Audit faults Lynnwood for lax control of cash

LYNNWOOD — The city violated its own rules and state law last year with lax record keeping of money and inventory at its city-run golf course, a state agency said in a report.

The agency didn’t say whether any money is missing from the Lynnwood Municipal Golf Course, which collected about $1.2 million last year.

The city admits that golf course bookkeeping rules and security measures were not followed and said the problems have been corrected. The golf course is at 20200 68th Ave. W., next to Edmonds Community College.

“The employee understands how important it is to maintain internal controls,” city finance director John Moir said.

“He has seen the light.”

The city also violated state law last year by failing to notify the state auditor of an investigation that resulted in the conviction of a deputy police chief for stealing at least $75,000 in cash and items from the police evidence room.

The findings were issued Monday in a report by the Washington State Auditor’s Office.

The auditor’s findings carry no legal penalty, but in general, violations deprive the public of important information and could be indicative of further problems, officials with the department have said.

The list of eight violations at the golf course included:

Keys and combinations that unlock cash registers were kept in unlocked drawers that were accessible by most golf course employees.

Funds received during the course of the day were commingled in the safe, and funds that exceeded the starting balance were kept in a cardboard box. “Should a loss occur, responsibility could not be determined,” the report said.

City policy required inventory to be performed monthly and signed by two employees. The auditor found that only one employee had initialed each section.

The city contracted with a vendor to provide beverage cart services at the golf course, but the dealings between the city and the vendor didn’t live up to the contract, the auditor found. In other cases, the contract failed to clearly explain the obligations between the city and the vendor.

Moir added that the golf course pro shop is reducing its inventory by about half, to reduce the burden on employees of counting all the items, he said.

“We were probably going to do that anyway because we have stuff that competes with lower cost stuff elsewhere,” he said.

Regarding the deputy police chief situation, Moir — who was not the finance director at the time — said the city was told by the FBI not to even reveal that an investigation was under way.

Earlier this year, former Lynnwood deputy police chief Paul Watkins was sentenced to 15 months in federal prison for stealing $75,000 in cash, weapons, drugs and other items from the police evidence room between 2001 and 2005.

State law requires that the auditor’s office be informed of an investigation involving malfeasance of public funds, said Mindy Chambers, spokeswoman for the agency.

While she said she understands that this puts a city in a difficult position, it could ask the FBI to inform the state of the case, she said. This has been done other times, Chambers said.

“There are ways you could work through this,” she said.

But the FBI said it’s illegal under federal law to reveal that an investigation is taking place involving corruption at a public agency, said Steven Dean, a special agent in the Seattle office.

Dean was in charge of the investigation of Watkins, he said.

As far as the FBI is concerned, federal law trumps state law, Dean said.

“We don’t confirm, deny or divulge, positive or negative, any information at all,” Dean said. “If I had this to do again, I still wouldn’t tell anybody.”

The city of Lynnwood reported their suspicions about Watkins to the FBI, Dean said.

“That’s a courageous thing to do,” he said.

Still, Chambers said, “if the call’s not made, the law is violated and we have to report it.”

Reporter Bill Sheets: 425-339-3439 or

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