Complete auditor's documents included at bottom of story
The city of Grand Coulee received a scathing audit finding from the State Auditor’s Office for the calendar years 2009 and 2010.
The SAO reported in audit findings released Monday that the city had overspent its budget by more than $400,000 in 2009, and that it had not billed for some $300,000 in ambulance services, and that then-mayor Tammara Byers had signed blank checks.
“The city does not have adequate controls over financial operations, placing public resources at risk of loss or misappropriation,” the SAO findings state.
During the audit period, Byers was mayor and Valinda Knighten, city clerk/treasurer.
Some of the highlights of the findings:
• The city did not bill for $300,000 in ambulance services from September, 2009, through November, 2011. The city stated it may not be able to bill for that revenue because insurers will not pay bills that are more than one year old. The potential loss is $168,000 for billings exceeding the one-year limitation.
• The city did not perform cash reconciliations in 2011.
• In 2009, the financial statements reported $160,000 more in revenues and expenditures than the audit found should have been reported.
• The clerk/treasurer did not prepare expenditure and revenue statements as required by state law.
• City staff made adjustments of $3,162 and $22,477, in 2009 and 2010, respectively, to reduce utility customer accounts without approval or oversight.
• The city has not remitted Municipal Court revenues to itself, the county and the state since July, 2009, as required by law. The city had $69,250 in the Municipal Court checking account waiting to be remitted during the audit.
• The mayor signed blank checks for use by city staff.
• The mayor did not seek council approval to change compensation for an employee. The mayor had supported the change in compensation through a memorandum of understanding, but under state law compensation can only be fixed by the council.
• The city operated on a budget of $4,261,360 and $3,548,666 for 2009 and 2010 respectively. The city exceeded the council-approved budget by $401,811 in 2009 and $30,745 in 2010, and did not adopt budget amendments until the following fiscal year.
• The clerk/treasurer and mayor did not provide timely financial statements to the Regional Board of Mayors on the transfer station as required by the agreement.
• The city did not monitor cash receipts or fuel use at the transfer station to prevent or detect potential loss in a timely manner.
• The council may not have developed adequate monitoring controls over city staff to ensure duties are accomplished, such as performing bank reconciliations, billing for ambulance services and remitting court revenues.
• The mayor did not communicate necessary information, such as the fact that staff was not billing for ambulance services, to the council to allow it to take necessary steps to remedy the situation.
• During the audit, city staff acknowledged they were not performing some of their financial duties, but said they did not have time to do so.
The recommendation to the city from the State Auditor’s Office is to 1) establish controls over key financial operations to ensure staff are completing tasks ad following internal control processes; 2) ensure staff prepare and retain documents to support the validity of transactions; 3) ensure it receives timely accurate financial reports in order to monitor the city’s financial activities and position.
The SAO noted that the city did not respond to the audit, even though it had opportunity to do so.
The complete State Auditor's reports follow: