Sen. Lyda Green, R-Wasilla, originally requested the audit, which was split into two parts with the first part released in May. The second part was released Nov. 7.
The second part focused on three main questions: How the state Creamery Board, which has oversight of Mat Maid, handled $600,000 it was given by the state last year; whether the board properly disposed of Mat Maid property in Palmer and Anchorage and correctly accounted for the proceeds, and whether the board's decision to lease nearly six dozen pieces of Mat-Maid equipment to the new dairy near Palmer was appropriate.
The report concluded Mat Maid property was properly disposed of, and found the lease of the equipment could potentially bring in more money than if the equipment had been sold outright.
It also found no problems with how the board spent the $600,000, which included disbursing about $534,000 for personnel services and about $66,000 on building expenses. But the report said the board erred in paying the state back for the $600,000 after selling Mat Maid's plant in Anchorage earlier this year.
Instead, the auditors stated, the money should have been given to the state Agricultural Revolving Loan Fund, which is the sole shareholder of Mat Maid and assumed Mat Maid's debts when the state took over the company in the mid-1980s.
Creamery board chair Kristan Cole disputed the audit's findings in a written response included with the audit. In her letter, Cole stated that while the state may not have required the board to return the money, it was a "good faith gesture" to do so.
The report also found that some actions taken by the Creamery Board could be perceived as showing favoritism to the Matanuska Creamery, a new dairy operation near Palmer that opened up after Mat Maid was shut down.
For example, auditors noted the board approved pulling equipment from a proposed Mat Maid sale and instead leasing it to the new Matanuska Creamery. While within the board's bounds as a private commercial enterprise to pull equipment from the sale, such actions would have violated state regulations overseeing bid solicitations, the audit stated.
The audit also criticized the board for giving no public notice that it was soliciting bids to auction Mat Maid equipment. While again within the board's purview as a private entity, the audit stated the action was inconsistent with how state agencies are required to conduct business.
In her response, Cole said the Creamery Corporation was not required to follow "state mandated solicitation and disposal procedures."
Still pending for the Matanuska Maid dairy are two outstanding lawsuits from two former employees: CEO Joe Van Treeck and Palmer bottle plant manager Terry Clark.
TO VIEW A COPY of the audit, go to:
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