State audit finds issues with PUD

Utility works to comply with grant standards

EPHRATA — The Grant County Public Utility District is working to resolve results of a recent audit of its 2005 financial records.

The state Auditor's Office reported the audit results to PUD commissioners Monday.

According to a press release from the PUD, the audit revealed one reported finding where the PUD did not comply with federal regulations in the handling of federal grant funds provided by the Department of Energy for the Wanapum Dam advanced turbine project.

The finding notes two areas where internal controls were lacking in the management of the federal funds.

The first area involves a contract for fish monitoring services funded partially with the federal grant funds. Contract provisions called for 10 percent of the payment to the contractor to be withheld pending receipt of the final report. The PUD billed the Department of Energy for its full share of the contract invoice prior to the actual disbursement of the final payment. The PUD paid the department $3,486.11 in interest due from the date the funds were drawn to the dates the funds were actually paid to the contractor.

The second area noted in the finding involved lack of contract language to ensure contractors and subcontractors were not suspended or debarred from participating in federally-funded grant programs.

In a separate management letter, the auditor noted three additional areas where the PUD's internal controls could be improved, including policies and procedures for payroll reporting, internal controls over information technology security and operations and internal audit procedures.

Auditor's Office Spokeswoman Mindy Chambers said the audit has not been officially issued. The office holds an exit conference after field work when performing audits and met with PUD officials to discuss what was found. Next, the PUD provides a response to the office, she explained, which then issues the official audit report. Chambers expects the PUD's response in the next few weeks.

"It's not uncommon for entities to not comply with federal grant requirements," Chambers said. "They're complicated, they're long, it's sometimes easy to miss things. So on the big deal scale, this is not a huge deal."

Chambers recommended the PUD comply with the grant requirements. When the office next audits the PUD, it examines whether the utility did what they said they're going to do, she said.

Rita Bjork, PUD public information officer, said the utility has rectified the situation. Management became aware of the issues prior to the finding, she said. The PUD is working to tighten its internal controls, she added.

"We're just working … to make sure that our contracts are clear in stating the requirements when you're dealing with federal grant funds and making sure our employees are aware of their job in how they work with those funds, and make sure that this doesn't happen again," she said.