Anchorage audit flags $11.8M paid without purchase orders since 2024

Audit Finds Millions in Anchorage Spending Bypassed Bidding Rules

At least $11.8 million in Anchorage municipal spending since the start of 2024 moved through a payment route that skipped purchase orders and never appeared on the city's public spending tracker, according to a newly released internal audit.

The Office of Internal Audit counted 2,448 invoices totaling about $5.85 million in 2024 and 2,687 invoices totaling about $5.37 million in 2025 that were incorrectly routed as non-PO payments, meaning they bypassed purchase orders. From Jan. 1 to April 7, 2026, auditors identified at least 241 more such payments totaling about $620,000.

The audit did not find that all of that spending violated bidding rules. It identified cases in which departments obtained goods and services without following the competitive solicitation requirements of city code. Those purchases were processed as non-PO payments even though they met the thresholds that require competitive solicitation. Auditors cited equipment rentals that continued after a contract expired and a sole-source vendor payment made before the required approval.

The Purchasing Department was authorized to review these payments in January 2024 but did not begin until December 2025, nearly two years later. Even after that review began, auditors found at least 343 invoices totaling about $795,000 were still paid as non-PO despite meeting purchase order requirements. Missed use of the municipal purchasing card cost an estimated $4,547 in lost rebates.

Auditors also found that "incorrectly routed payments also don't appear on the Municipality's mandated 'Online Checkbook' transparency tool."

Management concurred with the findings and said current Purchasing staff identified the issue and requested the audit. Planned corrective actions include expanded written guidance on non-PO payments with clearer definitions and examples, targeted for the first quarter of 2027. Procurement and invoice-processing training for employees who initiate purchases and submit invoices is targeted for the second quarter of 2027. Management also said it would evaluate stronger controls within the municipality's SAP financial system, including a mandatory non-PO category selection, once that system is stable.

Earlier municipal audit findings

This is not the first audit to flag gaps in municipal financial oversight. Alaska News previously covered an internal audit that found the Anchorage Health Department did not enforce penalties on federal grant recipients who missed project goals.

The report, prepared by Internal Audit Director Alden Thern, goes to the Anchorage Assembly as an information item at its Aug. 4 meeting. Anchorage Municipal Code 7.20.010 sets the competitive solicitation requirements the audit cites.