Tuesday, August 12, 2014

Audit...And Forget It?

So...Once again, the State of Washington has audited the City of Port Angeles. And once again, they have found that everything is not necessarily in order. Big surprise, huh?

Below you'll find some text taken directly from the findings (those are bad things) from the Washington State Auditor's Office...

Schedule of Federal Audit Findings and Questioned Costs

1. The City does not have adequate internal controls to ensure compliance with federal suspension and debarment requirements.

Background

The City spent $633,008 in federal grant funds during 2013 on various City projects to improve lighting for the port area of Port Angeles.

Federal requirements prohibit grant recipients from contracting with or making subawards to vendors who have been suspended or debarred from doing business with the federal government. The City is required to verify that all vendors receiving $25,000 or more in federal funds have not been suspended or debarred. The City can obtain a written certification from the vendor or insert a clause into the contract where the vendor states it is not suspended or debarred. Alternatively, the City may review the federal Excluded Parties List (EPLS) issued by the U.S. General Services Administration. This requirement must be met prior to entering into a contract with the vendor.

Description of Condition

We reviewed the City’s internal controls and compliance with regulations over its Port Security Grant Program. The City did not have internal controls to ensure compliance with the suspension and debarment requirements.

Cause of Condition

Typically, contracts are awarded through the public works department, where systems are in place to check for suspension and debarment; however, this contract went through the community development department where there is no process in place to ensure compliance.


Effect of Condition and Questioned Costs

 
The City paid one vendor $261,501 for lighting fixtures and poles and did not verify whether the vendor was suspended or debarred. This material weakness in internal controls increases the risk the City will enter into contracts with vendors who are suspended or debarred from receiving federal funds. Payments on contracts to suspended or debarred vendors would be unallowable and cause the City to repay the funding to the grantor.


2. The City’s internal controls over financial statement preparation are inadequate to ensure accurate and complete reporting.

Background 
 


City Council members, state and federal agencies, and the public rely on the information included in the financial statements and reports to make decisions. It is the responsibility of the City to design and follow internal controls that provide reasonable assurance regarding the reliability of financial reporting. Our audit identified deficiencies in internal controls that adversely affect the City’s ability to produce reliable financial statements.

Description of Condition
 
We identified the following deficiencies in internal controls that when taken together, represent a material weakness:
 
 
City staff did not adequately research how to appropriately record nonroutine transactions on the financial statements.

The current review process over those responsible for preparing the financial statements was not effective in ensuring the financial statements are accurate and complete.

Cause of Condition  

The City had processes in place to prepare financial reports; however, the City did not have adequate internal controls or appropriate supervision of staff work to ensure accurate financial statement preparation. In addition, the City did not allow sufficient time to review the financial statements.

Effect of Condition

The City’s financial statements contained significant misstatements that were not detected by City management prior to submitting their completed statements. We identified the following misstatements in the original financial statements we received for audit:
The Wastewater Utility Fund long-term debt was understated and nonoperating revenues were overstated by $10 million. This resulted from the City recording proceeds from a debt issuance as nonoperating revenue rather than long-term debt.

The General Fund liabilities were understated and the Capital Improvements Fund receivables were overstated by $974,828 due to an incomplete adjusting journal entry.

The Solid Waste Collection Utility Fund nonoperating revenue was understated by $522,239 due to a posting error.

These errors were subsequently corrected by the City. In addition, we identified less significant errors and misstatements in the financial statements of which most were subsequently corrected.

 *********
Hmmm...Overstating revenue (by millions!)...Understating long-term debt...Running grant money through departments that aren't set up to handle it...All of which also amounts to misleading the City Council and the public...

Hmmm...Sound like a solid state of affairs to you? Sound like a well-run ship?

Are you reading this, Yvonne Ziomkowski? PDN? KONP? Anyone care? Anyone worried?


26 comments:

  1. I read it, got it from a couple sources. You explained it best.

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  2. Sounds like business as usual at the city. Staff lying and manipulating the city council. Sadly, this is unlikely to come as a news flash to anyone.

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  3. This how it goes at City Hall.

    City staff lie and con and twist things to protect their jobs, cover their asses, get their hands on funds, and/or to get back at people they're feuding with. Public service is the last thing on their minds.

    When they're caught doing the latest illegal or unethical thing, they shed a crocodile tear or two, and promise to go forth and do good.

    Then they go right back to doing things they way they've always been done here.

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  4. One of the more remarkable things about this story is that the State Auditor's Office actually had the intestinal fortitude to report publicly on the city's improper actions and mismanagement. The SAO unfortunately has a long and shameful history of sweeping such things under the rug.
    Either these findings represent really egregious wrong-doing that even the SAO felt it could no longer ignore, or we now have a more ethical State Auditor than we did in his predecessor Brian Sonntag.
    Maybe it is a bit of a combination of both factors?

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  5. Hey CK...Are you aware that Dale Wilson has cut and pasted this posting for his Port O Call website? In case you didn't know...

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    1. I did not know, so thanks for the heads up. It would have been nice if Dale had done the same thing...

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    2. Umm, CK, I thought we had an agreement to use each other's stuff. Was I mistaken? I did give attribution.

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    3. Now it's down. The Port O Call website is really...unique?

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    4. Dale, it's fine that you used it. It's just that it would have been nice to get a heads up about it, that's all. No problems on this end, though.

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    5. Tim is still doing "intel" but it sounds more like tattletale.

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    6. Dale's "blog" should be re-named "Pile O' Crap"!

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  6. ...Part of which illustrates the larger problem we face here in Clallam County.

    We're remote, out of the way, off the radar, as it were. In other words, there aren't necessarily watchful eyes overseeing what our so-called local leaders get up to. So, given their personal inclinations and the lack of watchmen, they generally get up to no good.

    So, when those tasked with checking and watching what they are doing actually do show up - either on their schedule (like an audit), or in response to complaints from the public (Karen Rogers, the Port, etc.) - they usually don't have to dig too deep to find something wrong. Wrong is kind of the elephant in Clallam County's living room.

    But...Finding wrong here usually, at best, amounts to a slap on the wrist. No one gets fined. No one gets fired. Lord knows, no one gets arrested. So, as a previous poster noted, the bad guys just go right back to doing bad.

    The rot and ruin here is absolutely facilitated - at the very least - by our "betters" on the state level, and to some degree, by those on the federal level as well. They know that the crooks have taken over the prison here, but they just don't seem to care.

    Now, is this because they are crooks themselves, or because it's just too much work to do their jobs, or..? Who knows. But the fact remains that the problems we have here are enabled by those from outside the area.

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  7. When is the council going to get a clue?
    I thought the council worked for the people?
    Just gives credence to vote for anybody except an incumbent. Hell I would go as far as write in Donald Duck's name (can't be any worse than what we have now).

    This has been going on for years with the same people in the same departments. I thought with the new city manager who actually had a vested interest in the community would have changed things. I guess my wishful thinking has been misplaced again.

    So the blame game will begin. The council members up for re-election will blame their decisions based on bad information. The department heads will blame their people and on and on it goes and nothing will come of it.

    If a private or public business was run like this what do think would happen. Can we all say WorldCom or Enron!

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  8. I very much doubt anyone on the Council will raise a fuss about this. They LIKE being lied to. It gives everyone involved some level of deniability.

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  9. CK, you have done it again. You had this info up on Tuesday, and now, on Friday, the PDN is finally getting around to reporting on it. You don't even live here anymore, but you're still more up to date than the local "paper of record." Which, of course, is part of the problem. Thanks for continuing to poke the hornet's nest, even if you are no longer among us. It is appreciated.

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  10. Released Monday, covered Friday and apparently "everything's fixed, no big deal guys!" Great job PDN!

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  11. Just because the SAO reports it's finding doesn't mean anything happens at the local level. There are outdated findings from the SAO stuck in the prosecutors office at the County that have yet to be dealt with going back a few years. That's money being tied up that should go back to benefit local residents.

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  12. Even IF we accept that there was no evil intent in any of this, and it's all down to mere sloppiness, it's still a problem. No, none of us are perfect, it is true. But to make mistakes involving such HUGE sums of money would seem to involve more than being just a little careless. It's more like major league stupidity. We need to demand more from our supposed public servants. Will any heads roll over this? Will any members of the City Council take this up as an issue? We'll see.

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  13. The city is insolvent. They are back-filling the general fund by funneling chased down grant money, and then over-inflating bids, so they can siphon off money. This is ever so clear if you read the budget, and pay attention to the kinds of grants they seek.
    Our city government should sink into its own vomit. All the money that comes in is spoken for, for years, why do you think that they keep raising utilities...outrageously? It's the only way they can try and keep afloat, that and "improvement" projects, constructed by the same backroom dealers, with poor workmanship, sub-standard materials. We're all on a sinking ship folks. There IS no money....our city has spent it like drunken sailors on an all-night drinking and whoring binge. We should make them go belly up, declare bankruptcy, and start fresh. Fire the lot of them, and let the state come in and fix things.
    Meanwhile, our city council is a neutered old dog. The city manager (whomever he is) runs things, and the city council is just window dressing -- welcome to the Weak Mayor government we have.
    It's disgusting. The state doesn't have the balls do do more than just slap their wrists...wonder why that is?

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  14. Did anyone else see the article about the Marshall/Porter race for judge position #1? The Clallam Bar Association polled their members, and the challenger, Marshall, came out rated higher. So Porter "conducted his own poll" and, surprise, surprise, his showed that he came out with a higher rating.

    Stuff like this, all our Port Angeles/Clallam County dysfunction on parade, it's like having a really tragic sitcom playing out in front of us - except we're all trapped in the show, and paying for it as well. It's pathetic, just like Rick Porter.

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    1. After getting your comment, I checked out the story, and it is indeed very funny/pathetic. Judge Porter is showing very, very poor judgment, and then some.

      On a related note...I just did a totally impartial poll of my own, and the results show that this blog is one of the Top Ten blogs in the entire universe! Gosh! Who would have guessed?

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    2. If anyone needed further proof that Rick Porter is totally out of touch with reality, here it is.

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  15. recent craigslist post (and this is what we've all come to -- in our attempt to communicate. PDN sucks!) post: http://olympic.craigslist.org/pol/4626436818.html

    After moving to Sequim, I received my gratuitous speeding traffic while passing an intoxicated driver driving 20 mph under the posted speed limit. The driver was singing at the top of her lungs, out the driver's side window. In order to defend myself, I requested information about the radar device used by the WSP. I spoke with dozens of attorneys and learned it is a waste of time defending a speeding ticket case with Judge Porter presiding. The attorneys told me Porter is a 'loose cannon' that does not follow Washington law. He shoots from the hip when he makes a ruling.

    The information that I gathered clearly showed the WSP is using a defective Lidor radar. In court, Judge Porter refused to view my eight military and independent reports. Judge Porter using his own opinion changed the RCW laws regarding speeding while passing a slow moving vehicle from lawful to unlawful. Porter also claimed the Supreme Court said the radar unit isn't flawed. I asked how many judges have degrees in electrical engineering. As a civil rights activist, I requested copies of traffic violations issued by the Clallam WSP to compare DUI, speeding and impeding traffic arrests percentages of other law enforcement agencies. Those requests have been denied. BTW, impeding drivers cause more accidents than minor speeding and indicates impaired driving. All speeding ticket revenue go directly to the WSP for pay raises, bonuses and better equipment. They do not need to prove that you were speeding. It's your word against their word. Based on the recent scandals with the WSP for cheating on tests, false accusations against fire fighters, etc., I wonder if any WSP officer can tell the truth in court or while writing a ticket.

    In the last year, I called in at least seven intoxicated driver reports. No response. The last distracted driver I reported was driving eastbound in the construction zone between Sequim and PA. The driver drove off the right side of the road 12+ times and wondered into oncoming traffic six times, forcing drivers to evade her. When I passed this reckless driver at the Kitchen/Dyck passing zone, I watched her applying finger nail polish. I looked up and saw a WSP officer looking directly at us. He ignored the distracted driver.

    If the Washington State Police and Judge Porter are trying to keep us safe, they have it all wrong. I believe the WSP should be investigated for malfeasance and Judge Porter suspended for judicial misconduct and should not be re-elected. It's my understanding that Porter has been admonished for other offenses.

    I've sent this letter several times to the Peninsula Daily News and they have refused to print it. The editor called up and chewed me out for being critical of Judge Rick Porter and the WSP. Why? It's the truth and the truth should always be told.

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  16. Thanks to Tom Harper!

    I came across a comment he posted about the "other blog" in town, and guessed he was talking about this one. I hadn't looked in here since CK said it was shutting down a few months ago.

    So, glad to see it is still going. Most interesting comments, here.

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    1. Yes, whether he's abusing his wife or abusing the truth, thanks to Tom Harper. He's such an asset for Port Angeles.

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    2. It's now just after 10am. I wonder if Tom Harper has managed to roll his lazy, spoiled butt outta bed yet...

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