THE DEPARTMENT OF TRANSPORTATION 

CAN IMPROVE OVERSIGHT OF THE

DENALI COMMISSION’S USE OF

FEDERAL TRANSPORTATION FUNDS

Federal Highway Administration

Report Number: MH-2011-038

Date Issued: February 9, 2011
U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: INFORMATION: The Department of 

Transportation Can Improve Oversight of the 

Denali Commission’s Use of Federal 

Transportation Funds

Federal Highway Administration

Report Number MH-2011-038

Date: February 9, 2011

From: Joseph W. Comé

Assistant Inspector General

for Highway and Transit Audits

Reply to 

Attn. of: JA-40

To: Federal Highway Administrator

Alaska’s size and the remoteness of its cities and villages present significant 

transportation challenges. In 2005, Congress created the Denali Access System 

Program (transportation program) to fund Alaskan road and waterfront 

development projects that provide economic opportunities and improve residents’ 

quality of life, health, and safety. Since 2006, the Federal Highway 

Administration (FHWA) and the Federal Transit Administration (FTA) have 

transferred more than $100 million to the Denali Commission (Commission), the 

independent Federal agency that selects the transportation projects. 

To gain a better understanding of how the Commission uses its Federal 

transportation funds, Senator Christopher S. Bond1

To conduct our work, we interviewed Federal, Alaska, and Commission officials; 

reviewed applicable laws, regulations, and policies; and analyzed DOT and 

Commission records in Washington, D.C., and Anchorage, Alaska. We conducted 

requested that the Office of 

Inspector General review the Department of Transportation’s (DOT) and the 

Commission’s administration of the program. Specifically, we (1) identified the 

purpose, funding, and status of the Commission’s projects funded through FHWA 

and FTA, (2) assessed the Commission’s project selection process, and 

(3) examined FHWA’s oversight of the Commission’s use of DOT funds.

 1 Ranking Member of the Senate Appropriations Subcommittee on Transportation, Housing, and Urban Development 

and Related Agencies.
2

this audit from November 2009 through November 2010 in accordance with 

generally accepted government auditing standards for performance audits. 

Additional details of our objectives, scope, and methodology are described in 

exhibit A.

RESULTS IN BRIEF

From 2006 through 2009,2 the Commission approved $92.7 million in grants for 

138 projects intended to enhance access to and facilitate economic growth in rural 

Alaska, as provided for in the Denali Commission Act.3 According to the 

financial assistance agreements for a statistical sample of projects, the 

transportation projects included funds to plan, engineer, and construct roads and 

develop waterfront ports, landings, and facilities. For example, a $545,150 grant 

funded a planning study for an access road in a remote settlement, and a $520,000 

grant funded a boat harbor rehabilitation project. Of the 138 projects approved, 91 

were in either the design or the construction phase, with 29 projects completed,

4

While the Denali Commission approved appropriate types of projects, its project 

selection policy and process were insufficient to ensure that selections were made 

objectively and were transparent. Although the Commission has project 

evaluation criteria, selecting officials did not use them for almost 20 percent of 

project selections that totaled $5.6 million. In those instances, the Commission 

used a discussion and consensus method that relied on the professional judgment 

of the selecting officials. However, documentation, such as detailed meeting 

minutes or transcripts, that explains the rationale for the selections is lacking. 

Moreover, the Commission’s limited ethics guidance does not ensure that project 

selection officials appropriately recuse themselves from the selection process. 

Additionally, selection officials are not required to, and do not, follow Federal 

conflicts of interest prevention measures, such as attending ethics training, signing 

ethics agreements, or submitting financial disclosure reports. As a result, the 

Commission has no mechanisms by which to verify and hold selection officials

accountable for appropriately recusing themselves. Nevertheless, we did not find

specific instances of conflicts of interest.

as 

of June 2010.

Further, Federal oversight of the transportation program was limited and we found 

shortfalls with required project documentation. FHWA primarily relies on the 

Commission, which in turn relies on the entities such as the Alaska Department of 

Transportation and Public Facilities, to maintain and self-report compliance with 

 2 All references are to fiscal years—October 1 through September 30. 3 Public Law 105-277. 4 For the purposes of this audit, we defined a complete project as one where all phases of work (planning, design, and 

construction) have been completed and final inspections have been conducted.
3

the Denali Commission Act’s project development and management requirements. 

Yet, neither FHWA nor the Commission adequately verified this information to 

ensure projects met Federal requirements. According to FHWA officials,

Commission projects are low risk compared to other agency responsibilities. 

Further, Commission officials informed us that implementing entities demonstrate 

compliance with Federal requirements by maintaining detailed project information 

on-site. However, when we requested such project information from four selected 

implementing entities, three did not provide evidence of their full compliance with 

the Denali Commission Act. For example, the U.S. Army Corps of Engineers 

(USACE) did not provide us the required project plans, specifications, and 

estimates document for a project that received $1 million in Commission funds.

We are making a series of recommendations for FHWA to assist the Commission 

in addressing these concerns. In responding to a draft of this report, FHWA 

concurred with our recommendations and provided a description of actions taken 

to address issues related to project selection and oversight. A complete discussion 

of FHWA's comments to our draft report begins on page 11.

BACKGROUND

In 1998, Congress established the Commission as an independent Federal agency 

to provide infrastructure, economic development, job training, and utilities in 

Alaska. The Safe, Accountable, Flexible, and Efficient Transportation Equity Act 

of 2005: A Legacy for Users (SAFETEA-LU)5 established the transportation 

program and, from 2006 through 2009, authorized FHWA and FTA to allocate

funds for road and waterfront projects to improve access and provide economic 

development opportunities for Alaskan communities and villages (see table 1).6

 5 Pub. L. 109-59. 6 In a recent appropriations decision, the Comptroller General concluded that FTA does not have an oversight role in 

administering funds transferred to the Commission. Comptroller General of the United States, B-319189, “Denali 

Commission—Transfer of Funds Made Available through the Federal Transit Administration's Appropriations,”

November 12, 2010.
4

Table 1: Transportation Program Funding by DOT Agency, 2006

through 2009

Projects Purpose Agency Funds Transferred

Road Planning, designing, engineering, and 

constructing road, and other surface 

transportation infrastructure

FHWA $15 million annually

Waterfront Docks, waterfront development projects, 

and related transportation infrastructure FTA $5 million annually

Waterfront Docks, waterfront development projects, 

and related transportation infrastructure FHWA $20 million total

Source: SAFETEA-LU, Pub. L. 109-59

Alaska’s size and the remoteness of its communities and villages present 

significant transportation challenges. The transportation program is designed to 

address these challenges. For example, the program funds the construction of

boardwalks to provide a safe road surface for all-terrain vehicles and lessen the 

environmental impact on tundra,

7

 7 Tundra is a level or treeless rolling plain that is characteristic of arctic and subarctic regions. Its soil has a 

permanently frozen subsoil called permafrost. Soil conditions are poor, being marshy or waterlogged.

which cannot easily support permanent roads. 

Similarly, the program funds waterfront improvement projects to enhance access 

to marine services and improve the safety and efficiency of cargo and fuel 

delivery. Many settlements receive cargo, supplies, and fuel only by air or at 

small barge landing facilities. Figure 1 shows before and after images of a 

Commission-funded waterfront development project in Yakutat Borough, Alaska.

Figure 1. Multi-Purpose Dock Project, Yakutat Borough, Alaska

Fall 2008 Spring 2009

Source: Denali Commission
5

The Commission relies on the Transportation Advisory Committee (TAC) to 

select transportation projects. The Commission’s Federal Co-Chair approves the 

project selections for funding. The TAC members include:

• the Federal Co-Chair, who is appointed by the U.S. Secretary of Commerce, 

and

• eight appointees of the Governor of Alaska—four representatives of regional 

native corporations, non-profit entities, or tribal governments and four 

representatives of rural Alaska regions or villages.

The Commission does not directly implement transportation projects. Instead, 

other entities, including USACE; FHWA’s Western Federal Lands Highway 

Division Office; Alaska Department of Transportation and Public Facilities; and 

regional, local, and tribal governments, implement Commission projects supported 

with Federal funds.

COMMISSION PROJECT SELECTIONS ARE CONSISTENT WITH 

THE DENALI COMMISSION ACT

The Commission selected transportation projects intended to enhance access and 

facilitate economic growth by improving rural infrastructure in Alaska, as 

provided for in the Denali Commission Act (exhibit B lists each project, the 

associated Commission-awarded funds, and the project’s status). According to the 

financial assistance agreements for a statistical sample of 32 of 138 projects, the 

Commission selected projects to plan, engineer, and construct roads and develop 

waterfront ports, landings, and facilities that will enhance access and facilitate 

economic development. Because our review was limited to determining the 

purpose, status, and funding of the Commission's transportation projects, we did 

not assess how effectively each implementing entity used the Federal funds on 

individual projects.

From 2006 through 2009, FHWA and FTA allocated $97.3 million to the 

Commission.8

 8 For 2010, Congress appropriated an additional $21.3 million to DOT ($16.3 million to FHWA and $5 million to 

FTA) for the Commission’s transportation program. These funds were outside our audit scope.

After deducting its allowable 5 percent for administrative 

expenses, the Commission approved $92.7 million for 75 road and 63 waterfront 

development projects (see table 2). Of the 138 projects, 91 were in either the 

design or the construction phase, with 29 projects completed, as of June 2010.
6

Table 2: Transportation Projects and Federal Funds

Type of Project Number of Projects Federal Funds

Road 75 $58,508,483

Waterfront Development 63 $34,259,739

Total 138 $92,768,222

Source: Denali Commission

Commission-funded transportation projects selected from 2006 through 2009 cost 

from $15,000 to $3.5 million each, with an average cost of about $672,000. Road 

improvement projects averaged about $780,000 each, and waterfront development 

projects averaged about $544,000 each. Examples of road and waterfront projects 

with their Commission funding are shown in table 3.

Table 3: Examples of Commission-funded Road and Waterfront 

Development Projects

Location Population Project Purpose

Commission 

Funds

Stevens Village, Central Alaska 87 Planning study for an access 

road $545,150

City of Bethel, Western Alaska 5,471 Boat harbor rehabilitation $520,000

Village of Tatitlek, Southern Alaska 107 Dock design and repair $367,000

City of Cordova, Southern Alaska 2,454 Dust control on roads $311,000

City of Kodiak, Southern Alaska 6,334 Cargo terminal repair $300,000

Source: U.S. Census Bureau and Denali Commission

PROJECT SELECTION PROCESS LACKS OBJECTIVITY AND 

TRANSPARENCY

While we did not identify specific conflicts of interest, the Commission's policy 

and process were insufficient to ensure that transportation project selections are 

objective and transparent. Although the Commission has project evaluation 

criteria, the TAC did not use them for almost 20 percent of its project selections.

In addition, the Commission did not document the basis for these selections. 

Moreover, the Commission’s limited ethics guidance did not ensure that TAC 

members appropriately recused themselves from the project selection process.
7

The Commission lacks a policy that defines the circumstances under which the 

TAC should use one of its two project selection methods—scoring and ranking or 

discussion and consensus.

• Scoring and Ranking: TAC members score proposed projects using the 

Commission’s evaluation criteria—health and quality of life, safety, public 

support, and economic value—then rank projects using a weighted average of 

the members’ scores for each criterion (exhibit C lists the evaluation criteria).

• Discussion and Consensus: TAC members rely solely on their professional 

judgment to select projects.

From 2006 through 2009, the TAC used the scoring and ranking method to select 

about 80 percent of its projects and used the less objective and transparent

discussion and consensus method to select almost 20 percent of the projects (see 

table 4 for the number, percentage, and funding of projects by selection method). 

The scoring and ranking method analyzes each project based on a list of 

characteristics included in Commission guidance for grant applicants and the 

TAC. Each characteristic is weighted to indicate its importance in the project 

selection process. The guidance also provides assessment criteria to assist each 

TAC member in scoring and ranking project applications. The Commission 

publishes this guidance on its website. In contrast, selections made using the 

discussion and consensus method are based on subjective input from TAC 

members, rather than predetermined, published criteria.

Table 4: Commission-funded Road and Waterfront Development 

Projects, by Selection Method, 2006 through 2009

Selection Method Number of Projects

Percentage of 

Projects

Commission 

Funds

Scoring and Ranking 111 80.4% $87.1 million

Discussion and Consensus 27 19.6% $5.6 million

Total 138 100.0% $92.7 million

Source: OIG analysis of Commission data

Commission officials stated that the TAC uses discussion and consensus primarily 

to select projects for worthy recipients that lack the capacity to produce a 

competent project application, as well as for planning and technical services 

projects. However, we could not verify why the TAC used the discussion and 

consensus method for 27 projects because the Commission did not document the 

specific reasons for using this method or the rationale for selecting these projects. 

For example, meeting minutes did not explain why the TAC selected a 
8

$1.5 million barge landing system design project in 2009 or make mention of a 

$50,000 public dock reconnaissance project selected in 2008. The lack of 

documentation limits the transparency of how and why the TAC selects projects.

Moreover, the Commission’s limited ethics guidance does not ensure that TAC 

members appropriately recuse themselves from the project selection process. The

guidance merely advises TAC members to recuse themselves from voting when

they, their employer, or a family member might benefit from a project selection. 

Commission officials stated that recusals occurred and were documented in TAC 

meeting minutes. However, our review of TAC meeting minutes covering project 

selections from 2006 through 2009 found no mention of recusals. Commission 

officials could not explain why the minutes did not document the recusals.

TAC members are not required to, and do not, follow Federal conflicts of interest 

prevention measures, such as attending ethics training, signing ethics agreements, 

or submitting financial disclosure reports. According to the Commission’s 

designated agency ethics official, TAC members are not special government 

employees,

9

FHWA RELIES ON THE COMMISSION’S LIMITED OVERSIGHT TO 

ENSURE COMPLIANCE WITH FEDERAL REQUIREMENTS

and therefore, are not required to comply with the Federal measures. 

We do not contest the ethics official’s interpretation. However, without such 

conflicts of interest prevention measures, the Commission has no mechanisms by 

which to verify and hold TAC members accountable for appropriately recusing 

themselves. The Federal requirements represent sound practices that could help

the Commission ensure selection decisions are free from conflicts of interest. For 

example, annual ethics training would ensure that TAC members are advised of 

their responsibility to avoid the appearance of and actual conflicts of interest in 

carrying out their duties. Requiring TAC members to certify that conflicts of 

interest are fully disclosed prior to project selection activities would enable the 

Commission to hold the TAC accountable for complying with the guidance.

Neither FHWA nor the Commission adequately verified the implementing entities' 

compliance with the requirements of the Denali Commission Act through actions 

such as on-site inspections and review of supporting documentation. Instead, 

FHWA primarily relies on the Commission, which in turn relies on the entities 

implementing the projects, to maintain and self-report compliance with Federal 

project management requirements. The Commission applies the project 

management requirements included in Federal-aid highway law—Title 23 United 

States Code (23 U.S.C.)—to all transportation projects. These requirements 

 9 A special government employee is an officer or employee of the Executive or Legislative Branch of the 

U.S. Government, who can perform, with or without compensation, temporary duties for not more than 130 days 

during any period of 365 consecutive days.
9

include the completion of environmental assessments and certifications, project 

plans, specifications, and cost estimates and the effective management of project 

construction. For example, developing a right-of-way plan is a required step when 

constructing a public road on private property.

FHWA performs a limited role in the oversight of transportation projects, relying 

on the Commission to determine compliance with 23 U.S.C. requirements. 

However, FHWA still must ensure the Commission's oversight is appropriate and 

effective. FHWA's limited oversight includes the review of periodic reports from 

the Commission summarizing project development and construction activities. 

FHWA staff members also attend TAC meetings, communicate informally with 

the Commission on project activities, and conduct occasional site visits. 

Commission officials stated that FHWA acts as an advisor on policy and program 

development procedures. According to FHWA Alaska Division officials, their 

oversight of projects is minimal because of the projects' relatively low funding and 

their placement outside the Division Office’s top 10 program risks. For example, 

the Division Office considers Alaska’s $291 million Federal-aid highway formula 

funds10

Currently, the Commission relies primarily on the entities implementing the 

projects, such as USACE or tribal governments, to maintain and self-report 

compliance. According to Commission officials, their oversight consists of 

informal interactions with the implementing entities through telephone 

conversations, site visits, e-mails, community meetings, and observations of

bidding for construction contracts. However, the Commission does not routinely 

verify the information entities provide. Our review of Commission files for 32 of 

138 transportation projects confirmed that the Commission did not routinely verify 

the information the entities provided, but rather relied on self-reported 

information. The files consisted mostly of documents provided by the 

implementing entities. Commission officials told us that the 5 percent cap on 

Commission administrative expenses constrained their travel to remote sites.

a higher risk than the $25 million annual funding for Commission projects.

Although Commission officials told us the implementing entities demonstrate their 

compliance with 23 U.S.C. by maintaining detailed project information on-site, the 

information we reviewed for four projects from our sample did not fully

demonstrate such compliance. Specifically, we requested that the implementing 

entities for the selected projects11

 10 The 2009 obligation limitation distribution pursuant to Division I, Title I, Section 120 of the Omnibus 

Appropriations Act, 2009, Pub. L. 111-8.

provide us with the requisite documentation, 

such as environmental surveys and assessments, project plans, project schedules, 

structural designs, and safety assessments. In response, each implementing entity

11 We requested information from USACE, Western Federal Lands Highway Division Office, the Alaska Department 

of Transportation and Public Facilities, and the city of Sitka.
10

provided varying amounts of documentation—with all four providing

environmental surveys and assessments. However, three of the four provided 

insufficient documentation to fulfill the requirements of 23 U.S.C. (see table 5 for 

details). For example, when we requested documentation from USACE on the 

Chignik Small Boat Harbor, USACE did not provide the approved plans;

specifications; and costs estimates document, which includes such details as the 

project design, scope, materials, schedule, and measurements. Without 

documentation to demonstrate compliance, the Commission cannot ensure that 

projects are fiscally sound, efficient, and effective.

Table 5: Selected Implementing Entities’ Documentation of 

23 U.S.C. Compliance

Implementing Entity Project Name

Commission 

Funds Title 23 Compliance Issues

Western Federal Lands 

Highway Division Office Coffman Cove Dock $1.65 million Documentation demonstrated compliance

City of Sitka Old Thomsen Harbor 

Replacement $1.30 million Plans, specifications, and cost 

estimates not provided

USACE Chignik Small Boat 

Harbor $1.00 million Plans, specifications, and cost estimates not provided

Alaska Department of 

Transportation and 

Public Facilities

Gustavus Transient 

Vessel Mooring Facility $0.81 million Plans, specifications, and cost 

estimates not provided

Source: OIG analysis

CONCLUSION

Congress directed the Denali Commission to implement a road and waterfront 

development program using funds allocated from DOT to improve access to vital 

services in rural Alaska. While FHWA does not have direct oversight of this

program, FHWA has a stewardship responsibility, along with the Commission, to 

ensure that Federal funds are spent wisely. Therefore, FHWA should play a role 

in ensuring that project selections are objective and transparent, conflicts of 

interest are disclosed and mitigated, and projects comply with applicable statute. 

We recognize the need for FHWA to allocate its oversight resources according to 

risk and that this program is far smaller than some others for which FHWA is 

responsible. However, targeted advice and assistance to the Commission, based 

on FHWA’s experience overseeing transportation projects, would strengthen its 

capability to ensure that Federal transportation funds are spent efficiently, 

effectively, and appropriately.
11

RECOMMENDATIONS

To ensure that the project selection process is objective and transparent, we 

recommend that the Federal Highway Administrator advise the Commission to:

1. Eliminate the discussion and consensus method or define limited 

circumstances in which its use is appropriate.

2. Maintain detailed minutes, such as transcripts, of TAC project selection and 

funding discussions, including recusals from scoring and voting and the basis 

for each recusal.

To ensure TAC members’ selection decisions are free from conflicts of interest, 

we recommend that the Federal Highway Administrator collaborate with the 

Commission to:

3. Establish annual training for TAC members on how to avoid the appearance of 

or actual conflicts of interest,

4. Develop a requirement for TAC members to certify that the appearance of or 

actual conflicts of interest are fully disclosed prior to project selection 

activities, and 

5. Design mechanisms for Commission staff to verify that TAC members 

participate in annual training, fully disclose conflicts of interest, and recuse 

themselves appropriately.

To ensure that the Commission receives the information and documentation 

necessary to determine whether transportation projects are constructed in a fiscally 

sound, efficient, effective, and appropriate manner, we recommend that the 

Federal Highway Administrator collaborate with the Commission to:

6. Develop an oversight process that specifies the Commission’s responsibilities 

and actions to verify that grantee-supplied information demonstrates 

compliance with applicable 23 U.S.C. requirements.

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE

We provided FHWA a draft of this report on November 24, 2010, and received 

formal, written comments on January 26, 2011. FHWA's comments are included 

as an appendix to this report. FHWA fully concurred with our recommendations, 

and provided documentation demonstrating the actions it has taken to assist the 
12

Commission in addressing the project selection and oversight issues raised in this 

report. Accordingly, we consider all recommendations closed.

Although FHWA has a limited oversight role, it promptly addressed the 

recommendations in this report. FHWA reported that the Commission is

developing a set of provisions that more clearly define the appropriate use of the 

discussion and consensus method of project selection. FHWA advised the 

Commission on the importance of maintaining detailed minutes of TAC meetings,

including TAC member recusals from scoring and voting and the basis for each 

recusal. FHWA has also advised the Commission that the Federal model for 

avoiding conflict of interest represents sound practices that could better assure 

selection decisions are free from actual or perceived conflicts of interest, and 

provided relevant training materials for the Commission's review and 

consideration. The Commission is revising its TAC Roles and Responsibilities to 

require that members receive annual ethics training and certify when a member 

has a conflict of interest. According to the Commission, the conflicts of interest 

certifications will be retained in the record of each TAC proceeding. FHWA 

states that it will continue to collaborate with the Commission to achieve a 

strengthened conflict of interest process and ethics training program.

FHWA acknowledges that although the Commission has processes and 

agreements in place to address compliance with 23 U.S.C., those oversight 

processes can be strengthened. FHWA provided the Commission FHWA's

program and risk analysis standard operating procedures to be used as a 

framework for improving the Commission's procedures. FHWA has committed to

provide continuing technical assistance to help the Commission further strengthen 

its oversight review and processes.

ACTIONS REQUIRED

Based on actions FHWA has taken, and our review of the documentation provided 

in response to our draft report, we consider all recommendations resolved. No 

further actions are required, and we are issuing this final report with all 

recommendations closed.

We appreciate the courtesies and cooperation of DOT representatives and officials 

of the Denali Commission during this audit. If you have any questions concerning 

this report, please call me at (202) 366-5630, or Gary Middleton, Program 

Director, at (202) 366-0625.

#

cc: Federal Transit Administrator

Audit Liaison, OST
13

Exhibit A. Objectives, Scope, and Methodology

EXHIBIT A. OBJECTIVES, SCOPE, AND METHODOLOGY

Our audit objective was to review the Department of Transportation’s (DOT) and 

the Denali Commission’s (Commission) use of Federal transportation funds. 

Specifically, we (1) identified the purpose, funding, and status of the 

Commission’s projects funded through FHWA and FTA; (2) assessed the 

Commission’s project selection process; and (3) examined FHWA’s oversight of 

the Commission’s use of DOT funds.

To assess the Commission’s use of FHWA and FTA funds and DOT’s oversight 

of the Commission, we reviewed Federal laws and regulations pertaining to the 

Commission’s transportation program. We evaluated the Commission’s 

transportation program policies, guidance, procedures, and practices for selecting

projects and awarding grants. We interviewed Commission officials in 

Anchorage, Alaska, as well as officials in FHWA Headquarters and Alaska 

Division Office in Juneau Alaska; Western Federal Lands Highway Division 

Office in Vancouver, Washington; FTA Headquarters and Region 10 in Seattle, 

Washington; the U.S. Army Corps of Engineers at Elmendorf Air Force Base, 

Alaska; the U.S. Office of Government Ethics; and the Alaska Department of 

Transportation and Public Facilities in Anchorage, Alaska. We did not assess how 

effectively each implementing entity was using the Federal funds on individual 

projects.

With OIG’s senior statistician, we selected a statistical sample of 32 of the 138 

Commission transportation projects from 2006 through 2009. In reviewing the

sample projects’ financial assistance agreements, we found that all were consistent 

with the purposes of the Denali Commission Act. Therefore, we estimate that all 

the 2006 through 2009 projects are consistent with the purposes of the Act. This

estimate has a 5-percent sampling error at the 90-percent confidence level, which 

means that we are 90 percent certain that the percentage of project funds that is not 

consistent with the Act is between 0 and 5 percent.

To verify the reliability of the project information in exhibit B, we compared the 

Commission’s list of transportation projects, including each project’s status, with

source documentation at the Commission’s offices and in the Commission’s 

electronic reporting system. We also compared the Commission’s funding data 

with information from FHWA and FTA and found no significant discrepancies.

To assess the Commission’s assertion that 23 U.S.C. compliance requirements are 

supported by detailed records maintained by the implementing entities, we 

analyzed the records for four projects selected from our statistical sample of 32 

projects. We selected the projects in a three-stage process. We first grouped the 

projects by implementing entity (Western Federal Lands Highways Division, the 

U.S. Army Corps of Engineers, the Alaska Department of Transportation and 
14

Exhibit A. Objectives, Scope, and Methodology

Public Facilities, and small individual grantees). We then identified the most 

complete projects within each implementing entity. From the list of most 

complete projects, we then selected the project with the largest dollar amount from 

each implementing entity group. Because our review of the implementing entities’

records was limited, we are not projecting the results to all Commission projects.

To assess how the Commission addresses ethics issues, we interviewed 

knowledgeable individuals at the U.S. Office of Government Ethics, the 

Commission’s designated agency ethics official, and OIG’s legal advisors. We 

also evaluated Transportation Advisory Committee meeting minutes and project 

lists to determine whether the discussion and consensus process and recusals based 

on conflicts of interest were adequately documented.

We conducted this performance audit from November 2009 through 

November 2010 in accordance with generally accepted government auditing

standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our audit 

objectives.
15

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

EXHIBIT B. COMMISSION-FUNDED TRANSPORTATION 

PROJECTS BY IMPLEMENTING ENTITY, FISCAL YEARS 2006 

THROUGH 2009

Implementing Entity Road Project

Commission 

Funds

June 2010 

Project 

Status*

Project 

Selection 

Method

Alaska Department of 

Transportation and 

Public Facilities

Akutan Marine Link to 

Airport $1,000,000 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

AUTC DOT&PF Dust 

Control Research $239,965 Design Discussion 

and consensus

Alaska Department of 

Transportation and 

Public Facilities

Cantwell Community 

Roads $664,229 Complete Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Circle/Circle City 

Community Roads $900,000 Construction Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Coffman Cove Road 

Paving $3,000 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Coffman Cove Roads 

Paving $848,280 Construction Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Cold Bay Road 

Improvements $136,455 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Eagle, Eagle Village 

Community Roads $1,182,610 Construction Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Elfin Cove Boardwalk 

Design, Construction, 

and Repairs

$181,940 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Emmonak Community 

Roads $1,819,400 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Fort Yukon Dust Control 

Design and Construction $1,819,400 Construction Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Pelican Board-Road 

Reconstruction Phase I $272,910 Complete Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Pelican Board-Road 

Reconstruction Phase II $267,547 Complete Scoring and 

ranking
16

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity Road Project

Commission 

Funds

June 2010 

Project 

Status*

Project 

Selection 

Method

Alaska Department of 

Transportation and 

Public Facilities

Pelican Board-Road 

Reconstruction Phase III $393,886 Construction Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Port Alexander 

Boardwalk $181,940 Complete Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Port Alexander South 

Cedar Street Boardwalk $254,716 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Selawik-Skin Street 

Barge Landing Road 

Reconstruction

$727,760 Complete Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Takotna Gold Creek 

Bridge Replacement $272,910 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Tanana Community 

Roads Dust Control $41,883 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Togiak Main Road 

Rehabilitation $727,760 Cancelled/On 

Hold 

Scoring and 

ranking

Alaska Native Tribal 

Health Consortium

Nunam Iqua Board-Road 

Design $354,350 Design Scoring and 

ranking

Alaska Native Tribal 

Health Consortium

Pitka’s Point Sanitation 

Road $460,000 Construction Scoring and 

ranking

Alaska Village Electric 

Cooperative

Hooper Bay Access 

Road Construction $199,531 Complete Scoring and ranking

Alaska Village Electric 

Cooperative

Hooper Bay Wind 

Turbine Access Road 

Construction

$215,000 Complete Discussion 

and consensus

Association of Village 

Council Presidents

Bethel and Oscarville 

Road Reconnaissance 

Engineering

$150,000 Planning Discussion 

and consensus

Association of Village 

Council Presidents

Nunam Iqua Boardwalk 

Construction and 

Extension

$100,000 Construction Scoring and 

ranking

Association of Village 

Council Presidents

Pilot Station Community 

Streets Rehabilitation $165,000 Design Scoring and 

ranking

Association of Village 

Council Presidents

Regional Roads Planning 

and Reconnaissance $100,000 Construction Discussion 

and consensus

Bristol Bay Native 

Association

Clarks Point- Ekuk Road 

(Road Recon) $50,000 Planning Scoring and ranking
17

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity Road Project

Commission 

Funds

June 2010 

Project 

Status*

Project 

Selection 

Method

Bristol Bay Native 

Association

Pilot Point Dago Creek 

Road Realignment $151,455 Design Scoring and 

ranking

Chenega Indian 

Reorganization Act 

Village Council

Community Streets 

Rehabilitation/Harbor 

Access

$1,308,360 Complete Scoring and 

ranking

City and Borough of 

Sitka

Indian River Road 

Rehabilitation $750,000 Complete Scoring and ranking

City of Cordova Dust Control with Roads 

Surfacing $311,000 Complete Scoring and ranking

City of Sand Point School Loop Road 

Rehabilitation $1,500,000 Design Scoring and ranking

Craig Community 

Association

Community Streets 

Rehabilitation $1,000,000 Construction Scoring and ranking

Craig Community 

Association

Port Saint Nicholas Road 

Reconstruction $1,000,000 Complete Scoring and ranking

Dept. of Commerce, 

Community, and 

Economic 

Development

Ortho Mapping $160,000 Planning Discussion 

and consensus

Gulkana Village 

Council

Gulkana Access Road 

Reconstruction $1,800,000 Design Scoring and ranking

Igiugig Tradition 

Council

Igiugig High Ridge 

Subdivision Road $81,000 Construction Scoring and ranking

Kawerak, Inc. Brevig Mission 

Community Streets $1,000,000 Construction Scoring and ranking

Kawerak, Inc. Gambell Evacuation 

Road $1,000,000 Construction Scoring and ranking

Kawerak, Inc. Koyuk Community 

Streets $1,000,000 Complete Scoring and ranking

Kawerak, Inc. Shaktoolik Evacuation 

Road $55,000 Planning Scoring and ranking

Kawerak, Inc. Unalakleet Community 

Roads $1,700,000 Construction Scoring and ranking

Kawerak, Inc.

Unalakleet Community 

Streets Improvements 

Design

$144,616 Design Scoring and 

ranking

Kodiak Island Borough Kodiak Island 

Transportation Study $125,000 Planning Discussion 

and consensus

Nenana Native Council 9th and K Streets 

Reconstruction Phase II $1,427,425 Construction Scoring and 

ranking

North Slope Borough Anaktuvuk Pass Bridge 

Design $147,431 Design Scoring and ranking
18

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity Road Project

Commission 

Funds

June 2010 

Project 

Status*

Project 

Selection 

Method

Selawik Selawik Boardwalk 

Reconstruction $270,000 Design Scoring and ranking

Stevens Indian 

Reorganization Act 

Village Council

Stevens Village 

Community Roads $1,000,000 Design Scoring and 

ranking

U.S. Army Corps of 

Engineers

Manley Hot Springs 

Landing Sanitary Facility 

Replacement 

$50,000 Design Scoring and 

ranking

U.S. Army Corps of 

Engineers

Platinum Public Dock 

Conceptual Design, 

Goodnews Bay Road 

Connection Feasibility

$300,000 Planning Scoring and 

ranking

U.S. Army Corps of 

Engineers

Statewide Technical 

Services $150,000 Construction Discussion 

and consensus

Western Federal Lands 

Highway Division

Akhiok Tsunami Shelter 

Road $363,000 Construction Scoring and 

ranking

Western Federal Lands 

Highway Division

Akhiok, Chefornak, 

Hooper Bay and 

Kwigillngok - Subsistence 

ATV Road Recon

$32,925 Design Discussion 

and consensus

Western Federal Lands 

Highway Division

Akiak Roads 

Rehabilitation $3,500,000 Design Scoring and 

ranking

Western Federal Lands 

Highway Division

Atka Roads 

Rehabilitation $1,000,000 Construction Scoring and 

ranking

Western Federal Lands 

Highway Division

Atmautluak, Nunapitchuk 

Tramway Railroad 

Renovation

$1,810,000 Construction Discussion 

and consensus

Western Federal Lands 

Highway Division

Chignik Lagoon Lake IRT 

Road Survey $150,000 Planning Discussion 

and consensus

Western Federal Lands 

Highway Division

Gakona Access Road 

Rehabilitation $2,400,000 Design Scoring and 

ranking

Western Federal Lands 

Highway Division

IRT Chigniks Road 

Survey $150,000 Design Scoring and 

ranking

Western Federal Lands 

Highway Division Kalskag to Yukon River $100,000 Planning Discussion 

and consensus

Western Federal Lands 

Highway Division

King Cove Street 

Improvement $1,893,537 Construction Scoring and 

ranking

Western Federal Lands 

Highway Division

Kivalina Evacuation and 

Relocation Road 

Reconnaissance

$138,668 Planning Discussion 

and consensus

Western Federal Lands 

Highway Division

Kobuk-Snowmobile 

Bridges $927,090 Construction Scoring and 

ranking
19

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity Road Project

Commission 

Funds

June 2010 

Project 

Status*

Project 

Selection 

Method

Western Federal Lands 

Highway Division

Kwethluk Airport Roads 

Improvements and 

Extensions

$2,500,000 Design Scoring and 

ranking

Western Federal Lands 

Highway Division

Kwigillingok Kuicuaq 

Slough ATV Trail $150,000 Construction Discussion 

and consensus

Western Federal Lands 

Highway Division

Manley Hot Springs 

Community Streets $2,150,000 Design Scoring and 

ranking

Western Federal Lands 

Highway Division

Manokotak Heights Road 

Reconstruction $3,500,000 Design Scoring and 

ranking

Western Federal Lands 

Highway Division

McGrath Road 

Reconstruction $1,986,354 Design Scoring and 

ranking

Western Federal Lands 

Highway Division

Metlakatla Walden Point 

Road $1,050,000 Complete Scoring and 

ranking

Western Federal Lands 

Highway Division

Shaktoolik Evacuation 

Road $1,000,000 Design Discussion 

and consensus

Western Federal Lands 

Highway Division

Statewide Technical 

Services $300,000 Construction Discussion 

and consensus

Western Federal Lands 

Highway Division

Stevens Village Access 

Road $545,150 Design Scoring and 

ranking

Western Federal Lands 

Highway Division

Tununak ATV Geo-Tech 

Trail $2,700,000 Design Scoring and 

ranking

Total Road Projects $58,508,483

60 scoring and ranking

15 discussion and 

consensus

* Project Status Terms

Planning: Includes investigation of transportation needs, planning and reconnaissance engineering 

studies, dock and other waterfront development analyses, final mapping, and research.

Design: Includes pre-construction activities, including preliminary engineering; NEPA studies; right-ofway and utilities analysis; plans, specifications, and estimates; and construction contract document 

development.

Construction: Includes construction contract bidding, selection, award, and execution. Project plans are 

complete and projects are ready to go or underway.

Complete: All phases of work have been completed and final inspections conducted.

Cancelled/On Hold: The sponsor is unable to execute the selected project; or projects that have not 

proceeded and might be re-scoped or cancelled.

Source: OIG analysis of Commission data.
20

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity

Waterfront 

Development Project

Commission 

Funds

June 2010 

Project 

Status *

Project 

Selection 

Method

Alaska Department of 

Transportation and 

Public Facilities

Gustavus Small Boat 

Float Design $95,200 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Gustavus Transient 

Vessel Mooring Facility $812,500 Construction Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Naukati Small Boat Float $54,582 Design Scoring and 

ranking

Alaska Department of 

Transportation and 

Public Facilities

Whale Pass Small Boat 

Float $54,582 Design Scoring and 

ranking

Alaska Energy 

Authority

Community and Barge 

Landing Roads Design $71,159 Design Scoring and 

ranking

Alaska Energy 

Authority

Kwethluk Barge Landing 

and Jay Hammond Road $36,584 Design Scoring and 

ranking

Alaska Village Electric 

Cooperative

Mekoryuk Harbor 

Repairs, Dredging, and 

Construction

$571,450 Complete Scoring and 

ranking

Aleutians East 

Borough

False Pass Boat Harbor 

Rehabilitation and 

Expansion

$1,020,000 Complete Scoring and 

ranking

Association of Village 

Council Presidents

Atmautluak Float Dock 

Replacement $15,000 Construction Scoring and 

ranking

Association of Village 

Council Presidents

Kongiganak Barge 

Landing $500,000 Construction Scoring and 

ranking

Bristol Bay Borough Port of Bristol Bay Dock 

Expansion and Repair $1,700,000 Construction Scoring and 

ranking

City and Borough of 

Juneau

Auke Bay Commercial 

Landing Facility $1,000,000 Complete Scoring and ranking

City and Borough of 

Sitka

Old Thomsen Harbor 

Replacement $1,300,000 Construction scoring and ranking

City of Akutan Port and Ferry Dock 

Improvement $434,000 Design Scoring and ranking

City of Bethel

Boat Harbor 

Rehabilitation Port MultiFacility Improvement and 

Upgrade

$520,000 Complete Scoring and 

ranking

City of Bethel Brown’s Slough Bank 

Stabilization $570,000 Complete Scoring and ranking

City of Cordova Boat Haulout Structures $829,000 Construction Scoring and 

ranking
21

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity

Waterfront 

Development Project

Commission 

Funds

June 2010 

Project 

Status *

Project 

Selection 

Method

City of Dillingham Small Boat Harbor 

Ramps $350,000 Construction Scoring and ranking

City of Haines Haines Harbor Floats $800,000 Complete Scoring and 

ranking

City of Hoonah Marine Industrial Center 

Phase II $300,000 Complete Scoring and ranking

City of Ketchikan Knudson Cove Harbor 

Rehabilitation $413,000 Complete Scoring and ranking

City of Ketchikan Waterfront 

Reconfiguration $1,600,000 Complete Scoring and ranking

City of King Cove North Old Boat Harbor 

Reconstruction $1,500,000 Construction Scoring and ranking

City of Kodiak Pier 3 Cargo Terminal 

Repair $300,000 Complete Scoring and ranking

City of Nenana Nenana Tug and Barge 

Port $850,000 Construction Scoring and ranking

City of Nome Low-Level Dock Float $1,000,000 Complete Scoring and 

ranking

City of Old Harbor Small Boat Harbor 

Renovations $1,200,000 Construction Scoring and ranking

City of Pelican Harbor Tee Floats $100,000 Complete Scoring and 

ranking

City of Seward East Harbor 

Reconstruction $1,000,000 Construction Scoring and ranking

City of Skagway Boat Harbor Wave 

Attenuator $500,000 Complete Scoring and ranking

City of Thorne Bay Davidson Landing 

Harbor Repairs $100,000 Complete scoring and ranking

City of Wrangell Heritage Harbor 

Transient Floats $1,000,000 Construction Scoring and ranking

Kawerak, Inc.

Diomede Island Marine 

Facilities Preliminary 

Engineering

$600,000 Design Scoring and 

ranking

Lake and Peninsula 

Borough

Lake Iliamna Multiple 

Community Barge 

Landings

$300,000 Design Scoring and 

ranking

North Pacific Rim 

Housing Authority

Chenega Bay Small Boat 

Harbor Rehabilitation $1,138,813 Construction Scoring and 

ranking

North Pacific Rim 

Housing Authority

Tatitlek Dock Design 

Repairs $367,000 Complete Scoring and ranking
22

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity

Waterfront 

Development Project

Commission 

Funds

June 2010 

Project 

Status *

Project 

Selection 

Method

North Slope Borough

Wainwright Lagoon Boat 

Ramp, Boat Launch 

Ramp

$379,212 Construction Scoring and 

ranking

Organized Village of 

Kake Multi-Use Dock $1,000,000 Construction Scoring and ranking

U.S. Army Corps of 

Engineers

Barge Landing Design -

Aniak $150,000 Design Discussion and consensus

U.S. Army Corps of 

Engineers

Barge Landing Design -

Chuathbaluk $122 Cancelled/On Hold 

Discussion 

and consensus

U.S. Army Corps of 

Engineers

Barge Landing Design -

Kipnuk $935 Cancelled/On Hold 

Discussion 

and consensus

U.S. Army Corps of 

Engineers

Barge Landing Design -

Kongiganak $16,136 Design Discussion and consensus

U.S. Army Corps of 

Engineers

Barge Landing Design -

McGrath $24,683 Design

Discussion 

and consensus

U.S. Army Corps of 

Engineers

Barge Landing System 

Design - Statewide 

Design

$676,105 Construction Discussion 

and consensus

U.S. Army Corps of 

Engineers

Barge Landing System 

Design - Statewide

Mooring Points

$1,500,000 Construction Discussion 

and consensus

U.S. Army Corps of 

Engineers Chevak Mooring Points $270,000 Construction Scoring and ranking

U.S. Army Corps of 

Engineers

Chignik Small Boat 

Harbor and Harbor 

Dredging

$1,000,000 Construction Scoring and 

ranking

U.S. Army Corps of 

Engineers

Cordova Harbor Storm 

Breakwater $116,889 Design Scoring and ranking

U.S. Army Corps of 

Engineers Eek Barge Landing $300,000 Design Scoring and ranking

U.S. Army Corps of 

Engineers Elim Barge Landing $300,000 Design Discussion and consensus

U.S. Army Corps of 

Engineers

Kwinhagak Quinhagak 

Harbor Entrance 

Improvements

$200,000 Planning Discussion 

and consensus

U.S. Army Corps of 

Engineers

Nanwalek Safe Harbor 

Study $140,000 Planning Discussion and consensus

U.S. Army Corps of 

Engineers

Nondalton Dock and 

Launch Ramp $150,000 Planning Scoring and ranking

U.S. Army Corps of 

Engineers

Pelican Harbor 

Rehabilitation 

Construction

$1,017 Cancelled/On 

Hold 

Scoring and 

ranking
23

Exhibit B. Commission-Funded Transportation Projects by 

Implementing Entity, Fiscal Years 2006 through 2009

Implementing Entity

Waterfront 

Development Project

Commission 

Funds

June 2010 

Project 

Status *

Project 

Selection 

Method

U.S. Army Corps of 

Engineers

Perryville Dock 

Conceptual Design $87,604 Design Scoring and ranking

U.S. Army Corps of 

Engineers

Port Graham Public Dock 

Reconnaissance $50,000 Planning Discussion 

and consensus

U.S. Army Corps of 

Engineers

Port Lions City Dock and 

Ferry Terminal Repairs $50,000 Planning Discussion 

and consensus

U.S. Army Corps of 

Engineers

Saint Paul Harbor 

Improvements - Phase III 

Small Boat Harbor

$600,000 Design Scoring and 

ranking

U.S. Army Corps of 

Engineers

Seldovia Harbor 

Improvements $200,000 Design Scoring and ranking

U.S. Army Corps of 

Engineers

Statewide Construction 

Inspection Services $75,000 Construction Scoring and 

ranking

Western Federal Lands 

Highway Division Coffman Cove Dock $1,650,000 Construction Scoring and 

ranking

Western Federal Lands 

Highway Division

Galena Barge Dock 

Planning, Design, and 

Construction

$1,623,166 Construction Scoring and 

ranking

Yakutat Borough Multi-Purpose Dock 

Construction – Yakutat $696,000 Complete Scoring and 

ranking

Total Waterfront Development Projects $34,259,739

51 scoring and ranking

12 discussion and 

consensus

* Project Status Terms

Planning: Includes investigation of transportation needs, planning and reconnaissance engineering 

studies, dock and other waterfront development analyses, final mapping, and research.

Design: Includes pre-construction activities, including preliminary engineering; NEPA studies; right-ofway and utilities analysis; plans, specifications, and estimates; and construction contract document 

development.

Construction: Includes construction contract bidding, selection, award, and execution. Project plans are 

complete and projects are ready to go or underway.

Complete: All phases of work have been completed and final inspections conducted.

Cancelled/On Hold: The sponsor is unable to execute the selected project; or projects that have not 

proceeded and might be re-scoped or cancelled.

Source: OIG analysis of Commission data.
24

Exhibit C. Evaluation Criteria for Project Selection Scoring and 

Ranking

EXHIBIT C. EVALUATION CRITERIA FOR PROJECT SELECTION 

SCORING AND RANKING

Evaluation 

Criteria Description

Weighted 

Score

Road Projects

Health and 

Quality of Life

Air and water quality, basic infrastructure quality, access to health 

care, water and sewer facilities, and other basic services 7

Public Support Community or regional support 4

Project Type Rehabilitation, reconstruction, or new construction 3

Economic Value Road repair, reroute, or rehabilitation 3

Project Stage Project stage-new start, design start, design complete or construction 

ready 3

Capital Costs Contributions to capital costs of project 3

Safety The primary purpose of the project is to improve a demonstrated 

safety hazard 2

Connectivity Improves intermodal connections to airport, barge landing, port, or 

dock or reduces redundant facilities 2

Joint Project Joint project funding or in-kind services 2

Maintenance Ability of project to either reduce maintenance costs, or ability of 

project to allow a road or street to be maintained to standards 2

Total Points for Road Projects 31

Waterfront Development Projects

Safety The primary purpose of the project is to improve operational safety 5

Public Support Community or regional support 5

Connectivity Improves Intermodal connections to airport, barge landing, port, or 

dock or reduces redundant facilities 4

Maintenance Reduce maintenance costs 3

Operations Project components important to safe and economic operations 3

Service Life The period of years repaired, rehabilitated, or constructed component 

will last 3

Economic Value Improves economic conditions locally or regionally; provides 

intermodal connections that enhance economic values 2

Harbor Capacity Increases harbor capacity to meet new subsistence, commercial or 

charter fleet vessels 2

Project Stage Project stage-new start, design start, design complete or construction 

ready 2

Total Points for Waterfront Development Projects 29

Source: Denali Commission
25

Exhibit D. Major Contributors to This Report

EXHIBIT D. MAJOR CONTRIBUTORS TO THIS REPORT

Gary Middleton Program Director

Name Title

Brenda James Program Director

Jay Swartzbaugh Project Manager

Christopher Minovich Senior Auditor

Calvin Moore Analyst

Adam Tabaka Analyst

Jamila Mammadova Analyst

Petra Swartzlander Senior Statistician

Seth Kaufman Senior Counsel

Karen Sloan Communications Officer

Harriet Lambert Writer-Editor
26

Appendix. Agency Comments

APPENDIX. AGENCY COMMENTS

Subject: INFORMATION: Federal Highway Administration 

Response to the Office of Inspector General (OIG) 

Draft Report on DOT’s Oversight of the Denali Commission’s

Use of Federal Transportation Funds (10U3004M000)

From: Victor M. Mendez 

 Administrator 

 

To: Calvin L. Scovel III

 Inspector General (JA-1)

The Federal Highway Administration (FHWA) is fully committed to carrying out its stewardship 

and oversight responsibilities to ensure Federal highway funds are spent on prudent transportation 

investments. Accordingly, FHWA has worked with the Denali Commission (Commission) as 

established by the Denali Commission Act of 1998 as amended by the Safe, Accountable, 

Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The 

Commission is an independent Federal entity intended, in part, to address some of the unique 

transportation challenges faced by Alaska's rural residents given the State's size and the 

remoteness of its communities and villages. Funds for this program have been used for road and 

resource development projects, including projects to connect rural communities, enhance

transportation safety, and provide emergency evacuation routes.

Although neither the statute, nor the 2006 Memorandum of Understanding between FHWA and 

the Commission, established authority for FHWA oversight of the Commission’s transportation 

project selection process or compliance with Title 23 United States Code (U.S.C.) requirements, 

FHWA has advised the Commission in establishing processes and procedures to deliver the types 

of transportation projects envisioned under the Denali Commission Act of 1998. Project selection 

Memorandum

Date: January 25, 2011

Reply to

Attn. of: HDA-AK
27

Appendix. Agency Comments

responsibility was assigned by SAFETEA-LU, Section 1960 amending the Denali Access System 

Program, Section 309(b)(4) to establish a Transportation Advisory Committee (TAC) that advises 

the Commission on transportation needs and coordinates, plans, prioritizes, and facilitates the 

Commission’s transportation work. With the exception of authorizing funding from the Highway 

Trust Fund, SAFETEA-LU assigns all responsibility for identifying and carrying out projects to 

the Commission upon the advice of the TAC. 

As described in response to the following recommendations, the FHWA will continue within its 

limited statutory authority to advise the Commission on policy and project development 

procedures pursuant to effectively addressing its responsibilities for federally funded 

transportation projects. We continue to be encouraged by the Commission’s commitment in 

working with FHWA to improve its processes and procedures to deliver effective transportation 

projects. 

OIG Recommendations and FHWA Actions

Recommendation 1: To ensure the project selection process is objective and transparent, the 

OIG recommends that the FHWA advise the Commission to either eliminate the discussion and 

consensus method or define limited circumstances in which its use is appropriate.

Response: Concur. The Commission uses two main methods to select transportation projects. 

The project scoring and ranking method requires the Commission to publish in advance on its 

Web site selection criteria and requirements. The discussion and consensus method is designed to 

provide for decisionmaking based on professional judgment. Over 80 percent of Commissionfunded projects accounting for 94 percent of its use of funds from 2006 through 2009 were 

selected using the project selection approach, where projects were selected using published 

criteria. 

To help enhance the transparency of the Commission’s project selection process, the FHWA has 

advised the Commission to either eliminate the discussion and consensus method or to explicitly 

define those circumstances when its use is appropriate. Based on those discussions, the 

Commission has informed FHWA that work is underway to revise its consensus method process. 

As it believes the consensus method remains a valuable tool, the Commission is developing a set 

of provisions that more clearly define the appropriate use of the consensus method during the 

project selection process and FHWA will continue to advise and collaborate with the Commission 

to address this effort. As FHWA, in its advisory capacity, has completed the recommended

action, it considers this recommendation closed. 

Recommendation 2: To ensure the project selection process is objective and transparent, the

OIG recommends that the FHWA advise the Commission to maintain detailed minutes, such as 

transcripts, of TAC project selection and funding discussions, including recusals from scoring and 

voting and the basis for each recusal.

Response: Concur. While the Commission currently maintains minutes of the TAC meetings, it 

recognizes records can be improved by including additional detail. The FHWA has advised the 

Commission, and the Commission agrees, on the importance of more detailed minutes to enhance 

transparency of the project selection process and funding discussions, including recusals from 
28

Appendix. Agency Comments

scoring and voting and the basis for each recusal. As FHWA, in its advisory capacity, has 

completed the recommended action, it considers this recommendation closed. 

Recommendation 3: To ensure TAC members’ selection decisions are free from conflicts of 

interest, the OIG recommends that the FHWA collaborate with the Commission to establish 

annual training for TAC members on how to avoid the appearance of or actual conflicts of 

interest.

Response: Concur. As noted in the OIG draft report, TAC members are not required to follow 

Federal conflict of interest prevention measures, such as attending ethics training, signing ethics 

agreements, or submitting financial disclosure statements. The TAC currently operates under 

guidance which instructs TAC members to recuse themselves from voting when they, their 

employer, or a family member might benefit from a project selection.

The FHWA has advised the Commission that the Federal model for avoiding conflict of interest 

represents sound practices that could help the Commission better assure selection decisions are 

free from actual or perceived conflicts of interest, and we have provided relevant training 

materials for the Commission’s review and consideration. Based on those discussions, the 

Commission has informed FHWA it plans to revise its TAC Roles and Responsibilities to address 

the OIG’s findings by adding a requirement that TAC members receive annual ethics training and 

certify their attendance at the training session. The FHWA reviewed the draft revised TAC Roles 

and Responsibilities and provided comments to the Commission and will continue to collaborate 

with the Commission to achieve a strengthened conflict of interest process and required ethics 

training program. As FHWA, in its advisory capacity, has completed the recommended action, it

considers this recommendation closed. 

Recommendation 4: To ensure TAC members’ selection decisions are free from conflicts of 

interest, the OIG recommends that the FHWA collaborate with the Commission to develop a 

requirement for TAC members to certify that the appearance of or actual conflicts of interest are 

fully disclosed prior to project selection activities.

Response: Concur. As noted in response to Recommendation 3, TAC members are not required 

to follow Federal conflict of interest prevention measures, such as attending ethics training, 

signing ethics agreements, or submitting financial disclosure statements. The FHWA has advised 

the Commission of the advisability of taking steps to better assure selection decisions are free 

from actual or perceived conflicts of interest. Based on those discussions, the Commission has 

informed FHWA it plans to revise its TAC Roles and Responsibilities to address the OIG’s 

findings and require TAC members certify either verbally or in written form, when a member has 

a conflict of interest. The certification is required to be retained in the record of the TAC 

proceedings. As FHWA, in its advisory capacity, has completed the recommended action, it 

considers this recommendation closed. 

Recommendation 5: To ensure TAC members’ selection decisions are free from conflicts of 

interest, the OIG recommends that the FHWA collaborate with the Commission to design 

mechanisms for Commission staff to verify that TAC members participate in annual training, 

fully disclose conflicts of interest, and recuse themselves appropriately.
29

Appendix. Agency Comments

Response: As noted in response to the recommendations above, TAC members are not required 

to follow Federal conflict of interest prevention measures, such as attending ethics training, 

signing ethics agreements, or submitting financial disclosure statements. As part of the discussion 

enumerated in response to the previous recommendations, the FHWA has included information 

relating to the importance of maintaining records to verify that all TAC participants receive ethics 

training and disclose any potential conflicts of interest prior to project selection activities and 

recusal. As FHWA, in its advisory capacity, has completed the recommended action, it considers 

this recommendation closed. 

Recommendation 6: To ensure that the Commission receives the information and 

documentation necessary to determine whether transportation projects are constructed in a fiscally 

sound, efficient, effective, and appropriate manner, the OIG recommends that the FHWA 

collaborate with the Commission to develop an oversight process that specifies the Commission’s 

responsibilities and actions to verify that grantee-supplied information demonstrates compliance 

with applicable Title 23 U.S.C. requirements.

Response: Concur. While the Commission has processes and agreements in place to address 

compliance with Title 23 U.S.C., those oversight processes can be strengthened by specifying the 

Commission’s responsibilities and actions to verify that grantee-supplied information 

demonstrates compliance with applicable Title 23 U.S.C. requirements. These actions can be 

targeted to enhance the program within the resources available to the Commission. We have 

provided FHWA’s program and risk analysis standard operating procedures as a framework for 

the Commission’s use and will continue to provide technical assistance to help the Commission 

further strengthen its oversight review and processes. As FHWA, in its advisory capacity, has 

completed the recommended action, it considers this recommendation closed. 

The FHWA appreciates the OIG’s efforts throughout the audit. We particularly appreciate the 

time and effort that the OIG staff has devoted to the report and allowed for this response, which 

has enabled FHWA staff to ensure that the points were fully and effectively addressed by the 

Commission. The FHWA is committed to continuing to provide advisory and technical 

assistance to the Commission. We are also committed to continuing to collaborate with the 

Commission as it takes additional measures to further implement ethics reforms and steps to 

strengthen its oversight processes and transparency. If you have any questions or comments 

regarding this response, please contact David Miller, FHWA Alaska Division Administrator on 

(907) 586-7180.