The Washington State Auditor’s Office issued an audit finding against Island County for the second year in a row.
Auditors found “significant deficiencies in internal controls over financial reporting that resulted in errors in the county’s financial statements,” the audit report states. The report covers the year 2016.
There was no allegation that any money was lost or misappropriated.
Because of the errors, “cash and equivalents” were overstated by $1.69 million; investments in capital assets were overstated by $240,000; land and infrastructure were overstated by hundreds of thousands of dollars; and fourth quarter premiums weren’t reported.
Island County Auditor Sheilah Crider’s office is responsible for a wide range of financial reporting and financial oversight for the entire county.
She released a statement that says turnover in key positions in her office “contributed to the loss of institutional knowledge that directly impacted the quality of the financial statement.”
“Corrective action has been taken to ensure these issues will not arise in the future,” according to the statement.
Specifically, new staff members were hired, duties and responsibilities among the accounting staff was reorganized, and prior practices were revised, Crider wrote.
The audit report also states that the isolation of county departments from one another contributes to the problems. Island County Budget Director Elaine Marlow agrees with this assessment.
“One of the problems I think they correctly identified,” she said, “is the (county) auditor’s outreach and communication to departments need to be strengthened.”
Marlow said the errors had no real effect on the operation of the county. The problem, essentially, was that financial information was reported in the wrong category, she said.
The audit report also outlines a series of recommendations to different departments.
It states, for example, that auditors found employee reimbursement forms that were missing receipts or signatures from department heads. In some cases, employees signed their own reimbursement forms.
Marlow explained that it was the county auditor’s office’s responsibility to review the forms as part of the voucher process.
The audit report also recommends that the Island County Sheriff’s Office maintain an inventory log of stored evidence. Sheriff Mark Brown, however, said all evidence is logged into the Spillman computer system and he questions the need for a written log on top of that.
Last year the state auditor issued a finding, also for “significant deficiencies” in internal controls over financial reporting. Auditors found that county financial staff didn’t have adequate knowledge to properly implement a new accounting rule from the Government Accounting Standards Board for reporting on pensions. As a result, pension assets were overstated by $14.7 million.
