Soap Lake finances criticized by auditors

City looking to repair problems from most recent SAO report

SOAP LAKE — The Washington State Auditor's Office has found fault with the way the city of Soap Lake has handled its finances going back to 2002.

But the city's mayor is in complete agreement with the findings of the state agency, and said the city's current administration is working to fix the mistakes of the past.

The SAO released three separate reports on the city, and cited the city in two of those reports for lacking internal controls for both federal grants and loan requirements as well as its own accounting and financial reporting. Auditors released two reports on the city's finances, and SAO spokesperson Mindy Chambers said a financial statements and federal single audit was performed retroactively for the years 2002 and 2003 was done because the city did not make her office aware of federal money Soap Lake had received. A financial statements audit for the year 2004 yielded similar findings.

The city of Soap Lake agreed with the findings in a response to the audit, and Mayor Wayne Hovde said the city has worked to update its bookkeeping system and made other improvements since auditors came in February.

"They are not something that we fought, that we did not agree with," Hovde said of the findings, "We wanted to get it taken care of and fixed."

One of the findings the city was cited for was not notifying state auditors of more than $1.5 million in federal money the city had received, as required by state law. That money included approximately $830,000 from the Department of Ecology and a $750,000 community development block grant for the construction of a wastewater treatment facility.

For not establishing internal controls to comply with those requirements, auditors said Soap Lake could not ensure compliance with grant requirements. Failure to have sufficient controls over its own accounting and financial reporting have resulted in an inability to determine whether individual transactions were accurately recorded and not misappropriated. Auditors also cited the city for not filings its 2004 annual report on time as required by state law.

Chambers said some of the problems the city faced in the current audit have also been cited in the past, but she said current city management has been working to address the concerns raised in this most recent report. Reporting of loan and grant money is a task Chambers and the city have committed to in the future.

"It does happen from time to time," Chambers said on non-reporting, "It's not one of the most common findings that we have certainly, but it's not unique."

For this year the reporting of grant money to the office is something Hovde said the city has already taken care of. He said the city will continue to make strides forward to fix past problems, with a little help from SAO auditors.

"The auditors were more than helpful with our needs and questions and concerts," Hovde said, "They were a real benefit to the situation."