EVERETT — The Snohomish Health District needs to tighten bookkeeping, according to a recent state audit.
The report by the Office of the Washington State Auditor found a “material weakness” in the agency’s 2020 financial reporting and recommended more staff training and better internal controls. The findings did not constitute non-compliance with federal rules, however.
As COVID-19 relief money flowed into the county last year, $5.6 million was not initially accounted for, according to the audit. The district “lacked adequate internal controls for ensuring accurate financial reporting,” and review processes were “insufficient for detecting and correcting errors.”
“Inaccurate reporting of federal expenditures can mean more time is needed for an audit, which also increases its cost,” the report reads. “An unexpected audit delay can mean a missed reporting deadline, which can jeopardize future federal funding.”
In a formal response, the health district said the mistake was a paperwork error. It acknowledged “a need for enhanced training” for staff.
The $5.6 million was “properly accounted for once identified,” and the financial statements were corrected, the health district wrote, adding that measures are now in place to avoid making the same mistake.
The audit evaluated a year when millions of dollars in pandemic relief bulked up the health district’s budget. The district dealt with about $12 million more in revenue than expected. And going forward, Washington’s new investments in public health — prompted by the pandemic — will mean local officials will keep track of bigger budgets than before.
A letter from the state auditor’s office this year noted that the Snohomish Health District took steps to address issues identified in a 2018 audit, too. But problems around maintaining and tracking capital assets still need to be resolved.
Without formal inventory procedures, “district staff relies on its memory and general understanding of assets to confirm they exist at year-end,” the letter reads.
Those issues, too, were the result of staff not receiving necessary training, according to the auditor’s office.
Between the 2018 and 2020 evaluations, the health district abruptly lost its two top leaders.
The issues that rolled over from 2018, said district Finance Manager Sara Centanni, will be addressed by policies and procedures that “have not yet been finalized and approved, but are anticipated to be later this year and in early 2022.”
Like the recent report, that 2018 audit also said the district wasn’t out of compliance.