LYNNWOOD
A state auditor’s report, released Sept. 29, slapped the city’s hands for a variety of financial record keeping and procedural errors, including problems at the city run golf course.
Washington state Auditor Brian Sonntag’s audit on the city’s 2007 finances said the city “did not follow policies in place to monitor inventory and safeguard assets at the golf course.”
The result, the audit said, is that “the risk increases that records could be falsified and city assets could be misused or misappropriated.”
None of the findings were a surprise to the city, said Ted Hikel, the City Councilman who heads the council’s Audit Committee. The problems with the Lynnwood Municipal Golf Course, he said, were procedural.
“The auditor said there was no indication of a problem with anyone stealing anything from the golf course,” he said.
According to the auditor’s report, the city brought in revenues of about $1.2 million at the golf course in 2007.
Auditors found that golf course keys and combinations that unlock cash registers “are kept in unlocked drawers that are accessible by most golf course employees,” that cashiers were commingling funds received inside a safe, and that four of 15 items selected for review in the pro shop were listed in the inventory but weren’t in the pro shop.
Additionally, auditors wrote, “city policy requires inventory to be performed monthly and signed by two employees. We found only one employee had initialed each section.”
The audit also faulted the city’s contract with the beverage cart vendor.
Hikel said each of the golf course errors were “inadvertent,” adding that “they were not anything that affected the financial policies of the city or in any way put the city’s finances in to jeopardy.”
The city purchased new computer software in 2007 for the golf course to help organize inventory, Mayor Don Gough said.
“What they discovered this year was we did the right thing in terms of systems and software, what we need to do is make sure people are trained and up to date.” He said auditors also changed reporting standards too late for the city to make corrections in line with the new standards.
Hikel’s associate on the council, Jim Smith, said it’s wrong to brush off the audit’s criticisms of problems at the golf course.
“If the procedures have been put in place and they’re not doing it, why aren’t heads rolling?,” he said Oct. 6. “Where does the buck stop?”
Auditors also criticized the misappropriation of $75,000 in cash, weapons, narcotics and other items taken from the Police department’s evidence room between late 2001 and late 2005.
Former Police Commander Paul Watkins was convicted of theft in U.S. District Court in Seattle and last February was sentenced to 15 years in prison and ordered to repay money taken. The FBI had conducted an investigation of the matter after police discovered the problems in 2007.
In its response to the audit, the city said it had no jurisdiction in the matter and couldn’t therefore report the theft to auditors because an FBI investigation of an employee was underway.
“The city was really put in a Catch-22 and I fully support the city’s handling of the matter,” said Councilman Mark Smith. “The auditor had to write what they had to write. Quite frankly, I don’t see how it could have gone differently.”
In other findings, the auditor:
• Scolded the city for not ensuring contracted vendors submitted certified weekly payrolls for a project at Heritage Park in which $175,491 in labor costs were spent. The audit recommended the city establish and follow internal controls to comply with federal law.
• Said original financial statements provided by the city overstated other capital contributions for the storm drainage fund by $204,960.
• Said the city is “not maintaining detailed reports for the Municipal Court accounts receivable balances; therefore, the individual accounts that compromise this balance could not be determined or audited.”
City officials said the critique of the municipal court’s finances was unfair because the court has, in 18 years, never been asked to prepare detailed accounts receivable reports. The city told auditors it would prepare the necessary reports and save them electronically, “though we believe it is unnecessary and burdensome to prepare and retain detailed accounts receivable reports.”
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