Anchorage let federal grant recipients off the hook, audit finds

An internal audit has found that Anchorage's Health Department, entrusted with millions in federal housing and community-development dollars, largely failed to hold recipients accountable when they didn't deliver — and the findings landed on the Assembly's desk the very night members were asked to hand the same department millions more to manage.

The numbers are striking. Auditors sampled six organizations that received federal Community Development Block Grant money and found four fell short of their goals. In one case, a contractor hired to repair 20 mobile homes in 2025 finished exactly one. Across a three-year stretch, 95 of 101 required progress reports weren't followed properly, and 22 were never filed at all. When recipients missed their targets, the audit found, the department didn't enforce the penalties that were supposed to hold them to account. In all, auditors logged nine separate findings — from lax goal-setting to expired agreements to missing paperwork — and federal housing officials had separately flagged the city for skipping a required public hearing.

The timing sharpened the stakes. The same July 7 agenda that carried the audit also asked the Assembly to adopt the city's 2026 spending plan for these funds — more than $2.5 million in federal housing and community-development money, all administered by the department the audit had just faulted — and to approve a new $750,000 grant to True North Recovery to buy a facility.

Department management didn't dispute the findings. It concurred with all nine and said it would finalize and put corrective procedures in place by August 1. Whether those fixes hold is the open question the Assembly now has to weigh as it keeps routing federal dollars through the same office.