Tumwater lacked controls to ensure accurate financial reporting — state auditor

City cites manpower issues

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Tumwater had no adequate internal controls to ensure accurate financial reporting, according to an audit report released by the state auditor on Thursday, December 29.

“Our audit found deficiencies in internal controls over financial reporting that affected the city’s ability to produce reliable financial statements,” the report stated.

The state auditor found that Tumwater misreported financial inaccuracies amounting to $6 million.

According to the auditor, the city overstated federal expenditures for highway planning and construction by $1,591,883, understated the public works balance for capital grants and contributions by $3,897,840, and misclassified $421,980 of the net pension asset for the Golf Course Fund.

The report contained a response from Tumwater city staff explaining that the discrepancies were mistakes in classification as figures were placed in the wrong column or were described incorrectly.

The city staff added that these errors were made due to staffing issues back in 2021, when they experienced a significant increase in employee turnover. Certain positions took a long time before they were filled due to the challenging state of the labor market, while staff who remained were promoted to fill other roles.

“Nearly the entire finance team was learning a new job or new responsibilities over the past two years,” stated Tumwater city staff in response to the state auditor.

The city staff assured the state auditor that they would continue to improve their review process. They stated that they hired new staff for 2022 while promoted employees have since gotten used to their new roles.

Beyond improving its internal review process, the state auditor also recommended that Tumwater allow an independent review of its financial statements.

The state auditor explained that while evaluating Tumwater’s financial statement, they reviewed the city’s financial statements for government activities, business activities, and major funds, as well as the balance fund as of December 31, 2021.

Despite the inaccuracies, the audit report found no instances of noncompliance on Tumwater’s part. The state auditor also believed that city’s financial statements and cash flow for 2021 ended in conformity with generally accepted accounting principles.

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  • C K

    yada yad yada... government, at every level, is wasteful. they should be held highly accountable both personally and professionally. Too many, in government, think citizens work for them instead of being true public servants.

    Friday, December 30, 2022 Report this

  • mathisje

    No money was missing, just misclassified. This is probably the most common audit adjustment and very understandable with new staff. Accounting is not usually suitable for work at home. I've worked with numerous staff for over 10 years. While I have issues with some City decisions, I found the workers are overwhelmingly knowledgeable, friendly and helpful. They are due our respect and appreciation. The Council and Mayor set policy and approve spending. Voters can change the City's direction at any election.

    Saturday, December 31, 2022 Report this