PORT TOWNSEND — Jefferson County officials will work with the state Auditor’s Office to correct problems that led to an audit finding that the county issued incorrect financial reports in 2014, the county administrator said.
In a report released this week, the state said Jefferson County reports lack adequate controls to ensure accurate financial reporting.
The audit period examined records from January to December 2014.
The audit identified shortcomings on internal controls over accounting and financial reporting that, when taken together, represent “a significant deficiency,” the state report said.
“I can see how people would think this was significant, but it really isn’t,” said County Administrator Philip Morley.
“It is a follow-up of an issue that we’ve had for some time.”
“Are we missing any money? No,” Morley said.
“Could we have better procedures in place? Yes.”
Morley said a major problem is incompatibility between software used by the county auditor and the treasurer.
Reports generated by the treasurer’s office using the antiquated Compu/tech AS400 are converted and imported into the auditor’s GEMS system, but the two programs don’t speak the same language, Morley said.
When the problem first emerged, the county developed a software patch between the two systems that “was not 100 percent accurate,” Morley said.
The problem extends beyond software, according to the state’s finding.
“The county did not dedicate sufficient resources to ensure staff responsible for financial reporting had adequate training to perform their duties,” the state said.
County officials intend to meet with a state Auditor’s Office representative over the next few months to develop procedures that will improve its reporting and coordinate its technology, Morley said.
“With the [state] auditor’s help, we will be able to fix what we have and make it work,” Morley said.
The auditor found that several of the county’s reports were incorrect.
The county treasurer’s and auditor’s general ledgers did not include all bank accounts and financial activity of the county, and reconciliation of accounts was inadequate, the report said.
During the 2014 calendar year, the county over-reported timber tax receipts and disbursements by at least $1,276,472, the finding said.
Revenues and expenditures were reported inaccurately, the state said. Both were about 8 percent less than expectations, based on bank disbursements and known reconciling items.
The county also misclassified reserved ending cash of $613,153 as unreserved and unreserved ending cash of $440,000 as reserved, the state said.
State auditor spokesman Adam Wilson said a finding means there are issues that need to be addressed but added that his office is concerned with reporting rather than enforcement.
“We don’t have the power to make a government entity change the way they do business,” he said.
“Our only power is to let the public know of our actions and hopefully there will be actions taken to correct the issues we find.”
It will be some time before the treasurer’s system can be replaced and updated, since an upgrade can cost several hundred thousand dollars, Morley said.
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Jefferson County Editor Charlie Bermant can be reached at 360-385-2335 or cbermant@peninsuladailynews.com.
