The Alabama Institute for Deaf and Blind was cited for violating federal procurement requirements, failing to comply with state law and maintaining weak financial controls, according to a newly released audit from the Alabama Department of Examiners of Public Accounts.
The audit, which covers the fiscal year ending September 30, 2025, identified four reportable findings, including a material weakness involving how the institute handles federal grant purchases and failures to remit unclaimed property to the state. The findings mark at least the third consecutive year that state auditors have cited AIDB for compliance deficiencies.
The most significant finding involved the institute’s administration of federal special education grant funds provided through the U.S. Department of Education. Auditors questioned $264,966.68 in spending, meaning the expenditures could ultimately be deemed unallowable and subject to repayment if federal officials determine they violated grant requirements.
According to the audit, AIDB awarded three contracts totaling $188,631.68 without obtaining competitive price quotations from an adequate number of vendors, as required under federal procurement standards. The institute also purchased $76,335 in visual aid equipment without following competitive bidding procedures required under its own purchasing policies.
Auditors further found that AIDB failed to document whether vendors had been suspended from doing business with the federal government before awarding contracts, a standard compliance requirement for entities receiving federal funds.
The report also found that the institute’s procurement policies remain based on outdated state law.
AIDB officials acknowledged the deficiencies and told auditors that procurement policies would be updated immediately.
The audit also highlighted a recurring issue involving Alabama’s unclaimed property laws. For the third straight year, auditors found that the institute failed to turn over uncashed payroll checks to the Alabama State Treasurer’s Office.
As of June 30, 2025, AIDB had 106 payroll checks totaling $26,038.09 that were more than 1 year old and should have been reported and remitted to the state under Alabama’s Uniform Disposition of Unclaimed Property Act. Auditors noted that the institute has no policy for annually reviewing outstanding checks to identify property that must be transferred to the state, the same issue cited in the agency’s 2023 and 2024 audits.
The report also identified weaknesses in AIDB’s financial recordkeeping. Auditors said the institute restated its beginning net position by more than $1.2 million to correct prior-year cash balance errors but could not provide documentation supporting $436,276.18 of those adjustments, preventing auditors from determining whether the entries were appropriate.
The institute also faced issues in accounting for capital assets, including buildings, equipment, vehicles and library collections. Auditors found a discrepancy of about $1.9 million between AIDB’s detailed capital asset records and its general ledger. They also identified nearly $374,000 in capital purchases that were never recorded as assets, more than $1.3 million in software costs that were not capitalized under governmental accounting standards and a $2.99 million adjustment to library collections that lacked supporting documentation.
AIDB disputed part of the finding, arguing that some software implementation costs should not yet be capitalized because the project remains in progress.
Despite the findings, state auditors issued an unmodified opinion on the institute’s financial statements, meaning they concluded that the financial statements fairly present AIDB’s financial condition in all material respects.
AIDB’s net position declined from a positive $593,123 in fiscal year 2024 to a negative $1.28 million in fiscal year 2025, a nearly $1.9 million swing. Cash and cash equivalents also fell sharply, dropping from about $15.9 million to $6.2 million.
Management attributed the decline to increased capital spending, lower operating revenue and reduced capital grant funding.
Meanwhile, total liabilities increased by more than $38 million, largely because of a dramatic increase in the institute’s share of statewide retiree health care obligations. Its net other post-employment benefits liability rose from about $13.7 million to $67.4 million following updated actuarial calculations.
The institute remains heavily dependent on state funding. During fiscal year 2025, AIDB received $80.7 million in state appropriations from the Education Trust Fund, accounting for about 59 percent of total revenue. It also received about $16.6 million in federal and state grants and generated $27.6 million in product sales through Alabama Industries for the Blind.
Founded more than 150 years ago, AIDB describes itself as the world’s most comprehensive education and rehabilitation system for individuals with sensory disabilities. The organization served more than 31,000 children and adults during fiscal year 2025 and employed about 1,228 people.
The institute operates the Alabama School for the Deaf, the Alabama School for the Blind, the Helen Keller School of Alabama, the E.H. Gentry Technical Facility, Alabama Industries for the Blind and 10 regional centers across the state. It is also expanding services through a new 202-acre campus in Decatur that will house additional programs and partnerships.
AIDB President Dr. Dennis Gilliam and Chief Financial Officer Mark Richenderfer attended the audit exit conference and submitted a corrective action plan stating that most of the issues identified by auditors have already been addressed or are in the process of being resolved. The plan includes updating procurement policies, improving procedures for handling unclaimed property and strengthening controls over financial documentation and capital asset accounting.
