From the view of Nome Joint Utility System’s 2,311 customers, the utility company appears to be doing exactly what customers expect. The lights stay on. Clean water flows from the tap. Sewage is carried away.
But the public and the elected board responsible for overseeing its management are largely in the dark about how the city-owned utility raises and spends money.
NJUS is five years overdue for financial audits. Its board can’t make informed budget decisions because management has also failed to produce a budget for five fiscal years.
“I think that this is insane, not having spending money and stuff, and not having any approval or anything like that,” NJUS board member Carl Emmons said at Tuesday’s meeting.
The bookkeeping failures have caused real harm to the Norton Sound community. Missing reports led to a temporary freeze of state funding intended to lower rural energy costs earlier this year. Without its audits, the utility is ineligible for many state infrastructure programs, which also help keep costs down for paying customers.
The utility company, along with the local school district, are components of the City of Nome, albeit with their own boards and managers. The utility ultimately answers to the Nome Common Council. While the panel of six councilmembers have changed over the years, the overdue audits remain a common topic at the meetings.
John Handeland has served as general manager of the utility for over a quarter of a century. He’s also served as mayor of Nome twice – between 1985 and 2000 and again between 2020 and 2025. In his capacity as GM of the utility, Handeland told the council in April that the first of four overdue audits would be published soon.
“Just what I was printing there was the latest draft for publication of our first audit that has been done,” Handeland told the council at the April 27 meeting. “It's been reviewed by various others, and I'm just doing a final look at it.”
In an interview with KNOM Monday, Handeland said the missing 2021 audit was indeed complete and could come as soon as August. He said some unexpected medical leave was to blame for the latest delay.
“It won't be by the end of the month because I was gone for 10 days unexpectedly, and so there was a couple things that I needed to do,” he explained.
He said workers from the audit firm, BDO, made another visit to Nome in July to continue work on the audits between 2022 and 2024. Handeland said those would be bundled and released together as a single report.
When asked why the utility is so far behind, Handeland pointed to staff shortages and turnover in the accounting department over the years.
“Just for absence of personnel, we had had a break there, and so our concentration was on paying our bills, paying our people, collecting our revenues,” Handeland said.
When the cracks started to show
In June 2025, the NJUS board met for a special meeting to discuss overdue fuel payments to its primary supplier, Crowley Fuels Alaska. At one point, it owed over $6 million to Crowley. It’s not unusual for utility companies like NJUS to finance its massive fuel bills, but its inability to make the payment on time was a "red flag" for board member Larry Pederson.
Handeland told the board that $500,000 was working through a federal clearinghouse, but ran into technical issues on the way to the utility’s coffers.
“The system simply was stuck and broken,” he told the board.
Then-board chair Carl Emmons said the late payments were just the start of his concerns. He said an auditor from BDO told him that the firm was still waiting on inventory figures from 2021 to finish that year’s audit.
“She said or indicated that the 2021 – all the paperwork part of the audit was good, you know, and that was all done. It was just waiting on the inventory counts,” Emmons said.
That 2021 audit is still pending, 13 months later. BDO did not respond to a request for comment.
Emmons implored Handeland to involve his coworkers in the process.
“I'm going to ask John not to try to do everything. You know, we got to delegate here,” Emmons said.
“And we are,” Handeland retorted.
“We will,” Emmons said.
NJUS’ missing budget
Tensions over the overdue audits and missing budget came to a head at Tuesday’s NJUS board meeting. Emmons asked Handeland to draw up a budget, saying even something on a “bar napkin” would suffice.
“It's only responsible to at least put some kind of limits on how much money are we spending, and where it's going, and that kind of thing, and maybe some people knowing where it's going,” Emmons said.
“We will get a budget, trying to get the actual numbers,” Handeland responded.
“If you don't, I'm going to get up on the table, I'm going to jump up and down and pound and stuff,” Emmons said, peering across at Handeland while lightly pounding his fists on the table.
Emmons suggested the board pass a resolution requiring board approval for any expense over $10,000 while it waits for a budget.
“We get looked at sideways by the community because our manager is just doing whatever the hell he wants, you know? And that's the perceived thing. I don't know that's necessarily true,” Emmons said.
‘It's not like we're hiding anything’
NJUS’ unfinished audits could affect more than the public’s understanding of the utility’s finances. They could also complicate its ability to secure funding for future infrastructure projects.
State and federal agencies typically ask utilities for audited financial statements before approving grants or low-interest loans. Alaska’s State Revolving Fund, which finances drinking water and wastewater projects, requires applicants to submit their most recent audit as part of a financial review. State Revolving Fund Manager, Young Ha, said NJUS has received four below-market-rate loans from the program since 2015.
The utility has five projects – including a new sewer main on Front Street, an emergency response facility, and a tank farm relocation – on a statewide clean water priority list. But Ha said the utility hasn’t submitted applications for any of them.
The consequences of falling behind on required reporting have already surfaced elsewhere. Earlier this year, the Regulatory Commission of Alaska suspended NJUS’ Power Cost Equalization payments — a program that helps reduce electricity costs in rural Alaska — until the utility submitted overdue reports. A commission financial analyst confirmed to KNOM that NJUS later filed the missing reports and the payments were restored before it impacted customer’s bills.
When asked whether NJUS was under any threat of defaulting on its loans or filing for bankruptcy, Handeland said there was “not a chance”, and that he would work on addressing a number of misconceptions about how the utility operates.
“It's not like we're hiding anything,” he said. “It's just we're concentrating on keeping the lights on and the water running.”
The Nome Common Council’s next meeting is scheduled for Monday, July 27. KNOM will livestream the meeting on Facebook and YouTube.
