APFC Board: APFC BOT Ethics, Audit, and Cybersecurity Meeting

We are on the record.

Okay, you guys good? Yeah. Okay, good morning everyone. I'm going to call this meeting to order. This is the Board of Trustees Ethics, Audit, and Cybersecurity Committee meeting.

It's September 2nd, 2026, and it is 8:48 AM, and apologies, we had some technical difficulties this morning, but we are off and running now. So first up, we'll do roll call. Jennifer, could you do the roll call for us, please? Oh, yes, sorry, I need to— Trustee Bruni. Here.

Trustee Earls? Here. I've been told Trustee Samuels will be online shortly, and Trustee Beasley will be online around 9:30. And Committee Chair Anderson? Here.

Okay, have a quorum. Okay, thank you. Oh, and Trustee Schutt is online. He's not part of the committee. I'm online.

Okay, great to hear you, Trustee Schutt. Okay, so first up is approval of the agenda. Are there any questions on the agenda?

Okay, not seeing any questions. Do I have a motion to approve the agenda? So moved. Second. Second.

Okay, any objection approving the agenda? Okay, with that, the agenda is approved. Next up is the approval of the meeting minutes. These are in your packet. I believe they're on page 5.

These are the May 28th, 2026 Alaska Permanent Fund Corporation Board of Trustees Ethics, Audit, and Cybersecurity Committee meeting minutes. Any questions on the minutes or any corrections? Move approval, Mr. Chair. Okay, do I have a second?

Second. Okay, any objection to approving the minutes?

Okay, with that, the May 28th, 2026 minutes are approved. Okay, next up we have an opportunity for public participation. Jennifer, do we have anyone online?

If you are online, please use the raise your hand function. We do not have any telephone numbers.

And there are no hands raised. Okay. And is there anybody in the room for public participation?

Okay. Seeing none, the public participation period is closed. So we'll move right along into our first item. Up is the KPMG audit report. This is informational with Beth Stewart and Melissa Beatle.

Yeah, have you guys come up and present your report. Thank you, Mr. Chair. Thank you to the trustees. Beth Stewart with KPMG.

I'm the managing partner of the Anchorage office and served as the lead audit engagement partner for the audit this year. I'm an Audit Managing Director with our Anchorage office, but I live here in Juneau. Both Melissa and I are long, long time running members of the fund audit engagement team. We're pleased to present our audit results to you today, and we're in a great position and have a very clean report. So we'll make it brief.

On the first slide is an overview of the high-level summary. Okay. That describes we have no outstanding matters in the audit. We're ready to issue upon approval of the committee today. We intend to issue an unmodified or clean audit opinion, which is the the best audit opinion you can get.

It says that we believe that the financial statements conform with generally accepted accounting principles. And we have one uncorrected misstatement that we'll discuss. It relates to timing and is something that we expected to have.

Very, very clean audit process this year. On this slide, sort of serves as an agenda of sorts for the items we'll discuss today. And the items with an X mean there's nothing to report. So these are areas where the professional standards say that if there were something, we would, we would need to discuss that and disclose it to the committee.

Importantly, from a financial statement presentation disclosure, we didn't identify any omissions. And we didn't have any changes to our planned audit strategy. You might recall, we, Presented our audit plan at your meeting in May, and when we attended with you down in Valdez, we were able to execute our audit consistent with that plan and on time. Moving to the next slide, some of the other communications are more significant consultations. If we had areas that were particularly challenging and we needed to consult outside the engagement team, we communicate those to Those would be maybe differences of opinion on accounting or accounting matters or audit approach, but we didn't have any of those.

We also didn't identify any illegal acts or fraudulent activity by your management team. We do design our audit to identify any material misstatements that might be caused by fraud, in particular management override of internal controls. And we didn't identify any, any matters of that sort.

We will provide you written communications that we have with your management team. That'll be in a side communication to you so that you have copies of the things that we rely on during the audit. And then just a couple other agenda items that we'll talk about later. Next slide.

For disclosures and accounting policies, there were no changes to disclosures or accounting policies that were adopted by the corporation as it relates to the fund's financial statements during the year. Within the financial statements, there was one accounting policy change, uh, GASB Statement Number 103, uh, that was adopted, uh, this year, and that had a small impact to the management's discussion and analysis that's presented outside of the financial statements.

With that, I'll turn it to, uh, yeah, so we have a couple of accounting estimates that are built within your financial statements. We talked about these in our audit plan. These are the ones we consider to be a little more significant, and so we spend more of our time focused on these accounting estimates. The first one relates to the valuation of your directly owned real estate investment. So as part of that, we involve our valuation specialists to look at a selected number of properties, and they look at the appraisals that you— your management has received from Citus, as well as evaluations that are recorded to make sure that the assumptions and the inputs used in those appraisals are all appropriate and reasonable.

There's been no changes in the current year related to how management determines these valuations. That's consistent with what we saw during our audit process as well. The next accounting estimate that we consider to be significant is the valuation of your private investments.

So these would be your private equity, primarily everything that's down in that private investment section of your financial statements. For these, we also involve an external specialist team, external to the fund, internal to KPMG specialist team to review the valuations that are received. We also get the audited financial statements from those funds that we've selected. We look at whether those fund managers, if they can, Based on their capital statements and those audited financial statements, are they good at estimating what those values are? And we take that back to how the fund has reported them and looked at those.

Again, there was no changes to the method or process used by management. And this is the area where we did have that one uncorrected misstatement related to timing of when those statements are received.

On the next slide, and this is the one that you have in paper in front of you, this is our uncorrected audit misstatements. And what we show here is kind of a history of where this has fallen over the last several years. Um, since 2020, the fund has put in place a process to do a second close on their books. So they close their books in July. More of these capital statements come in.

August 18th was the cutoff date this year. They looked at all the statements that came in between that first cutoff and the second cutoff. Recorded those change evaluations, and then this period right here for this uncorrected difference would be between August 18th and August 31st. So anything that's come in subsequent to that fall into the uncorrected audit in the statements. You'll see it's a little bit less than last year.

So it was about 200— I don't have the number— $260 million of your private equity came in. Subsequent to that August 18th close that increased the value of those. Um, overall, it was about a $300 million increase in that lag reporting that would be in the financial statements if they had been received prior to that August 18th cutoff. Instead, this value will be in the FY '27 financial statements. So it's just timing of The capital—.

Just one quick question. So just the colors, the red, I think it is on the right on the 2026 bar. Is that absolute return? Or is that private equity? That is private equity.

The big one is private equity. Okay, thank you. Yeah, it's hard to see the color. Some of them are very small.

Go ahead on to the next slide. Yeah, just to confirm, Beth, what you were saying, or Melissa, these are subsequently reported on the FY '27 returns, not the FY '26 returns. And obviously there's been a consistent— I mean, with PE, we always know that they're lagging. I'm just contemplating how, Devin, this affects incentive compensation. So it'll affect incentive compensation for this year.

Not for previous years, because we base it on what the returns were as of June 30th, and we didn't know that this would be the case. I suppose, I mean, if you looked at 2026 in isolation, the difference would be from that amount from '25 to that amount from '26, so something like $50 million of performance one way or the other that you're talking about, which isn't enough to move the needle for purposes of incentive compensation because last year you carried forward the 25 non-recorded items in '26 financial statements. Now you compare '26 to '27. But to your point, if it were to move the needle on whether or not somebody was eligible for incentive compensation, it would spark an additional conversation, I'm sure. But in this scenario, it doesn't.

Mr. Chair, follow-up? Yeah. So I totally see your point when you compare '25 to '26. There is a small delta between those two, but you look at '24 versus '25, you know, or '23 versus '24, they're effectively the same.

And then, of course, '23 versus '22, it's a $500 or $400— $500 million difference. That—. I don't think that's insignificant. I mean, that, that could, that could have an impact on a positive return or a negative return. So is that something we should be contemplating for evaluating, or is that just something that we, we just know it's going to be this way every year because there's a lagging PE, predominantly PE, but obviously there's, there's impacts on private credit and others.

So I mean, what's— we just status quo, we keep doing what we've always done? Trustee Burney, I think it's important to remember that incentive comp is paid on— that's terrible— is paid based on the Callan calculated performance, and the Callan performance has a built-in lag for the private markets. So the 6/30 performance includes performance through 3/31, not through 6/30. For financial statement purposes, we're attempting to always report the, you know, the most current valuations, but Calen cuts off, and for the 6/30 performance, it's 3/31, which is largely complete by the end of the fiscal year. So there's a quarter lag for performance.

I get it, but in each of these two years, for the past 2 years. We've started the year off $300 or $400 million up, which is good. I'm trying to understand how that applies, that the Q1 or Q3 for our fiscal year, how that applies, because based on what I see here, it's much better to start off $300 million or $400 million ahead than '22 when we started off $400 million behind. How does that impact the incentive compensation calculation? Well, Val just explained it.

I don't understand. Like, I'm sorry. So for purposes of incentive compensation, we're not relying on this audited financial statement. We're relying on CALS. Performance numbers that are lagged.

So for purposes of this year's incentive compensation, the cutoff was March 31st, not June 30th. This is attributable to the final quarter of the fiscal year, this lagged reporting of performance. Substantially, the reporting for March 31st is all complete. So you have a lag that's built in, and every year is the case for purposes of determining instead of compensation eligibility for those asset classes. Does that make sense?

Rather than this— this is our financial statements, our audited financial statements, which due to timing and inability to wait for the end of the quarter to have full reporting, we have statutory requirement to report and provide audited financial statements that leads to this mismatch occurring. From a timing perspective, there's a, there's a deliberate misalignment between the computation of return and financial statements. That's, that's a deliberate disappointment because of private assets being, you know, so performance is computed based on the March numbers and this is out of the June numbers. This is just for financial reporting perspective, you know, objectives, not for performance. It's a sort of misalignment.

It's, it's sort of not very When we tell—. Mr. Chair, sorry, follow up. When we tell people how we did for FY26, what number will we use? This one or the one that we reported?

March. So it's March to March. Understood. It's 12 months. If we wanted to shift and have a June 30 reporting, we'd want to get our statutes changed so we didn't have to provide our audit by October 1st.

We want a flag in that so that we could account for the need to then compile the information provided to our auditors to do the work to be able to provide that audit in a timely fashion. So if, for example, the statute changed and we went to November 15th, then I think it's much more like— obviously we would have absorbed a lot of this variability. Final—. And this is sort of—. Sorry, no, you're good.

But this is, uh, the same norm sometimes with private assets, especially when you have sizable private asset portfolios. Most institutions do that, lag for performance. But for financial statements, there's also a requirement to be as close to the closing date as possible. So I mean, it's, it's kind of a deliberate misalignment. I mean, I completely understand your point of view because performance is reported on one number and financial statements are reported on another number.

That's just known and maybe deliberate sort of—. I understand, Mr. Chair. One last final follow-up. Thank you.

Best practice from KPMG. Devin just indicated that if we wanted to do something like this, we should get our statutes changed. Our fiscal year as a state, given we provide 66% of the state's general fund revenue, it matters. Would a best practice recommendation be to change that statute to have this happen in November rather than in September like we're rushing to? What would—.

Again, as we rely more on the revenue from the permanent fund, these things, I think, matter more. So we're obviously— we've been cool doing it the way we've been doing it, but would staff or KPMG have a recommendation that we contemplate a statutory change to move it back a couple months? I'll look at you first. Okay, so there's also a statutory requirement that the state provide its audited financial statements by, what, December 5th? I think it's so, so they have a statutory framework that then all of the public corporations' frameworks require audited financials by October 1st.

So it would be, I mean, the state has not been providing its financial statements in line with that statutory deadline because of difficulties since IRIS implementation, the state's accounting system, but I don't know that it's there's, there's not been any discussion of allowance for additional timeframes. And I think we're somewhat unique in our financial statements reliance on input from private lag, private market performance. And so we would be an outlier to the other state agencies if we were to ask for an exception to what's been a historical rule and a guideline to have financial statements available at the state level by the December deadline. So I don't— from my perspective, I don't know that what we have isn't workable because we are on an annualized basis with performance for our investment team and the reporting, even though it's got some discrepancies on a percentage basis, they're relatively minor. Compared to the size of the fund, uh, and, and it's not been something that internally we've been discussing as a potential shift or with our external auditors as a requirement, like, as a best practice.

But I— there could be new information provided today that leads us that way. Thanks, Mr.

Chair. Okay, any other questions? Okay, proceed. Right. On our next slide is the other information slide.

So this, this just essentially says that when that annual report is drafted, we are required to review it before it is finalized to make sure the information contained within is consistent with the information in our audited financial statements and what we learned during the audit. We've already been working with Val and her team on timeline for that, and we should be getting that.

Our independence communications we have listed here. There's a couple of services that we provided that are fall outside the scope of regular audit services. So financial statement preparation assistance and our IT security assessment that was performed this year. We did evaluate those against the standards and ensured that we do maintain our independence and can issue that independent auditor's opinion.

Next slide, we're going to skip.

And then this one, we talked a little bit in our planning discussion back in June or May about the use of technology and AI in our audit. We wanted to provide here, there's a couple of areas where we've used automated workflows or AI through Alterix. Copilot, Gemini. So we wanted to provide a little bit here information for how we've actually used it and the result that that had into our audit process.

On the final slide, it's what's on the board agenda for 2026. So these are things that companies across the country have been discussing and what we've seen through various board meetings and other communications and surveys that are part of the consultation across the nation.

Mr. Chair. Yeah, Trustee, could you go back one slide, please? And I'm sorry if I missed you saying this. I just—.

I know Scott has been adamant on our use of AI tools. And the confidentiality that comes with throwing data out. Could you assure us about the confidentiality of your use of AI and the data that we've provided you, that it's not out for the world to see? Yep, I can assure you of that. And KPMG has invested heavily in providing AI networks that are better secured.

Secured walls, if you will, for KPMG to use. So we have our own data security process and framework where that when we are using AI, it's not going outside of the KPMG environment. Thank you, Mr. Chair. Thank you.

Other questions?

On your, on your last slide on the 2026 board agenda, Is that kind of like a best practices when you're looking across to all the boards that you work with? Is that— it's not like a specific for the Alaska Permanent Fund? Right, correct. It's a survey of 200 to 300 organizations around the country of what their board focus areas are. Okay.

And many of them are that are on this list. I—. It struck me that many of them are within the purview of this committee. Have important work on charter. And on the— there's a link at the very bottom if you wanted to read more about any of these areas.

Thank you. Okay, that, that's the end of the presentation. That's the end. Okay, any other questions? Any board members?

Um, Trustee Schutt online, any questions?

No questions here. Okay, did we ever get the Trustee Binkley or Trustee Daniels? They're not on yet. Okay, okay, well, that'll close out the presentation. Um, our next agenda item is an executive session, and in the past I think the board has agreed that it's prudent to have an executive session with the auditors, um, just to have that chance to have some one-on-one discussions and, and go through that.

So At this time, I would entertain a motion to go into executive session. Sure. In accordance with Alaska's Open Meeting Act, I move that the Board of Trustees convene in executive session for the purpose of meeting with APFC's external auditors, KPMG, to discuss the integrity of financial reporting and control procedures, which may include discussion of APFC staff. This topic is appropriate for executive session because the immediate knowledge of details discussed could negatively impact the value of the permanent fund or be harmful to the reputation or character of KPFC staff. Okay, is there a second?

Second. Okay, any objections to that motion? Okay, we'll go into executive session.

Okay, we're back on the room. Okay, okay, I'll call the, um, Board of Trustees Ethics, Audit, and Cybersecurity Committee meeting back in session. Um, while in executive session, the committee considered only the matters mentioned in the motion and took no Action. Okay, we'll get back to our agenda. Um, let's see, 9:30 AM.

We're doing pretty good on time. Uh, the next up for the item, or the agenda item, is the detailed review of the FY26 year-end financial statements. This is an informational item. Um, this is with Jackie and Val, so I'll let you take it away. Thanks, Chair Anderson.

Good morning, committee members. Um, as Beth and Melissa covered at the, the last session, the audit is completes. FY26 is in the book. Uh, so we're here today to talk about, um, just give you an overview of, um, the financial results for the fiscal year. The, um, in your packet you have the latest version of the audit report that was available at the packet deadline, and it's largely, largely unchanged to the final version.

There were a few minor changes to MD&A, but for the most part, the final audit report is as in your packet. So, so with that, we'll, we'll dive in here. Some key takeaways from FY26. I think by all accounts, it was a very healthy year financially for the fund. We ended the year with accounting net income of $10.1 billion.

And that was about 30% higher than FY25. And it was actually the second highest level experienced by the fund ever in the history. So the, the only, the only year that surpassed FY26 was, I think, FY22 coming out of COVID when we saw just enormous gains in the stock market. The statutory net income likewise was very healthy for FY26, actually the largest statutory net income experience in the history of the fund at $8.2 billion, also significantly higher than FY25. That was $5.9 billion.

We collected $535 million in mineral revenues into the corpus. That's a little bit higher than last year and ahead of the spring revenue forecast. And we made 12 transfers to the general fund under the POMB construct totaling $3.8 billion in the year. Total return was 12.42%, which in absolute terms is a very healthy, healthy return. There's only been a handful of times over the past 20 years that that the fund has exceeded that full return.

Sure. Well, for some reason, $4.0 million is sticking in my head. Did we, did we transfer less than we thought we were going to, or was $3.8 million what we anticipated for FY26? Um, it— we've transferred the full amount. Yeah, I think it's—.

For some reason, I remember it as $4.0 million. I think that's FY27. Yeah, '27. My bad. Thanks, Mr.

Chair. Thank you. Didn't short the general fund. That would have been great if they— it would have been great if they underspent. I was just shocked.

And so obviously I conflated fiscal years. Yeah, no, we transferred the full amount. So moving to the balance sheet, which is the first statement in the set of financial statements, the balance sheet is a snapshot at close of business on June 30th of the value of the fund. The assets is the first section on this statement. This represents, you know, what the fund owns.

There are 4 main categories on this statement. Cash is fairly self-explanatory, though I would point out that this includes not only the cash that is intentionally invested as cash as part of the asset allocation, but also cash that is held in the other asset classes across the portfolio that's not invested. Receivables represent primarily— well, mostly the amounts related to trading on the last few days of the fiscal year when we sell securities and those trades settle after the end of the fiscal year. We reflect a receivable on the books so that That balance tends to fluctuate significantly. We had a large rebalance that was going on at the end of the year, so that, that balance looks a lot higher than FY25.

The biggest category in assets obviously are the investments.

That amount increased by about $6.6 billion from the end of FY25, and we'll take a look at how that breaks down in the next slide. Slide. And then the fourth category in assets is the securities lending collateral. This represents cash collateral that we're holding on our books that is collateral that's been posted by counterparties that have received our securities on loan, and they've posted cash back to us. We're required to carry that as both an asset and a liability on our balance sheet.

So overall, assets increased by about $8.2 billion from the end of FY25 to the end of FY26.

So this slide shows the breakdown of that $88.1 billion that we are carrying as the net asset value of the investments on 630. Generally Accepted Accounting Principles requires us to mark these at fair value. So the public securities are, are valued on a daily basis. The private securities are valued on a quarterly. The financial statements always reflect the latest known values for all of the assets.

This values can definitely fluctuate with changes in the markets that they participate in. These—. They also can change, though, with rebalancing in and out of the asset classes. So these balances do not— the change in the balances don't necessarily reflect the performance that was experienced during the year. A good example of that is the public equities line.

That increase in value of 4 or, yeah, 4+ billion is net of about 2.8 billion that was transferred out of that asset cluster in the year. So the performance is a lot higher than, than what we're seeing as a percentage increase here.

All you can see, all the public asset classes in addition to private equity experienced some increase decrease during the year, with the other private asset classes not, you know, with some slight decreases. Mr. Chair. Yeah. Just for clarification, in light of the K-10 discussion we just had, on the top of the second column, it says as of 6/30.

The PE, is that as of 3/31? No, for financial statement purposes, that was the— as much as we knew when we closed the books as of 6/30. So it—. This is not the Callan number, this is the number. Okay, thank you.

So a part of the valuations that we looked at for each asset class on the, on the last slide include the unrealized gains and losses for each of those categories. This represents the change in value from the time of purchase to the measurement date for the financials. On 6/30, we were carrying nearly $18 billion in unrealized gains across all asset classes. The green lines— they look green up there— the green lines here represent the liquid asset classes. So those gains are easily realized and, and are more frequently realized as we rebalance within the portfolio.

The red line represents the illiquid asset classes. So when we talk about having $18 billion in unrealized gains, it's important to understand that about 46% of those gains actually sit in asset classes where the gains won't be realized in the short term. Those are, those are more slower, I would say, turnover for those asset classes.

You can see here that at the end of the year, all asset classes were above water with the exception of fixed income.

Mr. Chair? Yeah, Trustee Riddick. So Trustee Samuels, I think, and I have focused a lot on that second column there about what is it if there was an emergency the legislature could, quote, go after. And obviously we have the earnings reserve.

But this unrealized gains in an emergency, if we had to sell our gains, $7.2 billion, we could get pretty easily. And I appreciate your point about $6.5 billion is in— in going to be a lot more difficult, and we would take a huge haircut if we did have to. To get those. But where this is unrealized, what's currently in our— I know you're probably coming on that— what's in our earnings reserve? And I'm just contemplative of the discussion we have with the, Mr.

Chair, the constitutional amendment that we've been talking about and the fact that just with a 21-11 vote, the legislature could grab more than what's in the earnings reserve if they wanted. And obviously we're concerned of that with a transition in third floor, a new legislature coming up. I just want to make sure we're all putting on the record, uh, you know, our position and what, what actually— unfortunately oil prices are up, but anything can happen. So I just, I just want to make sure that I'm understanding that perspective, and that, you know, currently this is not grabbable by the legislature because it's not in the earnings, but it could be quickly if needed. Yeah, I mean, in its current form as unrealized, it's not available for expenditure.

It would have to be realized, and then it would end up in, in the realized earnings line. We will get there, but to answer your question, at the end of June, we had 10 points $6 billion in realized earnings that was uncommitted that would be available for appropriation. And that uncommitted doesn't include the FY '27 $4 billion, correct? Correct. So that's additional to that $4 billion.

Thank you. Thanks, Mr. Chair.

Okay, moving on to liabilities. This is what the fund owed. To outside parties at the end of the fiscal year. 3 Categories here: accounts payable, that similar to the accounts receivable line is related to securities trading. There was rebalancing going on at the end of the year.

Balance is a little bit higher than what we normally see. The income distributable line represents the realized earnings that per statute we're required to transfer over to the Alaska Capital Income Fund. This is the, the realized earnings on the balance of the Emerita Hess portion that is sitting in principal. We had a high realized return for FY26, so that $41.1 million is, is higher than what we typically would see. And then also similar to the asset section, that's Securities lending collateral, that is an offset to the asset that we saw that's representing the liability of the cash collateral that we are committed to return to our lending counterparties when those loans turn.

And then fund balance is the final section of the balance sheet. This is where we focus a lot of of our attention. There are 3 components, and we'll dive into a little more detail on each of those in the next slide.

The— we were just talking about the earnings reserve account. Together, the committed and assigned lines comprise what we refer to as the earnings reserve account, and then the nonspendable line is the principal of the fund, the corpus. Total fund balance increased by $6.8 billion to end the year at $91.9 billion. Obviously a high mark so far. Mr.

Chair. Just to Jason's point of earlier, the $73 billion and the amount in the earnings reserve account includes unrealized gains. And so those components aren't truly— they're nonspendable in the sense that they haven't been realized, but they're not nonspendable in the sense that they're protected principal per the Constitution. So there is a subtle distinction that lies within the financial statements that doesn't otherwise get teased out in the presentation. Okay.

So this next slide, we're Debuting Juliette's fabulous new fund balance slide.

This is a, just a visual representation of the components of fund balance, $91.9 total on June 30th. The outer ring of this graphic represents the two-account structure, the principal, which is the, the corpus of the fund, the mineral deposits, the inflation-proofing, any special appropriations that have been made since inception, and then the teal section represents the earnings reserve account. And as Devin just pointed out, there is a component to each of these that is an allocation of the unrealized gains. We, we go through a process at the end of each month to to allocate whatever unrealized gains are held across the portfolio in a pro-rata manner between principal and earnings reserve. So the intersection of this graphic, the dark— excuse me— the dark blue section represents principal, $59.4 billion in deposits, and then an allocation of $14.4 billion in unrealized gain for a total principal of $73.8 billion.

The— excuse me— the green portion represents the earnings reserve account. There's 3 components to earnings reserve. There's the $4 billion for the FY '27 general fund transfers that has been committed. It's been set aside from the realized earnings, and then leaving $10.6 billion in realized earnings and then an allocation of $3.5 billion of unrealized gains.

It's true. Juliette, I got to tell you, and I didn't look at these in detail when I was going through this originally, this is a phenomenal slide. Isn't that great? It's, it's, it's going to be so important for sending the message to the legislature about what we're trying to do. This is awesome.

I hope she's listening. She told me she wasn't sure it was ready for prime time. I said, oh, come on, let's do it. It's fantastic. Yeah, thank you.

And then just looking at sort of the history of the various components of the principal and earnings reserve for the For the looking back 5 years, on the right we have the components of principal. The bottom dark blue represents the mineral royalties. You can see these kind of bump up, you know, sort of steadily over time as you'd expect as those deposits come in. The lighter blue represents inflation-proofing. I think it's important to point out here that that balance hasn't changed since FY23, and that is because we have not had an appropriation since FY23 for inflation proofing.

We do have one for '27, so that's good. And then the sort of grayish bar on top of that represents the special appropriations that the legislature has made either from the general fund or from the earnings reserve account. That balance also has not changed. There have not been special appropriations during this time period. And then the top bar represents the balance of the unrealized gain allocation.

On the right, a similar breakdown for the components of the earnings reserve account. I do need to apologize, my legend is not— there's a problem with the legend, but the bottom, the orangish bar at the bottom represents the amount that is committed for the future years, for the following year's general fund appropriation. The middle bar represents the uncommitted realized earnings. And to Trustee Bruni's point, there was a period of time where we were really talking, we were concerned about the balance in the earnings reserve, and we were monitoring it pretty closely to make sure that that we would be able to fulfill our commitments, both for inflation-proofing and for the general fund transfer. At the end of '26, we ended with a healthy balance of $10.6 billion.

Scott leaves us—. Left us in a really good position to be able to commit the FY '27 general fund transfer amount and also set aside the amount for the inflation-proofing, estimated inflation-proofing. But Val, to the point Trustee Shutt has often made, one global financial crisis and it could swallow all of this. So it's, it's while we're in a healthier position today, we still have to remember what happened 15 years ago. That's, that's absolutely true.

That realized earning balance, the only way that that is going to go away is if it's appropriated or if we realize losses in the portfolio. So, and that did happen one year. And so, so absolutely, it's, yeah, it looks healthy today, but shouldn't, we shouldn't keep our eye off the ball, I guess. And then the top portion of that is just the allocation of unrealized gains and that fluctuates based on the pro rata balance to the total fund. Mr.

Chair, just one follow-up. This is only us. We're not incorporating the other two accounts that we manage. On top of this. Okay, thank you.

They have their own separate reports, but this is APF only. Perfect. Thanks, Mr. Chair. This next slide, just, it looks at the history of inflation-proofing going back to 2016, and the real— the reason we start with 2016 is that was the first year that the legislature departed from the statutory framework for inflation-proofing.

The calculation for inflation-proofing is set out in statute. But it does require an appropriation as part of the budget process in order for us to transfer. So the, the second column to the right is, is the amount that would have transferred per the statutory calculation. That middle column is the amount that was actually appropriated, and then calculating a surplus or a deficit. In FY20, there was an appropriation of $4 billion that had intent language attached to it that designated it for future inflation-proofing, and so we've included that here as in the FY20 amount that was appropriated.

And the '27 amount is an estimate. We won't know that number until we close the year, but there is an appropriation in the budget for an estimated amount. Mr. Chair, Trustee Behrendt. I don't know if I like this slide with that third column, $4 billion amount, because we've obviously had this conversation a number of times, so maybe I'm misunderstanding it.

The $4 billion that the that Senator Steadman and the legislature believes that that counts. We trustees don't believe it counts, and that is not reflected. And so what—. But what I'm—. But it's showing surplus deficit of $4 billion in 2020.

That, quote, surplus is that $4 billion appropriation, correct, or no? So there were two $4 billion appropriations. The first one was in FY20 that had intent language when it was as part of the budget that flagged it as amounts for future inflation-proofing. There was a second $4 billion appropriation in FY22, I believe, that had no intent language attached to it at the time, and that's the one that the trustees have given staff direction to consider as a special appropriation. So that is not reflected.

My bad. Thank you, Val, for the reminder.

They're both $4 billion. I know, it's confusing. I conflated them. Well, my apologies. It doesn't help that in '23 it's $4 billion again, but that was actually the actual inflation calculation.

So technically, the way the Senate— Mr. Chair, follow-up. —Could read it is they think the $4 billion counts, so we're $633 million in the hole. We think the $4 billion doesn't count, so we think it's $4.6 billion in the hole. Okay, thank you.

Sure. Okay, moving on to the second statement of revenues, expenses, Expenditures and Changes in Fund Balance. That is part of the audit report. This measures over the period of a year the financial activity of the fund. So instead of an at-a-point-in-time measurement, it's a cumulative report for the fiscal year.

So the first section on the statement is revenues. There are two components to revenue. The first is cash flow income. This is the income that's coming in on a regular basis from our investments, interest, dividends, cash flow from the private markets investments. This is an important part of the realized income that feeds the earnings reserve because it is reliable and consistent.

It's a little bit higher, not significantly, but for '26 was a little higher than FY '25. And then the second component of revenues is the change in the fair value of investments. So we, we've talked about on the balance sheet the unrealized gains and losses that are held across the portfolio. When, when we adjust those values, the offset to that is this line on the income statement. So as you'd expect with a higher total return for '26 than '25, our revenues were up about $2.3 billion.

So just to take a look at where those changes in the investment value occurred, there was a $2.2 billion increase in change in investment value from, from the prior year. The majority of this, no big surprise, came from the public equity line, which went up by about $2.1 billion. Private equity and absolute return also had pretty significant increases, and then smaller, smaller increases across the other asset classes. And again, just a reminder, these values change on a daily basis for the public markets and quarterly for the privates.

Then moving to the expenditures, this represents what, what we spent during the fiscal year. The operating expenditures are all things related to operating the fund and operating the corporation, so salaries, travel, training consultants, and the biggest component of this is the investment management fees that we're paying to our external managers. This line is higher for FY26. That's primarily related to higher management fees being paid because of the, the performance of the public equity asset class primarily. As the market goes up, those fees go up because they're based on assets under management for the most part.

The other line in the expenditures, and we had a conversation with Trustee Rooney about this just the other day, are the other legislative appropriations. There are 3 appropriations that the legislature appropriates out of permanent fund receipts that go to other state agencies, Department of Revenue, Department of Natural Resources, and Department of Law. And those are to support programs that support collection of mineral royalties or things that support the operations of the fund. For '26, that was nearly $11 million. $184 Million.

So total expenditures for, for the year, just over $184 million. So netting that against our revenues leaves the accounting net income of $10.1 billion for the year. Trustee Samuels, I see you have your hand up. Yeah, thank you. I just want to clarify on that $10 million for the legislative appropriations to DNR.

Um, that comes out of the 5% though, right? So the legislature has us give the money, but it's still included out of the POMV, the Senate Bill 26. That's already included in there. It's not outside of that, correct? No, it is in addition to the POMV transfer.

So they're actually above, above the statutory limit of 5%.

Yes, they, yes, they are, although it's within their purview to appropriate. No, understood, understood. But, um, okay, I'll have to mull that one. Thank you. Mr.

Chair, follow-up. Yep, Trustee Greeney. So about following up on what Trustee Samuel said, we give money to the Department of Revenue, Department of Natural Resources, and the Department of Law. And that's above and beyond the— like, when we have positions, hours from the Department of Law, are they also billing us? For those hours on top of the contribution we make to them for different work.

So we have an RSA with our—. Obviously Chris is in our budget, but when anyone else from the Department of Law— oh, he's in our budget too. True. Yes, it's in our operating budget, the cost for Ben. The cost we're talking about are for collection of royalty deposits.

No, no, understood. I'm just trying to understand that because We, we give money to 3 different departments above and beyond, but we're also supplementing other departments through direct RSAs with departments as well. And that's based on time used. Correct. Okay.

And these appropriations to support other state agencies work predate the POMV. No, no, of course. And so my question, follow-up question would be, is what's the— is there a CPI adjustment? Why did it go from 10.4 to 10.8? And maybe Trustee Earls knows the answer to— I mean, y'all get a bigger number by 2.9% or whatever it is, or how was that determined?

Because It's coming from somewhere in some committee. Someone's raising that number, and it's not us. We don't have visibility into how that— I don't know if those are amounts that the agencies are requesting as part of their budget request. I don't know the answer to that, but we don't have visibility into that. Any idea?

No, I can look into it though. Costs are going up. Well, no, of course costs are going up. I get it. But I just, that's why I'm trying to figure out where is that coming from?

Is that coming from the specific committee that oversees our budget that they, is it coming from the third floor that they put a multiplier on it for each year? They increase it by a certain amount and because it's, and are we, Chris, actually violating the law by having a, as Trustee Samuels was saying, an appropriation that exceeds the— I know they have the ability to, but it exceeds the 5% of market value by $10.8 million.

For the record, Chris Pope, General Counsel. Let's back up. The budget works on funding codes. There's a funding code where where money goes out of the ERA. It goes out of the ERA for our budget and for these state agencies' budget.

That is their choice. The ERA, as you know, as we've discussed, is subject to appropriation, simple majority of the legislature. They could spend a lot more of that money through an appropriation should they choose to. They have chosen to support the collection efforts that lead to royalty deposits going into the permanent fund. It's a legislative decision with the governor's weigh-in about how much should come out of the ERA for the funding code called gross receipts.

We do not— we do not oversee how much of that money comes out of the ERA. The legislature and the Governor's Office does. We could provide more oversight to understand it, but it is a legislative call with the Governor's input. It's not one we control. So the draw from the PUMB is also subject to annual appropriation, even though it's got a budget recommendation of 5%.

There's also an older statute that's still on the books about a different calculation, as you know. So those are all sort of statutory recommendations about limits, but the ERA is subject to appropriation. Alaska Supreme Court's weighed in on this, and every year they decide how much they should fund for our budget and for these other state agencies' budgets. It's just part of the annual appropriation process. Follow-up, Mr.

Chair. So I, I'm actually Thank you for the education. I'm not— I'm aware of a different calculation that's on the books for the dividend. I always thought there was only one number, 5%, for the draw. So my apologies for forgetting that there was a different number.

Mr. Chair, just because this rabbit hole is fun, there's an additional draw on the Permanent Fund through the Amherst settlement money that is part of the principal of the Permanent Fund, all of the realized earnings are transferred. So you're talking about a $427 million portion of the Permanent Fund that $41 million is being transferred. So there's sub-components of the statutory framework that align to how we've been funding state services from a state wide perspective, and these are all interesting issues, but I don't— I mean, they're above our pay grade to some degree, not that you can't have an opinion, but ultimately, as previously described, the governor and the legislature determine how these resources are going to be utilized in a fashion that complies with the public policies that are in place. Well, Miss Devin, thank you, Mr.

Chair. If and when we ever are a fully independent entity, these type of things we should know about how our money is being taken.

I know our job is to oversee the investments, but— and the legislature has that authority, but it's— these little things matter, and it's important that, that we understand. Go ahead. Yeah, just to close the loop, the statute I was referring to is 37:13-14. Authority, and it has two formulas. One is income available for distribution.

That's the old formula. And the new formula is amount available for appropriation, and that's the POMV formula. They both exist in the statute. Currently, the current process is to follow the amount available for distribution— amount available for appropriation calculation, which leads to the 5% POMV. But they both exist in state law.

They're both just calculations that give the legislature and the governor a recommendation on how much should be appropriated annually to either fulfill the amount available for appropriation for the income available for distribution. And that— the older one refers to a net income, 51% of the net income over a 4-year, 5-year period. And the new formula is percentage of market value over a 5-year period. And they lead to different amounts, as you know, because you've learned about statutory net income versus amount available earnings. Sure, Mr.

Chair. Just to put a final bow on this one, that number, the $10.1 million, that's not a— I mean, you said it's a specific function for, but it's basically slush that if law focuses on lawsuits dealing with the permanent fund, great, they have it. If they don't, they get the money anyway. If DNR needs— uses the amount or they have extras, they get the money anyway. It's not a— they only use it for the function for what it was given.

They get that money to their budget regardless. And they don't give it back if they don't use it. Trustee Burney, you're correct. There is a distinction between our budget and those budgets. Our budget is an amount that could be spent out of the ERA if we need it, if we encumber it and we spend it.

If we don't, it stays in the ERA. These are amounts— these other amounts are amounts that are appropriated to those agencies to utilize and don't come back to us. Correct. Which is why the oversight over over how much they receive rests with the governor's office and the legislature because it is an appropriation out of the ERA like other appropriations. But it's a good distinction to make.

Thank you. Thanks, Mr. Chair.

Okay, let's keep moving on. Thanks, Chris, for that great segue into statutory net income. So generally accepted accounting principles require us to calculate net income in one way, and Alaska law requires us to calculate net income in a different way. So we're basically keeping two sets of books. And so the difference between statutory net income and accounting net income is that statutory net income excludes the unrealized gains and losses that are experienced in the portfolio during the period of time, and also that amount that is realized income that's designated for the Alaska Capital Income Fund, that's not considered APF statutory net income.

So for '26, we take the $10.1 billion in GAAP net income, subtract the $1.8 billion that were the unrealized gains that were experienced in the portfolio, the $41 million that we're sending to ACIF to come to the $8.2 billion of statutory net income, which you can see is significantly higher than FY25, mostly— well, mostly due to higher accounting net income.

Uh, and I think since this is something that we've put a fair amount of focus on, because the statutory net income is what is accumulating in the realized earnings line of fund balance, to look at where those earnings are coming from, from each asset class. Again, not a surprise, public equity is the biggest contributor across the portfolio. For '26, it contributed $5 billion of the $8.4 billion in realized earnings. These, these earnings include both that cash flow income that we talked about as well as the gains and losses that are experienced when we're selling investments.

Also of note, I think, here is the $1.2 billion that private equity contributed. Our portfolio is mature enough that we are in a place where it's actually contributing in a significant way to the realized earnings of the fund, which, you know, you hear— we talk a lot about, you know, how maybe private markets aren't a big contributor to realized earnings, but you can see here that that's not necessarily the case.

Uh, and then the very bottom of the balance sheet, this, um, is the changes in fund balance. This reflects the things that are not either a revenue or an expenditure but does impact, um, the fund balance during the year. So these are the transfers in of royalty revenue, uh, transfers out to, um, to the general fund primarily, and also that small transfer to the ACIF. So you can see the $535 million of royalties coming in, the PUMV transfer going out for a net change in fund balance of $6.8 billion. So you add that to the beginning balance of $85.1 to come to the $91.9 that we ended FY26.

And then this last slide just shows, um, kind of the components of that $6.8 billion change in fund balance. We have $10.1 billion of net income, um, the deposits coming in and the POMB transfer coming out, that to the $6.8 billion.

Okay, my presentation. If there are no other questions, I just There's one thing I just want to— an upcoming staffing change within the finance department that I wanted to make the committee aware of. You all have heard a lot from Jackie, and she is a huge part of the audit process for us and the monthly financial reporting, in addition to leading the private finance team. Jackie has decided to leave Juneau with her new husband, so she will be leaving APFC. We're really sorry to see her go, obviously, but happy and excited for her, for her new opportunities, whatever they are.

Jackie's been with us for 10 years. She, um, we hired her as a fresh UAA graduate, very fresh. And over the 10 years she's been with us, she's worked on every asset class and has just become a trusted resource both within the finance department and across the organization. She's gone from a fresh intern to a leader within the finance department. Department, and she has brought a tremendous amount of process improvement, streamlined work around the audit and the private finance functions.

And so we are in the process of, of filling that position. We are attempting to do that in a way that allows significant overlap with Jackie and her successor. A great processor and just wanted to let you all know that she's leaving and that we do have a plan in place to carry on without her somehow. Right. Yeah, Kristi.

First of all, Jackie, thank you for your service.

Val, Devin, we have 9 employees that work in the lower 48.

Just wanted to try to put this on the record that there are opportunities to work remotely, as we've seen with, you know, over 10% of our staff. So contemplate that as you move to— Thank you for that. Mr. Chair, thank you. Thank you for your service or your decade of time with us.

Great job, and we'll miss you. I would pile on the comments of Val and Jason that in my time here, you oftentimes have at least critiques of people, and I've only heard positive things about Jackie and her work from everyone within the organization and those outside the organization she interacts with. It's a loss for us, certainly, and we really appreciate have appreciated your, your time with APMC, and certainly I've appreciated the comfort of your presence. She's one of the early morning people, and she's, yeah, very reliable and will be missed.

Okay. Yeah, thanks, Jackie. 10 Years goes by fast, huh? Yeah, that's what always amazes me about these jobs. Yeah, no, definitely I want to pass along thanks for your service.

And yeah, State of Alaska is, yeah, this is a pretty cool place and value of a top-notch team, and that's a big part of that. Okay, anybody else? Anybody online? Trustee Samuels or Trustee Shutt or Binkley? Oh, is Trustee Binkley on?

Yes. Oh, welcome Trustee Binkley.

I'm online. No questions here. Thank you. Thank you, Mr. Chairman. Okay.

Nothing here. Okay. Thanks. And for Trustee Beekley, we just got through the detailed review of the FY26 year-end financial statements. Yes, actually, I joined a bit ago and was able to get the benefit of that.

So thanks, Val. Okay. Well, let's move on to the next item. Hey, we're about half an hour behind. Just agreeing.

So shut up, Jason. Let's move on to update on legal matters. This is informational with Mr. Pope. I will never shut up. For the record, I'm Pope, General Counsel.

I will be quite quick, but I don't think I can go backwards in time, so I can't get us back on time. The charter for for ethics, audit, and cybersecurity has a requirement that every year that I sit before you and I disclose to you any material litigation against the fund or the corporation, that I talk about whether or not we're in compliance with applicable laws and whether we've received in the past any inquiries from regulators or government agencies. Not surprisingly, I also do this same inquiry from the external audit process. In June, I get a letter from Bao asking me to disclose this same information to the external auditor. I've already handled that function, as you can imagine.

There is no litigation to report this year. This would be litigation against the corporation or the fund. We are, in my opinion, in compliance with applicable laws, and we receive no inquiries from any government regulators. Those would be things like the SEC or maybe an investigation or inquiry into compliance. So there's nothing actually to report I will say one last thing before I close up.

I also go one layer deeper. Most of our investments happen through limited liability entities. Those entities also get an annual audit, but I track the litigation at the entity level as well if I think it's material, so I'm aware of what's going on. I don't try to micromanage the litigation, but I like to know what's going on. And there's roughly 3 to 5 cases that I'm tracking right now.

We don't need to get into the weeds on those, but, um, those are all turning out well, and those would affect the value of those investments, but they also, if it were material, would get reported at the audit level for that entity. So if there aren't any questions, I'm happy to call it a day. Yeah, Steve Rooney. I'm not going to be intimidated to not ask a question. Sorry, Mr.

Chair. Chris, I don't know if it was last year or the year before, we were contemplating litigation against with the Crown for returns and what was taxable and what was not, given the state of the permanent fund and how they were just—. Whatever ultimately came of that. Yeah, yeah, sure. Where we're at, and I don't want to get into the details on the record in a public discussion, but we are very close to negotiating a resolution with HMRC, which at the time we started was Her Majesty's Revenue and Customs.

Now it's His Majesty's Revenue and Customs, but we're close to resolving that, and it would take care of all of the outstanding tax years. And it's a resolution that we think is fair to us, and they think it's fair to them. Hopefully by December I'll be able to report that that's resolved and all those tax years are closed out. Um, but I don't want to get into the details of that because we're in the middle of strategizing our theory about the case and about the negotiations and what the tax resolution should be, but it's going favorably. Good.

Thank you. No further questions, Mr. Chair. Okay. Any other questions online for Chris?

Okay. Very nice. I think we're good. Thank you. Okay.

Next up, well, we had a break scheduled, but I think what we'll do is, since it's the cybersecurity update and we were intending an executive session on this one, If we could just move directly into executive session and then we can do our break. We'll give everybody a 5-minute break before we do the executive session after we go into executive session. So, yep. In accordance with Alaska's Open Meeting Act, I move that the committee convene in executive session to discuss an update regarding APFC's IT security systems and procedures. This topic is appropriate for executive session because the immediate knowledge of this information could have an adverse effect on the investment management of the permanent fund and in turn the finances of the state.

Do I have a second? Second. Okay, any, uh, questions or thoughts on that before we— are we going to take a roll call on this one, or is everybody good with it? Okay, okay. Any objections to going into executive session?

Okay, hearing none, it sounds like it's unanimous consent to move into executive session, so that's what we'll do.

Okay, we'll call this meeting of the Ethics, Audit, and Cybersecurity Committee back in session after the executive session on the cybersecurity update. While in executive session, the committee considered only the matters mentioned in the motion and took no action. Okay, so we'll move on to the next topic, which is the internal control framework update. This is an informational item. Um, looks like it starts on page 78 of your packets, and this is Sebastian.

Thank you, Chair, trustees. Uh, so this is just an update of the risk and control self-assessment.

No. Okay, that was me.

Now you try it.

Oh, okay, well, working earlier. It's on.

It's not. Sorry. No, that's okay. There we go. That was Yeah.

Okay. So, uh, at the last meeting, I guess it was the one before that, we presented the risk and control self-assessment review for finance, and this is the second one we've done for the investment ops function.

Just to sort of, uh, reiterate or sort of remind people about what this is about, it's basically to mitigate operational risk. Unlike investment risk, which is something that we want to take and we pursue, operational risk is something that we do not want to take, but is of course a part of our operational framework. So anything we do in terms of trading or finance or HR or risk involves operational risk, and the objective here is to try and minimize operational risk. So what we have as an internal process is a risk and control self-assessment. It's called a RCSA process, which basically essentially is to just look at every activity within a function, identify the potential risks of that activity, and then look at the mitigants or controls with, for that particular risk, and then look at the residual risk and make sure that it is within risk appetite.

So, again, RCSA is much more than a simple mechanical exercise. It's also a discussion forum for each function to talk about the potential risks, not investment risk, but the operational risks with risk, and then basically, uh, uh, with the risk management function, and then to escalate that if required internally.

So I've got a schematic on page 83 which outlines the different steps within the RCSA, and, and, you know, that's sort of self-explanatory. But I, I want to highlight one point, which is that the first step here involves a documentation of the different steps within a particular activity. So that in itself is a huge a huge control aspect. We are basically documenting the activities for every single function within the organization. It's not completed, but that's the process.

And then moving on to the investment ops function, we have— so this isn't always in a collaborative effort. We within risk basically sit with the functional leads or the functional a team within, within, for example, in this Investment Ops, and then look through every single activity that is done there. We basically list those activities. So there's total number of 35 activities that the function along with risk has identified, and then basically go through each activity. I've not listed the whole activity list there, but have provided a sort of illustrative example of what activity.

So basically what we try and do is, uh, discuss that activity with the function, identify, uh, the inherent risks, uh, work through the controls that are already in place, uh, and then measure what is a— what is the residual risk of that particular activity, and then determine if it's within the risk appetite. So what we have for that is a template where the, the threshold or the risk appetite level is 3. So anything that's above 3 in terms of likelihood and impact basically requires action. And for Investment Ops, there was just one activity which had a residual risk. So there are a number of activities which had inherent risks higher than 3, or just one with a residual risk of, uh, impact likelihood factor of greater than 3.

And that's since been resolved.

Uh, that sort of concludes the presentation. Uh, the next steps are basically look at, uh, the different functions within the organization. Organization. We've got HR, admin, risk, and last but not the least, the investment.

That sort of concludes my presentation, Chair. So if there are questions, happy to answer. Yeah, thank you, Sebastian. Um, any questions from trustees?

Okay, yeah, thanks for the presentation.

Okay, let's move on to the next item, which is the ethics update. This is informational. This could include a possible executive session. And just to remind the trustees, so our duties and responsibilities under the charter, we review quarterly reports of the Ethics Act disclosures made at the Attorney General, and then we have that opportunity to discuss in executive session if we so choose. And then we also may discuss with the last permit fund corporation, does it need an ethics supervisor, any declaration of the potential ethics act violation?

So I believe, let's see, Mr. Pogue, are you up on this one? Your name's first. Yeah, we have also— So there were no reportable ethics violations. For the past reporting time frame since the last meeting. Uh, so that was the report for the—.

That's a great report. Yes, I like that. Okay, any trustees, any, um, questions or comments on this agenda item? There's information.

Okay, well, that puts us right down to being almost right on time, so that is great. Oh, did you have another question? No, I agree. Okay, so we'll move down to other matters and trustee comments. So I'll just open it up to trustee comments first.

Maybe we'll start with the folks online. We could start out with Trustee Beekley. Any comments or thoughts as we close this out today? Yes, Mr. Chairman, thank you. Very enlightening.

Uh, appreciated the committee meeting and being able to join all the trustees and staff on this committee. So thanks, and I appreciate your indulgence with my, uh, participation and, uh, being a little late to the beginning of the meeting. So thank you, and way to get us back on track. Yeah, thank you, Trustee Beekley. Yeah, thanks, thanks for making the time.

We always appreciate your participation. Absolutely. Okay, how about Trustee Samuels? Yeah, thank you, Mr. Chairman. I'll ditto what John just said too.

I appreciate your indulgence with me being late. I was trying to take advantage of the opening day yesterday and today, and unsuccessfully, but I really appreciated the discussion on the cybersecurity and how thorough that was. That was I thought that was interesting, and I agreed with Chair Burney's assessment that if we had to take a couple of bucks at it, I would tend to lean in that direction as well. But thank you. Thank you for all the information.

Okay, yeah, thank you, Trustee Samuels. Trustee Shutt. Yep.

Similarly, thank you for having me online remote to listen in today. I appreciate specifically the continued focus and progress on our cybersecurity regime and upgrading the cybersecurity, you know, human system as well as the policies and hardware to protect the overall assets and functionality of of the APFC. So thank you for that continued work.

Yeah, thank you, Trustee Chatz. Trustee Gross? I don't have any comments. I agree, very robust discussion on cybersecurity. That was really good.

Thank you. Awesome. And then Trustee Bruni, we'll limit your comments to 1 minute.

I just want to thank staff. Scott did such a great job with the report to us. I know he puts his heart and soul into that and gets a lot of grief from trustees, especially me, but like, great job. And it's obviously very important that we are protecting— I don't know if he's here, but we're protecting this asset. But huge kudos to him.

Sebastian, as always, great job. Thank you. And Val, to you and your team, and especially Jackie, phenomenal. And KPMG, thank you for all you've given, Mr. Chair.

Great, great meeting. Thank you. Yeah, thank you. Yeah, and I'd reiterate those comments. Yeah, I appreciate all the materials.

It's just super informative and engaging. I think, you know, I really like that we add the cybersecurity and the ethics aspects to it. I think it works well, and these meetings go quick, and we get a ton of information. So And yeah, I think it definitely made the corporation in a better place to be able to have these things focused. So yeah, okay, well, yeah, appreciate that.

I think with that, we'll go ahead and I'll ask for a motion to adjourn.

So move. This is second. Okay, I got a motion from Trustee Bruni and a second from Trustee Samuels. Okay, with that, we're adjourned.