Prosser gets rare audit revision

Geoff Folsom, Tri-City HeraldDecember 14, 2013 

A minor reporting error caused the state to give the city of Prosser's finances a second look recently.

The Washington State Auditor's Office had to perform a rare revision for an audit, reviewing Prosser's finances for the period between Jan. 1, 2010, and Dec. 31, 2011, because the city put information about federal grants it was getting in the wrong place, Prosser finance director Regina Mauras said.

Staff put the information in the footnotes of the city's financial statements that the state reviewed, instead of in the federal awards schedule, which is required, Mauras said.

The mistake happened because the city expected to receive a water and waste disposal grant in 2011 from the U.S. Department of Agriculture, but didn't yet have the money, Mauras said. So it got an interim loan from a bank to cover the project until the federal money came through.

But staff didn't realize that it was required to report the bank loan in the federal schedule of awards.

The error had no impact on the rest of the audit, Mauras said.

"The financial statement did not change, it was just how it was disclosed," Mauras told the Herald.

The error was discovered during an audit of Prosser's 2012 financial statements and federal grants, according to the state auditor's revised report, which was released Monday. It led the city's Schedule of Expenditures of Federal Awards to be understated by more than $2.5 million. The corrected schedule showed another federal program that also had to be audited.

"These errors affected the number of programs to be audited, delayed the audit beyond the audit report submission deadline and caused unnecessary audit costs," the audit report stated.

The error caused the state auditor's office, which charges the city $83.60 per hour, to work an additional 10 hours on Prosser's audit, adding $836 to its bill, auditor's office spokesman Thomas Shapley said. In all, the auditor's office spent 60 hours on Prosser's audit.

The report said city staff members were not aware of the USDA guideline saying the loans were federal spending, and that they were unclear about how to handle the bank loan.

"From what I can see, it's no big deal," Shapley told the Herald. "It's pretty much a paperwork thing."

The auditor's office performs about 2,000 audits a year. Shapley said having to revise an audit is "not common, but not unprecedented."

The city responded to the auditor's finding by saying it is committed to ensuring its reporting requirements are accurately represented in the future. It added that it will train staff to comply with state and federal programs and that the city had obtained a number of publications to help it.

"We've been doing all that," Mauras said.

-- Geoff Folsom: 509-582-1543; gfolsom@tricityherald.com; Twitter: @GeoffFolsom

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