CBJ audit comes back 'clean'

An audit of the City and Borough of Juneau’s finances for 2013 came back “clean,” according to the independent auditing firm contracted to inspect the city’s books.


Max E. Mertz of Elgee Rehfeld Mertz, LLC, told CBJ Assembly Finance Committee members during a meeting Wednesday evening that they did not find any significant findings when reviewing CBJ’s Comprehensive Annual Financial Report, federal and state grants and airport facility charges.

“The CBJ audit results were clean, we had no significant problems there,” Mertz said, adding, “It went much more smoothly then it has the last couple of years, and so no significant matters there.”

The lack of any findings is an improvement over last year’s audit (conducted by the same limited liability company), which found two significant findings for failing to properly document tasks associated with the annual close of CBJ’s accounting records and the production of financial reports. Those failures were attributed in part to city staff turnover and not properly preparing new employees how to complete the rather complex tasks.

This year, however, the “significant finding” status was downgraded to a mere “suggestion” status. Mertz credited city staff for the improvement.

“Last year, they were kind of bigger issues, and they’ve been working to address them so they’re down to more of a just a suggestion that they need to continue to work on,” Mertz told the Empire after his presentation. “They’ve been very dedicated and working very hard, the city, to address it.”

Mertz recommended CBJ develop an accounting procedure manual to ensure consistency over time in light of staff turnover, and to also evaluate year end accounting closing procedures to ensure financial reports are accurate.

“It’s a very complex process to close a set of books for the city, and they had some pretty significant turnover in critical staff, and so when the staff retired they didn’t really have a good handle on — it wasn’t really documented what they needed to do,” Mertz said in an interview. “So the idea of the procedures manual is to say ‘OK, what is it we need to do in this document.’ For the close piece, which is the actual close and the physical going through the books and records, is making sure everything’s closed the way it needs to be.”

The “significant finding” status in 2012 ended up not adversely affecting the city’s finances, Mertz said.

“The risk is that there is some reporting deadlines that you’re required for bonding purposes, and then some state of Alaska reporting requirements that you have to meet, and that can (have an) impact,” he said. “We didn’t push past any of those last year; the risk was they could have.”

He added, “They’ve gotten their feet back under them now.”

City ordinances require the city’s finances be audited by an independent certified public accountant on an annual basis. The state and federal government also require the city to be audited as a provision to receive funding.

The audit cost approximately $133,000. Elgee Rehfeld Mertz, LCC has been contracted to conduct it for CBJ each year since 1993.

Mertz noted it is not a “light undertaking” — it began in August and was completed in December. It also covers the Juneau School District and Bartlett Regional Hospital, and Mertz said those results have already been presented to their respective boards.

• Contact reporter Emily Russo Miller at 523-2263 or emily.miller@juneauempire.com.


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