The Washington State Auditor’s Office issued an audit finding against the Town of Coupeville for a financial reporting error.

It was town staff that brought the error to the auditor’s attention after it was missed in the 2014-15 audit, said the report.

The town didn’t properly report a Water and Waste Disposal System for Rural Communities loan from the U.S. Department of Agriculture in 2015.

Local governments are required to prepare a Schedule of Expenditures of Federal Awards.

in annual financial reports, but Coupeville staff did not know loans were to be included in that report, the audit report states.

The 2015 error only became known in late 2017, after town staff attended Washington State Auditor’s training on managing federal awards, according to the town’s response in the audit.

Correction of the misstatement caused the town’s annual federal expenditures to exceed the $750,000 threshold, which means a federal single audit was required.

The town scheduled the federal audit after the mistake was corrected, the report states.

Auditors recommended the town “strengthen internal controls” to ensure federal awards spent are properly recorded on the schedule.