Juneau gets clean audit despite control gaps, three-month delay

The City and Borough of Juneau received a clean audit for fiscal year 2025, but the report came three months late and flagged control problems that let $21 million in errors slip through.

Auditor Karen Tarver told the Assembly Finance Committee on June 3 that the audit was issued March 31, 2026, instead of the usual mid-December. The delay came from Bartlett Regional Hospital's late audit, finance department turnover, and accounts that had not been reconciled when auditors arrived.

Auditors found a $10 million bond timing error, an $8.6 million harbor lease valuation error, and a $2.7 million sales tax calculation error. All were corrected during the audit.

Two material weaknesses

The first material weakness involved insufficient review of reconciliations for debt, tax accruals, and unearned revenue. Tarver said the reconciliations had not been reviewed or tied to account balances before being handed to auditors.

The second material weakness involved harbor lease receivables. Tarver said communication between Harbors and Finance was not sufficient and that variable leases tied to appraisals or CPI had been valued incorrectly.

Auditors also found a significant deficiency in how the city prepared its compliance schedule, which reconciles grant information.

Despite the findings, Tarver said the city's overall preparation has improved. "Nothing led us to conclude that amounts were wrong in the financial statements as they were issued," she said. "It is just what we see is that there is some improvement that can be done over the reconciliation and review process."

Bartlett audit also delayed

Bartlett Regional Hospital's auditors issued their report February 27, 2026, with one material weakness over financial reporting. The school district's auditors issued their report November 25, 2025, with clean opinions.

Tarver said the finance department has reorganized how it assigns work so that multiple accountants handle specific departments or grants instead of relying on one person. The city's fiscal year 2026 audit is already underway.