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Preston audit reveals 'significant' discrepancies
PRESTON _ When the Washington State Auditor comes to town
and checks on business and financial practices, in many instances the
findings are innocuous. However, the Feb. 18 release of the audit results for
King County Water District No. 123 in Preston turned up several
irregularities for the period Jan 1, 1996 to Dec. 31, 1998.
On the plus side, audit officials determined that in most cases the
district had complied with state laws and regulations and its own policies
and procedures. However, they also stated missing and incomplete records
made it "difficult to conduct the audit."
The auditors highlighted three primary areas:
An absence of meeting minutes for several months in 1996, 1997
A substantial overpayment of compensation to the three district
A lack of supporting documentation for $47,456.81 in claims
paid in 1996.
The district is a small one, covering approximately 10 square miles
in the vicinity of Preston and serving only 73 customers. The three
commissioners during the audit period were Chairman Roger Armstrong,
Steve Carlson and Robyn Chisholm.
"It was a regularly scheduled audit," said Karen Stromme, audit
manager for the state's King County Audit Team. "It's a very tiny district;
we do it about every three years."
In their report the auditors noted the commissioners were unable to
locate district meeting minutes for nine months in 1996, five months in
1997 and one month in 1998 stating, "The minutes either were not recorded
or not retained. State law requires the minutes of all regular and
special meetings, except executive sessions, to be promptly recorded and open
to public inspection."
The commissioners' response was that they did not know what had
happened to the minutes. However, following their Jan. 27, 2000
regular meeting, the commission members notified the state auditor that they
had implemented measures to ensure this never happened again and had
located and filed the missing documents.
A second study determined the three commissioners
overcompensated themselves during the audit period. Between 1996 and 1998
the members of the board authorized themselves a rate of $75 each
per meeting. However, state law limited commissioner compensation to
$50 per meeting through 1998, and then raised the limit to $70. Therefore,
the commissioners were overpaid a total of $2,175 through 1998 and
$90 through the end of the audit period.
The auditor recommended the district seek repayment for the
amounts paid in excess of state law and for amounts paid for meetings which
had no documentation.
In response, the commissioners stated it was a simple
misunderstanding dating to the last audit in 1996
and they had reduced their per-meeting compensation to $70, per state
law. They did not, however, address the issue of repayment, a point noted
Finally, the auditors called into question $47,456.81 worth of
claims in 1996 that were paid without supporting documentation. In their
report the audit team noted, "Without such supporting documentation, we
were unable to determine if the expenditures paid by the District during 1996
were appropriate or properly authorized ... the lack of supporting
documentation results in a lack of accountability
and unnecessarily increases the risk of fraud or abuse."
Again, the commissioners were unable to provide an explanation
on why the documentation was not retained. Following their January
2000 meeting they stated they had implemented measures to ensure that
the event did not reoccur.
As of Tuesday morning, the commissioners had not responded to
requests for comments and additional information on the audit report.