State seeks more control on county's cash handling
June 25, 2008 · Updated 2:23 PM
A state audit report published late last week questions the adequacy of controls in the Island County treasurer's office.
The report, which was released by the Washington state auditor Dec. 28, details a treasurer's office in which individual staff members are responsible for so many phases of the property tax billing and payment system that money could disappear without a trace.
The office handled about $100 million in tax receipts and other funds in 2001.
Calling the results of the audit "chilling," state audit manager Nestor Newman said this week his agency hopes to work with Island County Treasurer Maxine Sauter over the next few months to better segregate duties in her office and build more controls into the county's methods of receiving, depositing, and making adjustments to property tax payments.
But Sauter, who has served as the county's elected treasurer since 1985, said Wednesday her office does not need any pointers on handling taxpayers' money. She said she is in "total disagreement" with the state's two findings against her office.
Though operating with fewer employees than 17 years ago, Sauter said the office has more controls than any other in the state.
"We've never had a penny missing, ever," she said Wednesday.
The report backs Sauter on that claim, or at least shows no evidence of missing funds. However, it does chastise the treasurer for failing to make bank deposits in a timely manner, for failing to fully receipt payments, and for failing to produce supporting authorization for reductions or eliminations of tax in almost two dozen test cases.
What all this adds up to, Newman said, is a situation in which a dishonest employee could make money disappear before it gets into the books. Noting that a number of people in the treasurers office are cross trained to move cash receipts from incoming mail into bank deposits and through the recording process, the report calls for more segregation of duties.
Sauter said the segregation the report demands is neither possible nor necessary. Without funds for more personnel, she said she has trained an efficient staff that fits Island County's needs. While a larger staff would bring her office more in line with examples set by King and Pierce counties, Sauter said what works in big counties does not serve a small county well.
"Why should we spend money on something we don't need?" she said.
Both Sauter and the audits authors say the findings are serious, but for different reasons. This is the second time in two years the auditor's office has pointed to "weaknesses" in Island County's method of handling cash. Sauter said she wants to resolve the rift between her office and the state, and has accepted an offer to meet with an auditor's official specializing in cash issues. She said she wants to maintain the current workings of her office, even as the state wants her to change.
The treasurer's office, Sauter said, will not change.
"We can't work it out where it costs more money," she said.
Beyond publishing its audit report, the state has little authority over Island County's treasurer's office or Sauter. It cannot force any procedural changes, nor can it unseat an elected official.