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FOLLOWING AUDIT SULTAN TO IMPROVE ACCOUNTING CONTROLS
November 25, 2008
(SULTAN, WA) -- The State Auditor’s Office has completed its audit of the City of Sultan’s 2007 financial records. The audit resulted in Sultan receiving one “finding” for several deficiencies in internal controls over accounting and financial reporting.
The auditor’s report noted three deficiencies in internal controls over accounting and financial reporting. In one instance the city’s cash and investments held at the bank were not reconciled to the city’s accounting system.
City staff members were found to have reconciled the bank statement information to receipting logs and cleared warrants however no reconciliation was performed to confirm that total cash and investments reported in the City’s accounting system reconciled with the actual cash and investments held at the bank.
Beginning immediately the city is reconciling cash receipts, the bank statements and reported ending fund balances on a monthly basis.
In another instance the auditor found that Sultan city employees did not have sufficient knowledge and experience to correctly process information from the city’s financial software system.
Sultan overstated revenue in the Local Improvement District Fund as a result of a software system error that was not identified and revenues were thus incorrectly stated in the 2007 Financial Report. The error has been corrected in the final financial statements.
The State Auditor recommended city employees receive sufficient training in the proper processing of accounting transactions and financial reporting requirements related to the city’s financial software system and how information is transferred to the city’s financial statements.
Sultan also had an independent review performed of its financial statements by personnel from the City of Marysville. The auditor noted the independent review was ineffective due to the lack of detailed information on issues noted by the reviewer.
As a result this process did not identify errors to be corrected before the 2007 financial statements were presented for audit. In 2009 Sultan will seek to have an independent, detailed and timely review of its 2008 financial statements performed by an outside consultant.
A copy of the State Audit Report is available online at: http://www.sao.wa.gov/applications/InternetReportSearch/AuditReportSearch.aspx
The State Auditor’s Office also evaluated a federal grant for capital improvements to Sultan Basin Road. The audit report noted the city complied in all material respects with the auditing standards and there were no deficiencies in the design or operation of internal control over major federal programs.
The State Auditor’s Office will present an audit report to the City Council on Thursday, December 11, 2008 at 6:30PM in the City Council Chambers located at 319 Main Street in Sultan.