The Washington State Auditor’s Office has determined there were significant deficiencies and material weaknesses by the City of Washougal, in 2009.
An audit released today refers to the state Route 14 pedestrian tunnel project. The finding mentioned the city’s internal controls were not adequate to ensure compliance with cost principles and the Davis-Bacon Act.
The city spent $1.08 million in Highway Planning and Construction federal grant funds in 2009. The project was administered by the Washington State Department of Transportation and funded by the American Recovery and Reinvestment Act.
The audit mentions the city did not have adequate internal controls in place to ensure that certified payrolls were collected and reviewed by the project administrator within seven days of the payroll payment date.
“We found that 24 percent of certified payrolls for the primary contractor and the 10 subcontractors who worked on this project during 2009 were not collected as of the conclusion of the audit in September 2010.”
Another finding said the city needs to improve its internal controls over its accounting and financial statement preparation. The auditor’s office mentions city employees do not have adequate experience with the reporting requirements to accurately prepare required schedules.
“Employees were unaware of the presentation requirements related to the American Recovery and Reinvestment Act amounts in the schedule of expenditures of federal awards,” the audit stated.
The city’s response mentions that ARRA funding is new, and the city was tracking and presenting the ARRA funds collectively with other federal funds received for the tunnel project.
“Neither of these findings indicates that there is any money missing or that anything improper was done by design,” said Mayor Sean Guard. “The staff that are currently at the city have done a phenomenal job of taking over dozens of higher-level management tasks during a time of immense upheaval at the city. They have done admirably given the circumstances that they were asked to address.”
The audit mentions the city experienced turnover in the finance director position in February 2009.
“The city did not provide the necessary resources, including adequate training, to ensure proper reporting of the financial statements,” the report stated.
Guard notated that former Finance Director Becky Hasart left the city in April 2009. Former Mayor Stacee Sellers appointed Jeffrey Bivens to that position, and his tenure also ended in 2009.
Jennifer Forsberg, a former fraud investigative manager for the auditor’s office, was hired in July this year as the city’s finance director.
The State Auditor’s Office issued a report in October 2009 that mentioned Washougal was not able to account for approximately $100,000 in revenue generated from city-sponsored festivals — including Washougalfest in 2008 and Riverfest in 2009.
Last year, the city spent more than $40,000 on Riverfest and $36,000 for the farmers market. After the auditor’s office was unable to determine what happened to some of the revenue from the festivals, Guard asked the Clark County Sheriff’s Office to conduct a criminal investigation and determine if any laws were broken or if city funds were misappropriated.
Sheriff’s Det. Tom Mitchum has declined to answer any questions, saying he never comments on investigations.
Guard’s request to open a criminal investigation followed the results of the special audit undertaken by the State Auditors Office.