EDMONDS — The city’s financial reporting came under state auditors’ fire during an audit of 2010. Specifically cited was the city not having “adequate oversight of financial operations to safeguard public resources.”
The audit exit conference was completed April 4 by the state auditor’s office.
“No money was misappropriated, no funds were overspent,” said Shawn Hunstock, Edmonds’ finance director. “The errors in financial reporting were not outside of legal compliance.”
The most severe charge, a lapse in internal controls, was created when five finance department staffers were laid off due to budget cuts, Hunstock said. That left multitasking that could blur duties that should be segregated and caused the oversight of cash receipts and payroll functions to fall short of standards.
When that deficiency was brought to the council’s attention, two of the positions were reinstated in 2011.
Hunstock, who came to Edmonds from Tukwila in September 2011, is confident that the 2010 finding will not be an issue when addressed in the 2011 audit. He also feels that the usefulness and timeliness of the city’s financial reporting will be bolstered with the additional staff.
“New audit teams find new things,” Hunstock said. “New accounting standards are used every year.
The auditors spotted other city policies that are either needed or are in conflict and need to be fixed.
A policy addressing change orders was deemed necessary. The council added such a policy Jan. 23.
Time sheet policies also were tapped by the auditors, who found a lack of consistency in completing and approving them.
Some personnel filled out time sheets only when it deviated from a typical work week because of vacation, holidays or sick time. Others accurately completed time sheets fully. The city is upgrading to an online time sheet system that needs to be completed and approved before a paycheck is generated.
There also were auditor questions about leave taken before it was earned. This was particularly noted in the case of new hires.
Hunstock said that those details should be included in an employee’s offer letter and approved by council. That new policy is now in place.
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