JUNEAU, Alaska (AP) — Alaska’s executive branch denied auditors permission to examine records associated with a discontinued tax credit program for oil drillers, the state’s independent financial auditor said.

The state Division of Legislative Audit office also found lapses in data security and major gaps in accounting for aid to needy families, The Anchorage Daily News reported Thursday.

The division issued a “qualified” opinion on the state’s finances for the fiscal year that ended July 1. The designation means the audit is accurate only as far as the auditor’s division can tell.

“Department of Revenue management denied auditors access to relevant financial records,” auditor Kris Curtis wrote in a filing last month.

The division is the independent auditor for the executive branch and state law requires the agency to have access to all necessary documents.

The federal government requires state financial records to be independently audited each year to remain eligible for aid. Credit-rating agencies use audits to determine loan worthiness.


“That type of behavior causes us grave concern, because from an audit perspective, you wonder: Are they providing all the information,” Curtis said.

Former Department of Revenue commissioner Bruce Tangeman, who resigned in December, failed to sign a statement verifying that the state’s financial records are accurate.

“From an auditor perspective, that raises a lot of red flags,” Curtis said.

Tangeman failed to certify the finances because he was out of state before leaving office, and had left his post when a state official informed him of the audit, leading him to believe it would be inappropriate to sign then, he said.

Tangeman and current state officials said most of the audit issues relate to legal disputes that began under independent Gov. Bill Walker and have continued under Republican Gov. Mike Dunleavy.

State officials said they provided information about legal settlements concerning the oil tax credit program sought by Curtis, but information about negotiations before the settlements is protected by attorney-client privilege.

The Alaska Department of Law concurred that the state provided copies of tax settlements to auditors, but files covering the negotiations leading to those settlements have been covered by attorney-client privilege “for at least the past two administrations.”