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State Auditor issues Yelm 3rd “historic” deficiency finding –
All 3 reports from Harding’s lack of management skills,
Interim Mayor Foster to enact new procedures

Seal of the Washington State Auditor’s Office

City of Yelm receives scathing audit report from State Auditor
* Conditions were all under former Mayor Harding’s and previous councils’ oversight
* Previous councils complicit by not asking questions, “rubber-stamping” Harding’s actions
* Revolving door of former Yelm Finance Directors indicative of issues, yet little was asked
* Harding was Thurston County Deputy Auditor for a year – yet underscores his lack of skills
* Is this the ending epithet to Harding’s “reign of error” which Interim Mayor Foster inherited?
* New Councilors Carmody, Stillwell, DePinto asked financial/budget questions in early 2016.

Onward to the Future
* Interim Mayor and City Administrator make their “high priority to address the historic issues”
* I recommend an independent accountant needs to be on city’s Finance Committee
* I’ll repeat my previous call – councilors should demand an independent budget audit, now!
* Interim Mayor Foster should publicly address this report with his constituents immediately

The Washington State Auditor released their every-two-year audit for the City of Yelm on February 16, 2017. The report lists several areas of “deficiency” which had not been corrected from the two previous deficiency audits, covered here when they were released: the 2014 audit on November 10, 2014, and the 2012 audit on February 19, 2013.

Excerpts from The City of Yelm Audit released February 16, 2017:
Description of Condition
During our audit we identified the following deficiencies in internal controls over financial reporting that, when taken together, represent a material weakness:
* The City does not have formal policies in place that establish effective controls over financial statement preparation.
* The City does not have procedures in place, including supervision and oversight, to ensure information entered into the general ledger is accurate.
* The City lacks an effective review process to ensure amounts reported on the financial statements agree to the supporting general ledger.
* The City did not implement an independent review of journal entries to ensure they were allowable, accurate, and supported.
* City staff responsible for reporting amounts in the financial statements and compiling the footnotes did not ensure they were prepared in accordance with the Budget, Accounting and Reporting Systems (BARS) Manual.

Cause of Condition
The City has not made it a priority to provide adequate training and oversight or develop the necessary resources or processes, to prepare accurate accounting records and financial statements.

We recommend:
* The City create formal written policies that establish effective controls over the preparation of the financial statements.
* The City implement procedures, to ensure information entered into the general ledger is accurate.
* The City implement an effective review process to ensure amounts reported on the financial statements agree to supporting accounting
* A secondary independent review of journal entries to ensure they are allowable, accurate, and supported.
* Individuals responsible for preparing and reviewing the financial statements, notes, and schedules have sufficient technical training and effectively use the BARS Manual when preparing the City’s annual financial report.

City’s Response
The City of Yelm has made it a high priority to address the historic issues identified by the State Auditor’s Office.

Auditor’s Remarks
We appreciate the City’s response and wish to thank the City’s staff and management for their cooperation and assistance during our audit.
We also look forward to working with the new Mayor, City Administrator, and Finance Director to address the issues identified in this audit.
We look forward to reviewing the corrective action during the next audit.

Click here to read Yelm’s “Accountability Audit Report.”
Click here to read Yelm’s “Financial Statements Audit Report.”

Posted by Steve on February 21, 2017 at 8:25 am | Permalink

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