State auditor finds issues with county
Financial methods could allow problems with grant monies
EPHRATA — An annual state audit of Grant County finances turned up irregularities in management of federal grant program requirements and financial reporting.
The Washington State Auditor's Office findings were made public Dec. 23. The two findings in the 2004 audit compare with one finding in the 2000 audit and one finding in the 2003 audit.
In 2004, the auditor said Grant County did not comply with federal regulations by passing $143,625 of federal funds from the state Department of Community, Trade and Economic Development and the U.S. Department of Housing and Urban Development's community development block grant program to the North Columbia Community Action Council.
Grant County did not comply with federal regulations or the grant program specifications, which required the grant funds be earmarked for costs of providing housing and emergency assistance. By not complying, Grant County could lose eligibility for future federal grant awards.
"The county did not assign responsibility for meeting grant requirements to someone on its staff," the audit said.
"I'm sure the commissioners will get on this," said Grant County Auditor Bill Varney.
During 2000, Grant County passed $301,309 in federal funds from the same state agency and federal grant program to the North Columbia Community Action Council. The county did not follow monitoring requirements for the federal grant, the 2001 report said, increasing the risk grant funds could be improperly used without being detected by the council or county officials.
"If it was determined the funds were used for unallowable purposes, it might jeopardize the county's eligibility for future federal grants," state officials wrote in the audit report.
In a separate finding, this year's audit report found Grant County did not have enough internal control over accounting and financial reporting.
Grant County failed to prepare adequate financial statements for 2004 in time for an audit, as required by state law.
"Because the county did not prepare annual financial statements, we did not issue an opinion on the accuracy and completeness of financial statements," state officials wrote in the audit report.
Grant County's weaknesses appeared to be the result of turnover and inexperienced staff, so they contracted with accounting firm LeMaster & Daniels for help. Working together they were not able to prepare the statements in time for review by state auditors.
Instead, Grant County will receive a "disclaimer of opinion" for 2004, which is what the county received for 2003 due to incomplete and inaccurate accounting records.
"The number of issues, discrepancies and errors in financial data and accounting records substantially increases the risk that public resources could be misappropriated, misused or lost, without timely detection," the state auditor wrote last year.
In response, the county said its action plan was to start the 2004 annual report process immediately after the end of the year and have the work completed and submitted to the state within 150 days of year end.
After the county's financial statements were late this year, the Grant County Commissioners requested Varney take the steps necessary to become compliant and meet financial reporting deadlines.
"We're going to get to work right away," Varney said today. "It would be nice if we had more staff in the accounting department."