Grossly inaccurate accounting prompted the Washington State Auditor’s Office to declare that Island County’s 911 service provider’s system of tracking dollars must improve.
A recently released audit report follows other, separate problems with financial oversight at I-COM that came to light a few months ago, but officials say a new I-COM budget committee should resolve the problems. (See full report at bottom of page.)
The state auditors’ report covers from Jan. 1, 2007 through Dec. 31, 2008 and finds that the I-COM staff responsible for preparing financial statements didn’t have adequate knowledge to accurately prepare them. The report found that the agency’s financial statements contained major errors that weren’t discovered by employees.
Inspectors found cash and investments were understated on financial statements by $225,397 in 2007 and $180,220 in 2008; salaries and wages were overstated on financial statements by $221,533 in 2007 and $247,030 in 2008; and personnel benefits were understated by $181,976 in 2007 and $245,541 in 2008.
“I-COM later corrected the errors; however, these deficiencies in internal controls make it reasonably possible more serious misstatements could occur and not be prevented or detected by the center in the future,” the report states.
Island County Sheriff Mark Brown, a member of the I-COM board, was quick to point out the money I-COM receives was properly used, if not properly recorded.
“The most important thing that came out of this is there wasn’t any misappropriation of money,” Brown said about the audit. He added I-COM has to refine the way it provides financial information to the state.
I-COM Director Tom Shaughnessy said that staff training will improve and the agency should be in compliance when its next scheduled audit takes place in two years.
The audit finding comes after Coupeville officials criticized I-COM over a one-time payment that the county, cities and the town had to contribute to help pay off I-COM’s unwise construction loans and to bolster the 911 service budget. Coupeville had to pay an additional $11,000. Town officials, notably Mayor Nancy Conard, last spring questioned I-COM’s ability to budget effectively.
Brown said he doesn’t anticipate the latest audit finding would hurt relationships with municipalities. He noted that a financial oversight committee was formed this year to help I-COM better manage its finances. The committee is comprised of Brown, Island County Budget Director Elaine Marlow and city of Oak Harbor Finance Director Doug Merriman.
The audit issued last month was the first time the state auditor’s office inspected the agency’s financial statements. Kara Klotz, spokesperson with the state auditor’s office, said I-COM’s revenue exceeded $2 million, which is the threshold to review the agency’s financial statements.
Auditors will continue to inspect the agency’s financial statements every two years as long as the agency’s revenue remains above $2 million. The state auditor’s office still performs accountability audits on I-COM annually.
I-COM’s Financial Statements Audit Report from the Washington State Auditor’s Office
