Clark County staff had inadequate training in how to calculate certain county funds and insufficient knowledge about administering federal grants, according to state audit findings released Monday.
Mark Gassaway, Clark County’s finance director, said the findings are based on technical issues but there was no financial impact associated with either one.
According to the Washington State Auditor’s Office, county staff reported major funds based on incorrect information. Major funds are those that exceed certain thresholds of revenues, assets, expenses or liabilities. When auditors reviewed the county’s major fund calculation they found one major fund was left out of the financial statements.
“The requirement affecting the county’s financial statement presentation is reflected in the published 2015 statements,” Gassaway said. “The good news is that prior to the presentation change, in total the financial statements were accurate.”
According to Gassaway, the fund in question has never previously risen to that level and county staff didn’t re-evaluate it after preliminary calculations.
“There’s no financial impact. For our rules we should have showed it separately, but we didn’t revisit it,” he said. “It’s just something we didn’t expect.”
The report also said auditors reviewing the county’s major fund calculation found “funds included that should not have been, one missing fund, negative revenue reported and other amounts that did not agree to the financial statements provided for audit.”
Gassaway said auditors didn’t initially receive the most current work that had been done in the major fund calculation model.
The state Auditor’s Office also found that last year the county charged more than $380,000 in indirect costs without adequate supporting documentation. Auditors also found charges totaling more than $206,000 for employee vacation, sick leave and holiday benefits to the Highway Planning and Construction grant without adequate controls to ensure the charges were made without using a trust account.
According to the report, staff within the Clark County Public Works Department “had insufficient knowledge of federal requirements for allowable costs to ensure compliance; and monitoring by management was not adequate to detect an issue.”
Although the county wasn’t in compliance with federal requirements for allocation plans or how it charged for some employee benefits, the state auditors found the charges to the federal program were reasonable. However, the documentation standards were not to the level auditors expected.
Gassaway said the county has used the same grant reporting methods for nearly 20 years without realizing or being told by auditors that a footnote from 1998 required something different.
“(The) requirement concerning grant expenses had not been an issue for the past 18 years and under new guidance that began in 2015 will not be a requirement once the grant is renewed,” he said.
The county’s written responses to the state auditor’s findings are included in the report. In its statement, the county agreed its process didn’t meet all federal requirements. The county will better train staff on allowable costs and allocation plans on federal grants and will develop a monitoring process.
“We appreciate the state auditor’s office pointing out the two technical accounting requirements,” Gassaway said.
State auditors will review the corrective action during their next regular audit of the county.
