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Obscure federal commission's IG says abolish it

View Denali Commission funds towns in Alaska in a larger map

A federal agency's internal watchdog has recommended to Congress that it shut down the agency he audits.

The 15-person Denali Commission is an unnecessary middleman that re-distributes federal tax dollars among government agencies and public utilities in Alaska, according to Mike Marsh, the commission's inspector general.

For example, Denali distributes money from the U.S. Department of Agriculture to the state of Alaska and the Alaska Village Electric Cooperative, both of whom know more about their needs than the commission.

For medical clinics, Denali takes money from the Department of Health and Human Services and sends it to the state or to a congressionally chartered nonprofit called the Alaska Native Tribal Health Consortium.

And Denali receives money from the Department of Transportation, then hosts a board selected by the governor of Alaska to decide who gets it, which the governor could more easily do in-house.

“This circular delivery system signals a further question as to what Denali’s layer adds to the process,” Marsh told Congress in October.

“Beneficiaries sometimes challenge why their funding from Congress needs to be reduced by the administrative costs of running the Denali Commission,” he said.

The commission's current annual budget is $14 million, down from as much as $150 million in 2006.

Commission officials admit their staff is too small to have any expertise in a particular subject matter, but argue that the agency's main function is knowing how other government jobs operate.

“At this point, I recommend that Congress no longer send Denali an annual ‘base appropriation.' This will give Denali an incentive to leave the federal nest and chart its own course as a non-federal entity,” Marsh said.

Alaska hardly needs special help from the federal government, Marsh wrote, since “Alaska has an oil-based savings account whose earnings help fund the state government” and the state has no income or sales tax and instead pays each resident a dividend each year.

Sometimes, the commission has not seemed to know what to do with all its cash. In 2010, the commission received $1 million from an unspecified department for a “training program,” according to Marsh, but less than $20,000 was actually spent, and $900,000 was ultimately sent back to Congress.

The Office of Management and Budget has said that other federal programs duplicate what Denali does, but Denali does it with less accountability.

For example, unlike the Department of Labor, the commission never publishes job-placement outcomes following its training programs.

As the Washington Examiner's reporting in 2013 on the Federal Mediation and Conciliation Service showed, waste and a dubious mission can go undetected for decades at a federal agency so obscure that it's hardly known to the general public.

There are some 150 such tiny, independent commissions and agencies in the federal government.

Denali executives declined an Examiner request for comment on the Marsh report or to defend their organization.

The Examiner reported Jan. 9 that the Denali staff required grant recipients to sign contracts promising to open savings accounts to end their need of federal assistance, but then Denali staff all but forgot the agreements.

Marsh offered his conclusions to Congress in October, but there has been no response, even from lawmakers who say they're eager to trim waste.

That includes Sen. Claire McCaskill, the Missouri Democrat to whom Marsh wrote and who last month held a hearing aimed at consolidating or eliminating small agencies. Her office did not respond to an Examiner request for comment.