Better training recommended for Moses Lake accounting staff in audit finding

MOSES LAKE — Auditors with the Washington Auditor’s Office recommended that Moses Lake city officials provide more training for staff after finding some money was allocated to the wrong funds in a review of the city’s financial statements for 2021.  

The report noting the errors, which is called a finding, was released Monday.  

“Our audit found weaknesses in internal controls over accounting and financial reporting that hindered the city’s ability to produce accurate financial statements,” the report said.  

Moses Lake Mayor Dustin Swartz said the report didn’t find any money missing, but did determine that some funds had been allocated to the wrong account. That caused mistakes in other funds.  

The report said the city corrected most of those errors.  

City employees overstated revenues and expenses in the city’s general fund by about $1.1 million, the report said. That happened because money paid to the general fund for administrative purposes by other city departments was reported incorrectly, it said. 

About $3.1 million was placed in the wrong account. The money actually was part of the city’s pension assets but was incorrectly reported in the city’s “unrestricted net position.” 

A municipality’s money that is not dedicated to a specific purpose is called unrestricted net position.  

About $19.4 million was allocated to the city’s capital assets and should’ve been part of the unrestricted net position, the audit report said. Another $7.7 million was misallocated to non-major enterprises fund, and $3.4 million to its business-type activities fund. In both cases, the money should’ve been allocated to the city’s unrestricted net position. 

The city also didn’t properly classify park improvement funds or money it received through the American Rescue Plan Act, the report said.  

Swartz said the report covered the city’s financial reports from three years ago.  

“The audit process itself is a few years behind,” he said.  

The audit report said there was turnover among the city’s accounting staff. 

“As a result, staff responsible for financial reporting lacked the technical training and experience necessary to apply the correct accounting treatment specific to certain transactions and balances,” the report said.  

In their response, city officials said a new financial system is being implemented; the city has had additional turnover in its accounting staff too. New employees will be given the appropriate training as the courses become available, the report said.