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Auditors give Kenai a clean report, note minor adjustments and recommend control reviews
Summary
Independent auditors told the Kenai City Council they found only minor adjustments to the 2025 financial statements, no uncorrected misstatements, and recommended routine reconciliations and periodic reviews of system access.
The Kenai City Council on Thursday received its annual audit and a largely positive assessment from the independent auditor, who said the city’s finance team prepared a thorough set of statements and cooperated fully during the process.
"We did not identify any... uncorrected misstatements," auditor Ms. Mariner said, noting only a few minor journal adjustments — including a stale airport check reversal, a $149,000 increase to reported investment income, and a reclassification related to land sales. She told council those changes did not affect fund balance and the city corrected them voluntarily.
The presentation highlighted the city’s $26,000,000 in unrestricted net position and showed governmental funds with roughly $35 million in revenues versus about $29.5 million in expenditures, a net surplus driven in part by investment gains. Ms. Mariner cautioned that investment income can fluctuate with market conditions and encouraged council to consult the notes and the management discussion and analysis for details.
On internal controls, the auditor said the city’s small staff means multiple users have administrative access to the general ledger — a common operational reality in Alaska — and recommended annual reviews of who retains those rights. "Controls are really powerful if they’re preventive," she said, and urged continued detective review controls to ensure entries are appropriately reviewed.
Council members asked follow‑up questions about outstanding checks and whether prior segregation‑of‑duties issues had been corrected. Ms. Mariner said corrective steps were taken and reported that no prior‑year findings remained as formal, reportable findings this year.
The audit also called attention to the congregate housing enterprise fund, which operated at a reported operating loss of about $58,000 in 2025 and did not fully cover depreciation of roughly $155,000; staff noted the fund is cash‑positive but not recovering the building’s long‑term costs through current rates.
The report will be posted with the council packet and staff encouraged council to contact the finance department for further questions as they review the full 118‑page document.
