Grant County's financial reports tardy for third year in a row

EPHRATA — For the third consecutive year, Grant County officials failed to meet the deadline for providing final annual financial reports to the Washington State Auditor's Office.

Late financial reports could affect the county's ability to borrow money or its eligibility for grants.

Washington law requires local governments to prepare and submit yearly financial reports to the state auditor's office within 150 days of Dec. 31. The state auditor's office decides the format the financial reports must be submitted in.

County officials failed to prepare financial reports, for 2003 and 2004, by the deadline. Now, financial reports for 2005 were not submitted by deadline, according to a report published by the state auditor's office last week.

Grant County Commission Chairman LeRoy Allison claims the deadline for 2003 was missed because the format used by the county for the financial reports was incorrect. The new Governmental Accounting Standards Board's (GASB) format was required, but the county unknowingly treated them as recommendations, Allison said.

Financial reports for 2004 were completed in time for review by the state auditor's office, but were again not in the correct format.

The county requested an extension to complete the financial reports for 2005, but the request was sent to the wrong federal agency, Allison said. Plus the county was still trying to "iron out" a system to meet the standards required by the state auditor's office.

An accounting firm was hired by the county to assist in preparing the 2005 financial reports.

Grant County Auditor Bill Varney said the financial reports for 2005 were due in late May 2006, but were turned in six months late.

Financial reports for 2006 are a little late, Varney said. He anticipates they'll be completed in time for the state auditor's office to review them.

The failure to meet the deadline during the last three years prevents the state auditor's office from issuing an opinion on the accuracy and completeness.

The state auditor's office, the June 8 report states, issued recommendations on how to establish internal controls for accounting records and preparation of financial reports. But the county did not establish a system, the report states.

"These weaknesses appear to be the result of inexperienced staff and the county's failure to establish adequate internal controls over computer systems and data, accounting records and financial reporting," the report states.

The county, in a written response, said the Public Works Department has its own accounting-system software, separate from the rest of the county.

"That's one of our big problems is taking the two systems and trying to merge them together," Varney said in an interview Thursday.

"Both accounting software packages are over 25 years old and no longer have proper support to update the software to meet the ongoing, increasing state and federal reporting requirements," the county's response states. "It's a very time-consuming process to combine the information from the two systems on spreadsheets to produce the financial reporting statements for the new GASB requirements."

In November, the county commissioners added a new position in Varney's office, in an effort to meet the deadlines.

The county plans to have a new accounting system in place by January 2008.