Denali Commission Official Anxious for Clarity on Returned Funds Request

Photo by Lori Townsend

As Congress debates how to cut federal spending, federal managers are left without answers about how their agency will be impacted. In May, APRN reported Congress said the Denali Commission may have to return $15 million from 2010 carry over appropriations. But three months later, the commission is still waiting for clarification about that amount.

The problem is two federal agencies are interpreting congressional intent differently. The Office of Management and Budget says simply, Congress wants the money, send $15 million back. But Denali Commission federal co-chair Joel Neimeyer says the Government Accountability Office sees it differently.

“They haven’t determined whether we need to give back the $15 million, because they’re very closely looking at the question that Congress put forward of unobligated prior year funds. In their mind that means that’s FY10 and prior, and if we were to give FY11 funds, we have essentially gone against Congress.”

The cloudiness doesn’t end there. GAO says the amount could be only $1.4 million. That’s the money left un-obligated at the time of the signing of the 2010 budget. Neimeyer says he has asked for written clarification from both bodies. Something the nearly 30 year federal employee says is perhaps unprecedented. He knows of no other agency that has questioned the mandates of the OMB. Neimeyer says the commission typically gets between 5 to 6 million returned each year as projects come in under budget. Paying 1.4 million would feasible without much fall out, but if the final amount is $15 million all at once, that will be disruptive.

“If we get the bad news we got to give 15 million back, we hope it will be over time not by the end of the fiscal year. Because the only way it’s going to happen if its between now and the end of the fiscal year is we’d have to cancel active projects.”

Those projects Neimeyer says would mainly be power system upgrades and waterfront projects. These are funded through Denali’s base appropriation. The commission also helps direct money to projects from other agencies and these funds are of concern to Yukon Kuskokwim Health Corporation President Gene Peltola. YKHC has its own construction arm and they are currently finishing up their 25th and 26th Denali commission funded clinics in Nunapitchuk and Mountain Village. Peltola says to date, YKHC has built over 100,000 square feet of clinic space with $35 million. He says there are 8 villages that need new clinics and that won’t happen without Denali commission funds.

“Basically we’re hearing the commission hasn’t received any designated funding from the feds for clinic construction. Senator Murkowski tried to get 10 million dollars in the 2011 budgetary process for new clinic construction in rural Alaska and that didn’t prevail.”

Greg McIntyre is YKHC’s Vice President of support services, which encompasses building construction. He says YKHC has returned about 1.8 million in funds to the Denali Commission after completing the last 6 clinics between 200 and 300 thousand under estimate. He does not want to see that money returned to the federal government:

“We haven’t been frivolous by any means. We’ve been very good at being thrifty so it will be a disappointment if that doesn’t go back into health care, whether it’s ours or someone else’s.”

It’s not yet clear if all or part of the clinic money will be protected. It will depend on what funding stream it originated from. YKHC President Peltola says the future is concerning for securing infrastructure funds for rural Alaska.

“I feel it’s the coming of a new age. We’ve never experienced this uncertainty in the past. On a smaller scale, yes, but not like it is now.”

Both YKHC officials say Denali Commission funds have been critical not only for construction of clinics and other infrastructure in rural Alaska but also for training and jobs, saying a decade ago, only one laborer may have been employed in a village building project, now local hire is nearing 100 percent. Health aide jobs, dental therapists, and billing and coding work also stays local.

The commission’s Neimeyer says in addition to changing how he allocates funds to better address congressional concerns; he’s also revising the expenditure rate. Neimeyer says many entities build their project and then send a bill, which makes it appear that projects are stagnant. He wants quarterly billing.

“And so then we can show to Congress that money isn’t languishing, that these projects are moving forward as Congress wants and good things are happening. But if you look at the balance sheet and you see several projects where there’s no money going out, you would just assume that those projects are inactive. Well, we’re going to start addressing that question.

Neimeyer says written opinions clarifying whether $15 million or $1.4 million must be sent back is expected from both GAO and OMB by August 15. Commissioners have a meeting scheduled for the next day.

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Lori Townsend is the news director and senior host for Alaska Public Media. You can send her news tips and program ideas for Talk of Alaska and Alaska Insight at or call 907-550-8452.

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