdog found the state's Department of Health left $279.8 million in FEMA-approved COVID-19 disaster reimbursements unbilled through the close of fiscal year 2024, even though the federal government had cleared nearly all of the money for payment by October 2023. The delay cost the state's general fund at least $9.1 million in forgone interest income between December 2023 and June 2024 alone. It is one of three separate federal-funds accounting failures the same department racked up in the same audit year, inside a statewide audit that found 85 total findings -- up from 44 a decade ago, a rise the legislative auditor herself called degradation in agency controls.
Money the state was owed, sitting uncollected
The COVID-19 pandemic was declared a disaster (DR-4533) in April 2020, making state costs incurred through July 2022 eligible for federal reimbursement under 's Disaster Grants -- Public Assistance program. DOH's predecessor department, the Department of Health and Social Services, spent the money responding to the pandemic and submitted its costs to DMVA, the state's federally designated recipient for disaster grants, for approval and payment. The bulk of the spending, $276.4 million, happened during or before fiscal year 2022 -- meaning some of this money has been sitting unbilled for close to two years past 's own approval date, and up to four years past when Alaska first spent it.
View data as table
| FEMA-approved project worksheets | $297.1M |
|---|---|
| DOH expenditures recorded | $290.2M |
| Never billed to DMVA | $279.8M |
"Obligated" isn't paid, and neither, it turns out, is "approved"
A receivable -- money owed to the state that hasn't come in yet -- is supposed to be billed and collected within a year under the state's own accounting manual, which requires agencies to bill "as soon as possible after billing information is available." It's also state policy to conserve general funds and maximize interest earnings, and the cash-management agreement Alaska has with the U.S. Treasury exists specifically to account for the time value of delayed federal payments. None of that happened here. DOH management told auditors the delay came from a mix of causes: the 2022 split of the old Department of Health and Social Services into two new departments, which forced agreements and accounting structures to be rebuilt from scratch; turnover among the DOH and DMVA staff who handle the grants; time spent contesting costs had initially denied; the sheer volume of documentation reimbursement requires; and, notably, DMVA's own request that DOH submit one comprehensive bill covering all 12 project worksheets at once, rather than billing each one as it cleared.
That last point means the delay wasn't purely a DOH problem -- DMVA effectively told DOH to wait. But waiting had a price. Using the state's own most conservative FY2024 general-fund rate of return, auditors calculated the state forfeited $1.3 million a month in interest it could have earned had the federal money come in on time, for a total of $9.1 million just between December 2023 and June 2024 -- and auditors were explicit that they only started the clock in December 2023 because that's a conservative floor; the money could reasonably have been billed, and the interest earned, considerably earlier.
View data as table
| Dec 2023 | $1.3M |
|---|---|
| Jun 2024 (cumulative) | $9.1M |
The third federal-funds failure at the same department, same year
The unbilled money wasn't DOH's only federal-accounting problem in the FY2024 audit. Separately, the department's own finance division failed to collect or resolve $26.6 million in two other outstanding federal receivables -- one of which traces back to a data-entry error from September 2017 that has gone unresolved since it was first flagged in the fiscal year 2019 single audit, seven audit cycles ago. And DOH's Medicaid claims processing drew its own separate rebuke: the department never obtained a legally required annual report on the internal controls of the outside contractors that run its Medicaid claims system, a system that moved roughly $2.4 billion in general-fund spending and generated about $1.8 billion in federal Medicaid grant revenue in FY2024 alone. The gap was serious enough that state auditors could not get sufficient evidence the activity was properly reported at all, forcing a qualified opinion on two of the state's core financial statements.
Three separate federal-funds control failures, one department, one audit year -- against a statewide backdrop the legislative auditor herself flagged as a trend, not a one-off. Alaska's FY2024 single audit logged 85 total findings, up from 44 a decade earlier. Presenting the report to lawmakers, Legislative Auditor Kris Curtis attributed the near-doubling to "a lack of experience, lots of turnover, vacancies" and inadequate training, calling the result "a degradation within the departments' internal controls."
- Alaska's Department of Health left $279.8 million in -approved COVID-19 disaster reimbursements unbilled through the close of FY2024, even though $296.9 million of the underlying claims had been -approved by October 2023 and $276.4 million of the spending dated to FY2022 or earlier.
- The delay cost the state's general fund at least $9.1 million in forgone interest income between December 2023 and June 2024 alone, by auditors' own conservative estimate -- a cost auditors say could have started accruing earlier than the date they used to calculate it.
- This is one of three separate federal-funds accounting failures auditors found inside the same department in the same audit year, inside a statewide audit whose total findings have nearly doubled over the past decade -- a pattern the legislative auditor attributes to staff turnover and understaffing, not a single agency's mistake.
- Auditors recommended DOH's finance director ensure documentation and interagency billing move faster to minimize reliance on general funds instead of available federal money. DOH management agreed with the finding; no date was attached to when the $279.8 million backlog will actually be billed.
The $9.1 million interest figure and its $1.3 million monthly rate are stated directly in the audit; the month-by-month cumulative build in the second chart is BlackLeaf's own even-spacing reconstruction of that stated rate, not a table the audit itself publishes. The 44-findings comparison is independently verified against the Division of Legislative Audit's own FY2015 statewide single audit, which states '44 recommendations' directly; the framing of that year as 'a decade ago' and the 'degradation' characterization come from the legislative auditor's November 2025 testimony to the Legislative Budget and Audit Committee, as reported by the Anchorage Daily News, not from either written audit report. The audit's financial statements and findings cover activity only through June 30, 2024; whether DOH has since billed DMVA for some or all of the $279.8 million is not addressed in this report.
Sources(3) ▾
- Alaska State Legislature, Division of Legislative Audit (Legislative Budget and Audit Committee), State of Alaska Statewide Single Audit for the Fiscal Year Ended June 30, 2024 (2025-11-20) — The Alaska Division of Legislative Audit's statutory Single Audit Act review of the State's FY2024 basic financial statements and its compliance in administering roughly $5.5 billion in federal financial assistance. Primary source for Finding No. 2024-068 (DOH's unbilled disaster-grant reimbursements and the resulting lost interest), Finding No. 2024-049 (a separate, long-outstanding $26.6 million federal receivable at the same department), Finding No. 2024-048 (the SOC-report gap that qualified DOH's Medicaid-related audit opinion), and the report's overall finding count and federal-assistance total. legaudit.akleg.gov · original document
- Alaska State Legislature, Division of Legislative Audit (Legislative Budget and Audit Committee), State of Alaska Single Audit for the Fiscal Year Ended June 30, 2015 (2015-12-01) — The same Division of Legislative Audit's statewide single audit from nearly a decade before the FY2024 report -- primary-source confirmation of the 'a decade ago' findings count Legislative Auditor Kris Curtis cited in her November 2025 testimony on the FY2024 results. legaudit.akleg.gov · original document
- Anchorage Daily News, Legislative auditor warns of 'degradation' in Alaska state agencies (2025-11-20) — News coverage of Legislative Auditor Kris Curtis's presentation of the FY2024 Statewide Single Audit to the Legislative Budget and Audit Committee. Source for the decade-over-decade findings comparison (85 vs. 44) and Curtis's own 'degradation' characterization of the cause -- context and testimony not written into the audit report's own text, corroborating the report's finding count. adn.com · original document
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The federal government had already approved paying Alaska back. Alaska just never asked. That is the finding of the Alaska Division of Legislative Audit⧉ -- the state legislature's own independent watchdog, answerable to lawmakers rather than the agencies it reviews -- in its statutory review of Alaska's fiscal year 2024 books. The state's Department of Health (DOH) had $297.1 million in COVID-19 disaster-relief costs formally approved by across 12 project worksheets, the paperwork that turns an agency's disaster spending into a federal reimbursement claim. Almost all of it, $296.9 million, was -approved by October 2023. As of June 30, 2024, DOH still had not billed the Alaska Department of Military and Veterans' Affairs (DMVA) -- the in-state agency that actually processes reimbursement requests and cuts the check -- for $279.8 million of it.