Auditor finds county lacks in monitoring contract payments

Commissioners blame typographical error

EPHRATA — A recent state auditor's report highlighted two failures by Grant County to adequately monitor contract payments, leaving the county at risk of misappropriating or gifting public funds.

In addition to not following state law and its own policies for contracts, the report found Grant County commissioners continued paying vouchers from the public works director which were not certified by the county auditor.

The findings stem from the Washington State Auditor's independent accountability audit of Grant County for 2004, which was published Jan. 6.

In one instance of failed contract monitoring, Grant County entered a $74,360 professional services agreement with an administrator of the Columbia Basin Ground Water Management Area.

The contract ran January 2004 to December 2005, paid the administrator $5,720 per month plus expenses and eventually exceeded the contract maximum of $74,360 by $40,040, the report stated.

Contract amendments were not done to change the terms.

Because Grant County "did not establish adequate monitoring of the contract with the administrator, and payments made on the contract, payments exceeded contract terms," according to the report.

In response, county commissioners said the issue stemmed from a typographical error, not lack of control over contract monitoring.

"The existing two-year contract is a continuation of earlier contracts which had enumerated maximum annual amounts; unfortunately, the current contract omitted the word 'annually,'" commissioners responded in the auditor's report. "The Ground Water Management Area Board had recommended the two-year document, and the board of county commissioners adopted the new contract with the typographical error. The contracts will be amended to correct the error."

In a second instance, the Grant County commissioners committed $140,000 per year for 20 years to Big Bend Community College Foundation. The foundation supports the college and planned to construct a building on campus.

In 2002, the county commissioners approved annual payments to the foundation for construction and included three additional payments, back to 1999.

The foundation did not construct the building, the county went on making payments and no contract between the two was established.

"It's hard to monitor a contract when there is no contract," said Mindy Chambers, state auditor's office spokesperson.

"The county's procedures were not sufficient to ensure adequate contract monitoring, or to ensure that contracts were in place," the report stated. "Failure to monitor contract payments can lead to gifts of public funds."

Auditors felt Grant County should follow policies and procedures to comply with state law, regulations and contractual specifications.

The second finding raised in the accountability audit concerned adherence to state laws and regulations regarding disbursements.

State law requires auditing and certification of vouchers by the county auditor prior to commission approval and payment by the county treasurer.

The public works department has prepared vendor payment vouchers for commission approval and issued warrants following approval. State auditors noted Grant County commissioners continue to allow the public works director to audit and certify payment vouchers while failing to receive certification from the county auditor.

"The various failures in the approval process resulted in the county paying for expenditures that were not properly approved and authorized," auditors wrote. "Without proper controls over payments, the county cannot be assured expenditures are true obligations of the county. Further, the county spent federal funds without following approval procedures required by state law."

Auditors recommended Grant County establish policies and procedures so claims are certified and approved in compliance with state law. The county commissioners must only approve payment vouchers certified by the county auditor, the report stated.

"The board of county commissioners will request that the Grant County auditor review and sign the certification for disbursements from the public works department; the county auditor has agreed to do so," the board wrote in the report.