Camas audit: State auditor identifies problems

For the third year in a row, the Washington State Auditor’s office has dinged the city of Camas for having deficiencies in its internal controls over financial reporting.

The state’s most recent audit — which spanned Jan. 1 to Dec. 31, 2024 — identified problems in the city of Camas’ financial oversight, which hindered its ability to produce accurate accounting records.

However, the city said staff were posed with a unique challenge in 2024 that led to the deficiencies.

Previously, the state auditor found the city to have weak internal controls, which led to errors in financial reporting for 2022 and 2023.

City staff said the issues stemmed from outdated software and that the city was slowly rolling out a new system.

In the 2024 audit, released Monday, the state determined the missteps were a result of the city implementing the new software for utilities, permitting and capital assets during its financial accounting period. The overlap led to the limited time for staff to thoroughly review records, according to the audit report.

“As a result, city employees were unable to dedicate sufficient time and resources to implementing prior audit recommendations,” the report states.

According to the 2024 audit, the city did not have a reliable process to ensure its capital assets were reported correctly.

The audit found three issues:

• The city did not adequately evaluate and adjust the lifespan of its capital assets. Capital assets can include buildings, infrastructure or land.
• An independent review of the city’s records of financial transactions wasn’t detailed enough to make sure the records were accurate and complete.
• The city’s process for reviewing financial statements was insufficient in ensuring the reports were accurate or complied with Generally Accepted Accounting Principles, standard guidelines for accurate financial accounting and reporting.

“When taken together, they represent a significant deficiency,” the audit report said.

The report highlighted the effects of the errors:

• Because the city did not regularly analyze the lifespan of its capital assets, $47 million in assets were reported as fully depreciated when those assets were still useful.
• The city underreported the value of donated land by an unknown amount. The city recorded the actual costs it paid to acquire the land, rather than the fair market value it would have paid for the donated property.
• The city inaccurately recorded $681,990 in capital assets — funds allocated to capital projects — as internal service funds, which are used to track the costs of providing services within a government entity.
• The city used an inaccurate amount of unspent bond money in its investments in capital assets — which inflated the balance by more than $1.3 million.
• The city inaccurately reported $293,801 in its error correction amount.

The city corrected the last three errors, according to the audit report, adding safeguards to avoid future issues.

“The city strives to produce reliable financial statements … with ongoing training for staff and consultant assistance,” the city said in a statement. It intends to correct its errors for the 2025 annual comprehensive financial report.

The city said it will prevent missteps in the future by reviewing assets each year and determining if the “life” of the asset should be extended and adding a new tool to its accounting system that will assist in preparing financial statements, based on the auditor’s recommendations.

“The city takes great pride in its financial practices and will continue to provide excellent service to its citizens with the goal of clean audits of accurate and reliable financial statements,” the city of Camas said.

Mia Ryder-Marks; 360-735-4547; [email protected]