Consultants say new tool flags about a quarter of Kodiak harbor billing records for review

Consultants Tim Altman and Slava Lounev told the Kodiak City Council at a Tuesday work session that a new tool flags about 24% to 25% of harbor billing records tied to vessel agreements for review. Lounev, of Lounev Advisory Services, said they are "flags, not errors." The analysis covered only billing linked to those agreements, not electricity readings and other charges still recorded by hand.

The work responds to the city's fiscal 2025 audit, which cited a significant deficiency in internal control over harbor billings after auditors found five errors in 40 tested transactions, in moorage rates, tax, electricity and dockage.

Altman, of TA Accounting and Consulting, blamed "some implementation errors" in billing software installed in mid-2024, along with boat lengths that did not match vessel agreements. Lounev said outdated rates have been fixed, except for one rate setting still reviewed manually.

Harbor staff scanned about 1,300 files, which the tool now checks against roughly 800 monthly invoices. Staff then review 60 to 70 flagged statements, the added control auditors had found lacking, Lounev said.

"The errors go both ways," he said. Overbilled customers received credits, and whether to collect underbillings is a management decision.

Councilman Nick Mangini said length mismatches cost the city $131,000 in fiscal 2026. He said a new insurance clause in harbor agreements would let the city see the boat lengths owners report to insurers.

Altman said the books are now corrected, but whether the finding clears in the fiscal 2026 audit is up to the auditors. The city's auditor is Altman, Rogers & Co., which Altman co-founded, according to council minutes from April, when the council hired his firm and Lounev's for up to $60,000.