The Columbia Irrigation District improperly reported some of its financial information during a two-year period, according to the Washington State Auditor's Office.
The state auditor recently reported the irrigation district's internal financial controls included a weakness that affected its ability to create reliable financial statements.
The audit covers the period from January 2010 through Sept. 30, 2012.
"These deficiencies in internal controls make it reasonably possible that significant misstatements could occur and not be prevented or detected by the district in future years," the audit said.
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The irrigation district has had a tremendous turnover in office staff and management since the audit period, said Joel Teeley, general manager and board secretary.
Teeley is new, along with at least two commissioners and most of the office staff. The district's operations lead has also changed.
The irrigation district did not report about $576,000 of district office and canal system expenses as capital assets during those years, according to the audit.
The irrigation district explained that the expenses were for canal lining and office remodeling, which were repairs, the audit said.
The audit also found the capital asset balance included almost $400,000 that did not exist at the end of 2012, and land owned by the district was not reported on its financial statements.
The irrigation district countered that total net capital assets were correctly reported in the financial documents, the audit said.
District staff did not review financial reporting or journal entries performed by the a contracted certified public accountant and were missing some necessary procedures, including those that would help identify capital asset transactions, the audit said.
District officials told the state auditor they were surprised to see that the items listed were considered significant enough to rise to the level of a finding of a material weakness. The district will adopt financial reporting policies and pursue training to better assure accurate financial statements.
The auditor seemed satisfied that the irrigation district will comply fully with the requirements in the future, Teeley said.