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BDO outlines 2025 audit plan for City of Kenai, flags grants and IT access as key risks
Summary
BDO presented the city’s 2025 audit plan, saying fieldwork will start the week of Nov. 17 with a January issuance target and identifying revenue recognition (grants), management override, and IT super-user access as significant risks.
Michelle Kesey, assurance director with BDO USA’s Anchorage office, presented the City of Kenai’s 2025 audit plan during the Oct. 1 council meeting, describing the audit scope, timeline and areas of higher risk.
Kesey said planning began in July, interim procedures were performed during August and September, final fieldwork is scheduled for the week of Nov. 17 with follow-up into December, and the firm plans to issue audit reports in January. "We started planning for the audit in July ... our plan is to be on-site the week of November 17 to start final field work," Kesey said.
BDO will audit the financial statements for the year ended June 30, 2025, and perform procedures on the schedule of expenditures of federal awards and the schedule of state financial assistance for the same period. Kesey said the firm will test compliance with laws, regulations, contracts and grant agreements to the extent they could have a direct and material effect on the financial statements, and will consider internal controls over compliance for major federal and state programs.
Kesey identified three focal risk areas for additional audit work: revenue recognition (particularly grants), management override of controls and IT super-user access and segregation of duties. "When something is maybe considered a significant risk versus a normal risk, it basically means that we're gonna do a little bit more audit work and get a higher level of assurance over those areas," she said.
She also noted BDO will use personnel from an affiliate to assist the engagement, under direct supervision of the engagement partner, and outlined upcoming Governmental Accounting Standards Board (GASB) updates the city should expect to address in coming reporting periods.
No formal council action was taken on the audit presentation; council members asked questions about meeting procedures and GASB changes, and Kesey said BDO will provide a summary at audit completion and will meet with the mayor and council as part of the audit process.
Ending: Kesey provided contacts for the engagement team and said any changes to the plan will be documented in the final audit communications to the city and the council.
