State audit finds compliance at Wahkiakum PUD

The Washington State Auditors Office released its final audit of the Wahkiakum County Public Utilities District’s financial statement for 2008, last week.

The November 9 report looked at the areas of highest risk for noncompliance and misappropriation or misuses of PUD assets. The audit included billing, adjustments, cash receipts, assets, disbursement, payroll expenditures and benefits.

Auditors also looked at the PUD’s electrical distribution system and the management of Western Wahkiakum Water and the Puget Island Water system.

The state audit determined the PUD’s internal controls were adequate to safeguard the public’s assets. The district also complied with state laws and regulations pertaining to the areas of the PUD’s budget that were examined.

The State Auditors looked more closely at the PUD’s budgetary controls during the 2009 audit because sections of the PUD’s 2007 and 2008 had been in noncompliance.

In 2008, accountants from the State Auditors Office said their audit “had identified significant deficiencies in the Wahkiakum PUD’s internal controls” and taken in total the deficiencies represented a material weakness in the PUD’s accounting practices.

The State Auditors’ office defines control deficiency as existing when the management design or operation of the budgeting/spending process does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements in a financial report on a timely basis.

The 2008 auditors also found no independent review had been performed by the PUD management to detect material errors in its accounting practices, prior to the PUD submitting its final financial statements for audit.

In that audit, state auditors also found that the PUD staff responsible for preparing the financial statements did not have adequate experience with the financial requirements detailed in the state’s budgeting, accounting and reporting manuals, used in preparing the PUD’s financial statements for the state audit.

The new audit said that “As part of obtaining reasonable assurance about whether the District’s financial statements are free of material misstatement, we performed tests of the District’s compliance with certain provisions of laws, regulations, contracts and grant agreements. Also any noncompliance which could have a direct and material effect on the determination of financial statement amounts.”

The 2009 audit found that the PUD’s weakness identified in the 2007-2008 audits, had been corrected.

The 2009 state audit also said the PUD staff responsible for preparing the financial statements had received additional training in governmental accounting standards and the internal controls over financial reporting.

In addition the audit determined that the PUD management had carried out an independent review prior to submitting the district’s 2009 final financial statements for audit. The PUD has a yearly operating budget of $3,743,049.