Audit committee accepts three clean audits, renews Altman Rogers contract for one year

The Fairbanks North Star Borough Assembly Audit Committee accepted unmodified audit opinions for three entities and approved a one-year renewal of the external audit contract with Altman Rogers and Company at a meeting on Jan. 16.

Auditor Brian Kupelik, a partner with Altman Rogers and Company, told the committee that "all 3 entities were clean audit opinions," meaning the firm issued unmodified opinions on the financial statements for the Interior Alaska Natural Gas Utility (IGU), the Fairbanks North Star Borough School District and the Fairbanks North Star Borough. Kupelik said the firm also issued unmodified opinions on federal and state compliance for the borough and the school district; the IGU was not subject to a federal single-audit this year.

The committee was given an overview of audit scope and methods. Kupelik described a testwork-based approach that focuses audit procedures on areas of higher risk and on transactions above materiality thresholds. He said materiality was "maybe somewhere in like the 300,000-ish range for the borough," with a similar but slightly smaller threshold for the school district and "probably around 75 to, you know, a hundred thousand for the... utilities." He also explained the difference between a "significant deficiency" and a "material weakness," and noted that the standard auditor wording includes a statement that material weaknesses or significant deficiencies may exist that the audit did not identify because auditors do not review every transaction.

The committee voted unanimously, 5-0, to accept each entity's financial statements as presented. The recorded roll-call votes for the items were read by the clerk and recorded as unanimous.

The committee then considered renewal of the borough's external audit services contract with Altman Rogers and Company. April Trickey, staff, said the contract includes the borough and the school district, that the current performance period ends Feb. 28, 2025, and that the contract allows two additional one-year renewal options. The audit committee approved the first one-year renewal option, extending the engagement to cover FY2025; the motion passed 5-0.

Why it matters: Acceptance of the financial statements and compliance opinions closes the external audit cycle for fiscal years 2023–2024 and signals that the auditor found no material misstatements or compliance exceptions requiring reportable findings. Renewing the audit contract maintains continuity of external oversight for the borough and school district into FY2025.

Votes at a glance

- Interior Alaska Natural Gas Utility financial statements, FY2023–FY2024 — Motion to accept moved by Mr. Guttenberg; seconded by Ms. Wall; vote 5-0; outcome approved.

- Fairbanks North Star Borough School District Comprehensive Annual Financial Report, FY2023–FY2024 — Motion to accept moved by Mr. Guttenberg; seconded by Mr. Schilling; vote 5-0; outcome approved.

- Fairbanks North Star Borough Comprehensive Annual Financial Report, FY2024 — Motion to accept moved by Mr. Guttenberg; seconded by Ms. Wall; vote 5-0; outcome approved.

- Renewal of external audit services contract with Altman Rogers and Company (first of two one-year renewal options, covering FY2025) — Motion to approve moved by Mr. Guttenberg; seconded by Mr. Schilling; vote 5-0; outcome approved.

Committee discussion and context

Committee members asked questions about how the IGU audit differs from the borough and school audits, whether auditors compare utility filings to submissions to external regulators, and how auditors choose materiality thresholds. Kupelik said audits are tailored to each entity's principal transaction cycles (for IGU, billing and revenue cycles; for the school district, grant and federal program compliance). He said the firm checks that financial statements conform with Generally Accepted Accounting Principles (GAAP) and applicable utility accounting guidance but does not, as part of the financial-statement audit, independently reconcile every filing made to other agencies.

Committee members also pressed for clarity on the boilerplate language in the auditor's report that notes material weaknesses or significant deficiencies may exist but were not identified; Kupelik explained this language reflects that auditors do not examine every transaction and that findings are based on tests of internal controls and sampled transactions.

No audit findings requiring corrective action were announced at the meeting. The committee limited debate to audit-related items and adjourned after approving the contract renewal.