State auditors give Mill Creek clean financial and compliance opinions

Mill Creek, Wash. — The Washington State Auditor's Office presented results of three reviews to the Mill Creek City Council on Sept. 23, telling the council the city received a clean opinion on its 2024 financial statements and that auditors found no instances of material noncompliance for the audits they completed.

The audit team’s lead said the office was “pleased to report” it could issue a “clean, unmodified opinion” on the city’s financial statements and that the accountability audit found the city’s operations “complied in all material respects” with applicable state laws and the city’s policies. Kirk Gadbois, assistant auditor from the Washington State Auditor’s Office, delivered the presentation.

The nut of the report is simple: auditors issued an unmodified financial statement opinion, found no material noncompliance with laws or grant agreements, and did not identify material weaknesses in internal control that would require a formal finding in the audit report. Auditors also reviewed the city’s expenditures under the federal Coronavirus State and Local Fiscal Recovery Fund (ARPA-like program) and reported no reportable issues for that program.

Auditors described the three engagements they completed for the city this year: a two-year accountability audit covering 2023–24, a financial statement audit for fiscal 2024, and an attestation examination of the city’s federal COVID‑19 grant expenditures. Maki, the audit lead on the engagement, told the council the accountability audit assessed compliance with state laws, contracts, grant agreements and the city’s own policies and also evaluated internal controls over public funds.

The report did identify lower‑level management‑letter items and “exit items” (minor issues) for staff follow-up. The audit team noted a previously issued management letter on police payroll that requires more time for the city to implement and indicated they will revisit that area in a future audit. An earlier management letter about outstanding checks has been implemented, auditors said. Auditors also explained the differences between audit findings (which appear in reports) and management‑letter recommendations (which are less severe but still require management attention).

Auditors said the engagement was completed slightly under the original budget estimate of about $67,000. The office plans to publish the reports publicly on its website within days and will send the city links after publication.

Council and staff posed several process and accounting questions during the presentation; auditors walked through the differences between BARS‑basis financial statements (the state’s Budgeting, Accounting and Reporting System) and US GAAP and explained the office issues opinions on GAAP statements while also auditing BARS‑basis reports that cities elect to use. No council action was taken at the meeting; the presentation was informational and the final audit documents will be posted publicly by the state auditor’s office.