Quarterly Report: 2010, January - March (Q3), Akiachak

Community:
Akiachak 
Staff:
Fred Broerman  
DCRA Regional Office:
 
Gov't Type:
Federally Recognized Tribe 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
Akiachak Native Community 
Population:
644  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/10/2010 
Community Sanitation Overview:
Akiachak Native Community-IRA (ANC) operates the washeteria, water treatment plant, garbage collection, and the honey-bucket haul system. ANC's Council is the policy making body for the utility. A new well, water tank, water treatment plant and a road to the new lagoon have been completed. Currently, 72 homes and the school and teacher's housing are served by a piped system; other residents haul water from the community's watering point and ANC provides container haul (hoppers) for sewage. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Akiachak on February 22, 2010 and conducted a RUBA management assessment with ANC's administrative and finance staff. Subsequent to our visit numerous phone conversations and email exchanges occurred between RUBA staff and ANC's administrator, business manager, accountant and bookkeeper to resolve essential indicator issues. The report that follows reflects information provided by ANC as of April 1, 2010. Bethel RUBA staff also contacted the IRS concerning Akiakchak IRA Council's IRS tax problems. The community is listed on the December 2009 Lien Watch report. There is verification of a recent payroll tax deposit made by AIC, however the IRS states it did not cover the payroll liabilities due. In addition the payroll tax deposits have not been paid for the first quarter of 2010. AIC is working with the IRS to settle all unpaid payroll tax liabilites and planned to do this with gaming revenues. AIC currently does not hold a gaming permit. Gaming reports and taxes for a previous permit were not filed nor paid since 2002. The IRS filed a levy and is considering additional leviews and penalties if these issues are not addressed by AIC. Bethel RUBA staff will facilitate a meeting with the IRS and AIC to draft and adopt a repayment plan. Sanitation construction funds are on hold until the IRS issue is settled.  
RUBA Activities for the Coming Qtr:
Bethel RUBA staff will continue assisting ANC with their FY 2010 budget and monthly financial reports so they reflect a complete financial picture of the ANC's water and sewer utility. When these issues are resolved and ANC provides verification of gaming permit and payment of back gaming fees for 2006 to 2009 the finance essential indicators will be re-evaluated.
Scores:
 
Essential Indicators:
22 of 27
Sustainable Indicators:
18 of 27
Total Score:
40 of 54

Finances

Essential Indicators
Answer Question
No All revenues and expenses for the utility are listed in the utility budget.
No The utility has adopted a balanced realistic budget.
No Monthly financial reports are prepared and submitted to the policy making board.
No The utility is current in paying all water/wastewater electric bills.
Yes The utility has on hand a year's adequate fuel supply or it has a financial plan to purchase an adequate supply.
No The utility is receiving revenues (user fees or other sources) sufficient to cover operating expenses.
Sustainable Indicators
Answer Question
No The utility is receiving revenues (user fees or other sources sufficient to cover operating expenses and Repair & Replacement (R) costs.
No YTD revenues are at a level equal to or above those budgeted.
No YTD expenditures are at a level equal to or below those budgeted.
Yes A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
ANC's FY 2010 budget and monthly financial statements do not include expenditure line items for: Payment schedule for their past due electric bill to Akiachak Limited. Projected fuel costs Payment schedule for back taxes to IRS Payment schedule for back gaming fees (2006-2009) to Alaska Department of Revenue Payment schedule for their past due account to Crowley Petroleum Distribution for their 2009 fuel purchase. Payment schedule for ANC's outstanding balance to Akiachak Bulk Fuel Tank Farm for its share in the farm's operational and maintenance and renewal and replacement costs. ANC's business manager and accountant indicated that verbal and written financial reports are submitted at their tribal meetings, but minutes from the December 2009 tribal meeting fail to mention a financial report. Hard copies of the December 2009 and January 2010 monthly financial reports were provided to RUBA and are on file. However, these financial reports did not provide, as mentioned above, adequate detail to determine if the utility can be run without a deficit. ANC's tribal council should be provided with monthly financial statements that give a complete picture of the tribe's revenues and obligations. The council's review of the monthly financial reports also need to be consistently documented in minutes of tribal meetings and a copy of the reports forwarded to RUBA's Bethel office. RUBA staff contacted Akiachak Limited (the community's electric company) on March 5, 2010 which indicated that ANC had made a payment to their account on January 26, 2007, however their remaining balance was four times the amount of their average monthly bill. Monthly electric charges for ANC's water and sewer plant are 50-60% of the tribe's total bill. Part of the delinquency is due to ANC's refusal to pay waste heat charges for their water treatment plant despite having a contract to do so. ANC's administrator informed us that they had 30,000 gallons of bulk fuel available which he projected would last until September of 2010. Bethel RUBA staff contacted Crowley Petroleum Distribution on March 5, 2010 and was informed that ANC had a substantial past due balance and was accruing significant late charges on their account. Crowley also indicated that they had not been contacted by ANC regarding the outstanding bill. The tribal business manager informed RUBA that ANC did not qualify for a bulk fuel loan from Alaska Energy Authority due to not having a current State of Alaska gaming permit. RUBA contacted the Department of Revenue regarding this matter and was informed that the tribe had not had a gaming permit since 2006 and was responsible for paying state gaming fees for the years they continued gaming without a permit. As of this writing the tribe has contacted the Department of Revenue and is attempting to get into compliance. ANC also has a significant outstanding balance to the Akiachak Bulk Fuel Tank Farm for its share in the operational and maintenance and renewal and replacement costs of the plant.

Accounting Systems

Essential Indicators
Answer Question
Yes The utility has adopted a collection policy and actively follows it.
Yes The utility bills customers on a regular basis.
Yes An accounts receivable system is in place which tracks customers and reports past due accounts and amounts.
Yes An accounts payable system is in place.
Yes The payroll system correctly calculates payroll and keeps records.
Yes A cash receipt system is in place that records incoming money and how it was spent.
Yes The utility has a cash disbursement system that records how money was spent.
Sustainable Indicators
Answer Question
Yes A chart of accounts is used that identifies categories in a reasonable, usable manner.
Yes Monthly bank reconciliations have been completed for all utility accounts.
Yes The utility has a purchasing system that requires approval prior to purchase, and the approval process compares proposed purchases to budgeted amounts.
Accounting Systems Comments
ANC's accounting is done with QuickBooks Pro and they are on a calendar year fiscal cycle. Their accountant and bookkeeper are competent long-term employees and skilled workers who easily accessed records and provided verification needed for the accounting indicators. An example of a water and sewer billing statement, an accounts receivable aging summary, and a collections policy were provided and are in RUBA files in Bethel. ANC's water and sewer accounts receivable aging report showed only small amounts owed to the utility that were over 90 days past due. However, other services provided by ANC showed larger amounts 90 days past due. A cash receipt book is used for receiving cash and transactions are eventually being entered into QuickBooks. ANC provided RUBA with December 2009 and January 2010 bank reconciliations for their water and sewer account. An example of a typical purchase order and invoice was provided for the purchase of safety glasses from California Contractors Supply.

Tax Problems

Essential Indicators
Answer Question
Yes The utility has a system to accurately calculate, track, and report payroll tax liabilities.
Yes The utility is current on filing tax reports.
Yes The utility is current on making tax deposits.
Yes If there are any past due tax liabilities or recorded tax liens, a lien release has been issued or a repayment agreement has been signed and repayments are current.
Tax Problems Comments
A signed repayment agreement dated March 31, 2010 is in place for past due IRS tax liabilities. ANC is now in compliance with all federal gaming filing requirements through February 2010 and Quarterly Employment Tax filing requirements through December 2009. As of this writing ANC does not have a State of Alaska gaming permit and is not current on the fees owed to the Department of Revenue for gaming activities conducted without a permit from 2006 through 2009. The tribe has contacted the Department of Revenue and is attempting to get into compliance. On March 5, 2010 RUBA verified that ANC was current on State of Alaska Employment Security Compensation taxes for the fourth quarter of 2009.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
Yes The utility has adopted and uses a Personnel Policy, which has been reviewed by an attorney, AML or Commerce for topics and language.
Yes The utility has adequate written job descriptions for all positions.
No The utility has adopted and follows a written personnel evaluation process that ties the job description to the evaluation.
Yes The utility has an adequate written hiring process.
Yes The utility has personnel folders on every employee that contain at least: I-9, Job Application and Letter of Acceptance.
No The utility has a probationary period for new hires that includes orientation, job training/oversight, and evaluations.
Yes The utility provides training opportunities to staff as needed and available.
Personnel System Comments
ANC currently has workers compensation coverage with Liberty Northwest Insurance Corporation through March 27, 2011. A copy of the policy is in Bethel RUBA files. A copy of Akiachak Native Community Personnel Policies adopted June 15, 2004 is on file with RUBA. Job descriptions for their tribe's administrator, business manager, accountant, bookkeeper, water manager and water operator, along with copies of three 1-9s, were provided and are in RUBA files. ANC's administrative staff also provided Bethel RUBA staff with two examples of their employment verification forms which contained similar information as a letter of acceptance. Evaluations are not mentioned in the tribe's personnel policy and employees indicated evaluations do not occur. ANC should adopt and follow a written personnel evaluation process for their employees that ties job descriptions to the evaluation. An employee's performance should be reviewed and/or evaluated at least once a year. ANC provided the Bethel RUBA office with performance evaluations of two employees that were conducted on March 26, 2010. However these evaluations were generic in nature and not directly tied to the employees' job descriptions.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
Yes The policy making body is active in policy making of the utility.
Yes The policy making body enforces utility policy.
Yes The utility has an adequately trained manager.
Yes The utility has an adequately trained bookkeeper.
Yes The utility has an adequately trained operator or operators.
Yes The utility has adopted the necessary ordinances (or rules and regulations) necessary to give it the authority to operate.
Sustainable Indicators
Answer Question
No The utility has adopted an organizational chart that reflects the current structure.
Yes The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
Akiachak Native Community Water and Sewer Ordinance as well as Akiachak Piped Water and Sewer System Business Plan are in RUBA files. The business plan was completed in January of 2005 and contains the business manager's resume on page 33 and a utility organization chart on page 4. The tribal staff also provided a more current organization chart. However, verification that either chart had been adopted by the tribal council was not provided. ANC's lead water and sewer operator currently has an Operator in Training (OIT) certificate for water treatment and water distribution. His certification needs to be upgraded to the new provisional level certificate. ANC's assistant water and sewer operator has a provisional certificate. Both operators need to take the level II test to be in compliance for operating ANC's Class II water treatment facility.

Operation of Utility

Essential Indicators
Answer Question
Yes The utility operator(s) are actively working towards necessary certification.
Yes The utility has a preventative maintenance plan developed for the existing sanitation facilities.
Sustainable Indicators
Answer Question
Yes The manager receives a monthly O&M report from the utility operator and routinely "spot checks" the facilities to see that the maintenance items are being completed.
No The utility has a safety manual and holds safety meetings.
Yes Utility facilities have not suffered any major problems/outages due to management issues that are unresolved.
Yes The utility is operating at the level of service that was proposed.
Yes The operator provides status reports to the manager on a routine basis.
Yes The utility has completed and distributed its "Consumer Confidence Report".
Yes The utility is not on the "Significant Non-Complier" (SNC) list.
No The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
A preventative maintenance plan is on file with Bethel RUBA. The water and sewer facility has capacity to service seventy more residences. Construction to connect these residences is scheduled to start in the summer of 2010. An operator report was noted in the minutes of the January 2010 council meeting. On March 15, 2010 Bethel RUBA Staff contacted Akiachak's Remote Maintenance Worker (RMW) who indicated that ANC's water and sewer facility does not have a safety manual, inventory control list, or a critical spare parts list. A 2008 Consumer Confidence Report has been filed and the 2009 report is due in July.