diff --git a/packages/api/src/lib/errors.ts b/packages/api/src/lib/errors.ts
index df38cce..596f664 100644
--- a/packages/api/src/lib/errors.ts
+++ b/packages/api/src/lib/errors.ts
@@ -11,3 +11,7 @@ export function badRequest(c: Context, msg = "Bad request") {
 export function unauthorized(c: Context, msg = "Unauthorized") {
   return c.json({ error: msg, status: 401 }, 401)
 }
+
+export function serverError(c: Context, msg = "Internal server error") {
+  return c.json({ error: msg, status: 500 }, 500)
+}
diff --git a/packages/api/src/middleware/auth.ts b/packages/api/src/middleware/auth.ts
index dde32d9..c30fb97 100644
--- a/packages/api/src/middleware/auth.ts
+++ b/packages/api/src/middleware/auth.ts
@@ -1,4 +1,7 @@
 import type { MiddlewareHandler } from "hono"
+import { serverError, unauthorized } from "../lib/errors"
+
+const BEARER_PREFIX = "Bearer "
 
 /**
  * Simple token-based auth middleware.
@@ -7,23 +10,25 @@ import type { MiddlewareHandler } from "hono"
  *   GET, POST  → public (no token required)
  *   PUT, DELETE, PATCH → require Bearer token
  *
- * BUG: The allow-list check uses `'post'` (lowercase) instead of `'POST'`.
- * HTTP methods are always uppercase per RFC 7231, so POST is never matched
- * as a public method — POST requests incorrectly require a token.
- *
- * Fix: change `'post'` to `'POST'` in the public methods array.
+ * Fails closed: if API_TOKEN is not configured, privileged methods are refused
+ * rather than falling back to a default token (ISM-1685).
  */
 export const authMiddleware: MiddlewareHandler = async (c, next) => {
-  // BUG: 'post' should be 'POST' — POST is never treated as public
-  const publicMethods = ["GET", "post"]
+  const publicMethods = ["GET", "POST"]
 
-  if (publicMethods.includes(c.req.method)) {
+  if (publicMethods.includes(c.req.method.toUpperCase())) {
     return next()
   }
 
-  const token = c.req.header("Authorization")?.replace("Bearer ", "")
-  if (!token || token !== (process.env.API_TOKEN ?? "test-token")) {
-    return c.json({ error: "Unauthorized", status: 401 }, 401)
+  const expected = process.env.API_TOKEN
+  if (!expected) {
+    return serverError(c, "Server misconfigured")
+  }
+
+  const header = c.req.header("Authorization") ?? ""
+  const token = header.startsWith(BEARER_PREFIX) ? header.slice(BEARER_PREFIX.length) : null
+  if (!token || token !== expected) {
+    return unauthorized(c)
   }
 
   return next()
diff --git a/packages/api/src/routes/users.ts b/packages/api/src/routes/users.ts
index 53e605a..8056ce3 100644
--- a/packages/api/src/routes/users.ts
+++ b/packages/api/src/routes/users.ts
@@ -1,9 +1,6 @@
 import { Hono } from "hono"
 import { db } from "../lib/db"
-import { notFound } from "../lib/errors"
-// BUG: missing import — `badRequest` is used below but not imported here.
-// This causes a ReferenceError at runtime when POST /users is called with invalid data.
-// Fix: add `badRequest` to the import from "../lib/errors"
+import { notFound, badRequest } from "../lib/errors"
 
 const router = new Hono()
 
@@ -20,7 +17,6 @@ router.get("/:id", (c) => {
 router.post("/", async (c) => {
   const body = await c.req.json().catch(() => null)
   if (!body || !body.username || !body.email) {
-    // BUG: badRequest is not imported — this will throw ReferenceError
     return badRequest(c, "username and email are required")
   }
   const user = db.users.create({ username: body.username, email: body.email })
diff --git a/packages/shared/src/types.ts b/packages/shared/src/types.ts
index a2a1377..b6f7974 100644
--- a/packages/shared/src/types.ts
+++ b/packages/shared/src/types.ts
@@ -1,14 +1,10 @@
 /**
  * Shared types used by both the API and any consumers.
- *
- * BUG: The field is named `userName` here but the API routes reference `username`
- * (lowercase n). This causes a type error in routes/users.ts and a runtime
- * mismatch when serialising responses.
  */
 
 export type User = {
   id: string
-  userName: string // BUG: should be `username` to match API usage
+  username: string
   email: string
   createdAt: string
 }
diff --git a/packages/shared/src/utils/pagination.ts b/packages/shared/src/utils/pagination.ts
index 12f8062..bc5f163 100644
--- a/packages/shared/src/utils/pagination.ts
+++ b/packages/shared/src/utils/pagination.ts
@@ -6,10 +6,19 @@ import type { PaginatedResponse } from "../types"
  * @param items  Full array of items
  * @param page   1-indexed page number
  * @param size   Number of items per page
- *
- * TODO: implement this function — it is currently a stub.
- * The test in packages/shared/test/pagination.test.ts exercises the full contract.
  */
 export function paginate<T>(items: T[], page: number, size: number): PaginatedResponse<T> {
-  throw new Error("not implemented")
+  const pageSize = Math.max(1, Math.trunc(size))
+  const currentPage = Math.max(1, Math.trunc(page))
+  const total = items.length
+  const totalPages = Math.ceil(total / pageSize)
+  const start = (currentPage - 1) * pageSize
+
+  return {
+    data: items.slice(start, start + pageSize),
+    page: currentPage,
+    pageSize,
+    total,
+    totalPages,
+  }
 }
diff --git a/tsconfig.json b/tsconfig.json
index 53de6fd..b4bf326 100644
--- a/tsconfig.json
+++ b/tsconfig.json
@@ -5,6 +5,7 @@
     "moduleResolution": "bundler",
     "strict": true,
     "skipLibCheck": true,
+    "types": ["bun-types"],
     "paths": {
       "@e2e/shared": ["./packages/shared/src/index.ts"]
     }