State auditors issue clean 2023 audit for Okanogan County but flag incomplete SLFRF reporting

Okanogan County commissioners heard the State Auditor's Office present its draft 2023 audit Friday, receiving an unmodified opinion on the county's accountability and financial-statement audits but a federal finding for incomplete reporting of State and Local Fiscal Recovery Funds (SLFRF).

The finding described a failure to include seven of eight SLFRF projects in the county's 2023 project-and-expenditure report, omitting roughly $1,400,000 in funded projects, according to Steven from the State Auditor's Office. "The county did not have an effective process for ensuring it prepared an accurate and complete report based on supporting documentation and Treasury guidance," Steven said during the exit conference.

The audit team said the county otherwise complied in all material respects with applicable state laws and county policies in the areas tested, including cash receipts, treasury activities, restricted funds, accounts payable, electronic fund transfers and Open Public Meetings Act compliance. "We issued an unmodified opinion on the fair presentation of the county's financial statements in accordance with the regulatory basis of the county," Steven said, noting the statements are prepared on the state's prescribed cash basis rather than GAAP.

Why it matters The SLFRF reporting error triggered the formal finding because federal grant compliance rules under 2 CFR ' 200.516 require complete and accurate program reporting; auditors said such federal tests are black-and-white and a missing report line generally results in a finding. County officials told auditors the reporting omission was a timing and technical issue that is being addressed; auditors noted corrective actions and a corrective-action plan are included in the draft report.

Details from the exit conference - Auditors performed both an accountability audit and a federal-single-audit compliance review for 2023. They reported no significant deficiencies in internal control over financial reporting or over major federal programs, except for the SLFRF reporting finding that resulted in reporting under 2 CFR 200.516. - The auditors identified the highway planning and construction program (CFDA 20.205) and SLFRF as major programs selected for testing. - The draft report documents prior findings and a schedule of prior audit findings; the county included corrective-action summaries for earlier issues. - Estimated audit cost reported at the entrance conference: approximately $93,000 plus about $5,100 in travel; the auditors estimated the next audit (2024) at roughly $85,500 plus travel, subject to planning adjustments.

County response and next steps County staff and commissioners acknowledged the reporting error and told auditors they have worked toward a resolution. The draft audit includes exit items and recommendations that county management will address; auditors said a final report is expected in about two weeks and a corrective-action plan is in the draft (page 29 of the packet), which the county will publish alongside the final audit.

Formal action Commissioners moved and seconded a motion to authorize the vice chair to sign the two representation letters to the State Auditor's Office (one for the accountability audit and one for the federal compliance/financial statements audit). The motion was called to a vote and proceeded; the record shows the board authorized the vice chair to sign the letters.

Ending Auditors thanked county elected officials and department heads for cooperation and for the overall clean audit; auditors said their office will return later this year to begin the 2024 audit work once the county files its annual report.