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Sitka auditor reports draft FY2025 audit is 'substantially complete' and expects clean opinion
Summary
BDO auditors told the Sitka Assembly the borough’s FY2025 audit is substantially complete and that they intend to issue an unmodified (clean) opinion once the school district finalizes its statements; auditors flagged routine control commentary about ‘‘super-user’’ access and summarized fund balances and enterprise results.
Joy, the BDO lead auditor, told the Sitka City and Borough Assembly on Jan. 27 that the borough audit work is substantially complete but issuance is delayed pending the school district’s finalized financial statements.
"We do plan to issue an unmodified opinion," Joy said, adding the firm found no reportable fraud, abuse or significant disagreements and that most recommendations were management-letter items rather than material adjustments.
The auditor walked the assembly through financial highlights: total assets reported at about $685 million, net position near $474 million (with roughly $293 million invested in capital assets), and an unrestricted net position around $123 million. On the general fund, she reported a fund balance with $8.9 million unassigned and total general fund revenues of roughly $38 million against expenses near $32 million, producing a positive change in fund balance.
Joy said the audit team focused additional testing on IT controls (noting several ‘‘super users’’ in the finance system), management override of controls and grant allowability. "You do have some super users in your system," she told the assembly, calling it a control-deficiency-level management comment rather than a formal finding.
Assembly members questioned whether the super-user arrangement is acceptable for a jurisdiction of Sitka’s size; the mayor and members noted prior clean audits and described supplemental, outside monitoring controls. Joy recommended continuing supplemental review and monitoring.
On enterprise funds, the auditor summarized operating results: the electric utility showed positive operating income (~$3.8 million), water showed a small operating loss, and harbor operations were operating at a cash positive when depreciation is excluded. She flagged the landfill post-closure liability and pensions/OPEB estimates as significant estimate areas disclosed in the notes.
The audit presentation served principally as an informational draft; Joy said BDO will issue final reports once the school district completes its audit, expected in the next several weeks. The assembly thanked the auditors and staff for their work and invited additional questions during the review period.
