GOLD BAR — State auditors found problems with how Gold Bar’s finances were reported in 2015.
An audit looking at financial records found the city’s control over accounting and reporting wasn’t strong enough to guarantee complete and accurate statements.
Auditors wrote that employees responsible for financial statements lacked training on how to prepare them to meet state standards, and that the city didn’t ensure updated standards were in place. That was in part because of staff turnover. In an email, clerk-treasurer Lisa Stowe said there was turnover in her position for several years, but it has been filled since 2016.
Some calculations in financial records lacked supporting documents, and there wasn’t enough review for accounting entries, among other issues.
Auditors addressed some problems, including the failure to properly report $154,711 in net pension liability. That has been fixed. Records overstated at least one ending balance and omitted a joint venture between the city and another agency. The mayor in 2015 reviewed two of 14 accounting journal entries.
In a written response to auditors, city officials said that changes in standards were announced after the 2015 financial statements were done. It was not clear they applied retroactively.
The auditor’s concerns centered on a specific document that reports general obligation debt and compensated absences, Stowe said in an email. A number of cities had similar problems because they did not retroactively apply new standards. The city has since resolved the issue.
Gold Bar officials promised to have the clerk-treasurer regularly check the state auditor’s website for changes and pointed out that email notifications from the state agency have been unreliable. They also plan to provide employee training, regularly review standards and require secondary reviews of journal entries.
Gold Bar, a city of about 2,100 people, had expenses of more than $513,000 from its general fund in 2015, according to the audit. The general fund typically pays for day-to-day operations.
Along with the audit, the city received a letter with suggestions on money management.
Auditors have expressed concern over the city’s financial condition during the past five audits, they wrote. Leaders have taken steps to strengthen the budget, but policies don’t specify how they’ll monitor and improve finances, the letter said.
Year-end expenses have been less than revenues five out of the past six years, meaning the city didn’t overspend its general fund. However, Gold Bar has been running at a deficit until the last months of each fiscal year, auditors found. The final disbursement of property taxes from Snohomish County made up the difference. That leaves the budget at the mercy of housing market changes that could affect taxes, auditors said. They urged the city to set up financial benchmarks, then adjust operations to meet them.
Auditors also noted in the letter that the city has moved money between funds without enough documentation.
The letter also suggested the city increase control over access to city debit cards, fuel cards and cash. That includes assigning fuel cards to specific vehicles so reasonable costs can be calculated based on mileage.
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