State auditors find Spokane complied in all material respects in 2023 accountability audit

The State Auditor's Office told Spokane's Finance & Administration Committee that the city's 2023 accountability audit found the city's operations "complied in all material respects with the applicable state laws, regulations, its own policies and has adequate controls over the safeguarding of public resources," Dylan Wharton, lead auditor, said during the committee's exit conference.

The audit covered the city's fiscal year Jan. 1–Dec. 31, 2023, and used a risk‑based approach that included review of council minutes, financial trends and interviews with key staff, Alicia Shaw, local audit program manager, said. Auditors examined several areas in more detail, including compliance with a homelessness-related System Demonstration Grant, controls for tracking theft‑sensitive assets (police, fire, library and IT), and police department controls over citation reconciliation, property disposition and drug seizure funds.

The auditors added, during fieldwork, a review of the COPS contract monitoring after a concern was raised. They also noted a prior-year management letter on IT user access controls issued in March 2024; because that management letter was issued late, the 2023 audit period did not give the city sufficient time to address it and auditors plan follow‑up in a future audit.

Wharton told the committee the actual audit cost came in about $27,000 below the entrance conference estimate, largely because city staff provided timely responses and auditors did not encounter issues that required expanded work. He said the next in‑person engagement will be the financial statement and federal grant compliance audit planned for mid‑May to early June 2025, with an estimated cost of about $286,000.

Danielle Arnold, the city’s internal audit manager, introduced the presentation and thanked staff for cooperation. During Q&A, committee members asked about how audit findings generate policy recommendations. Wharton and Shaw explained auditors communicate recommendations to management during the engagement; if the city lacks policies or has noncompliance, recommendations are included and tracked for corrective action.

The auditors said the city's accountability report will be published on the State Auditor's Office website about one to two weeks after the exit conference and that the SAO will send a brief customer service survey to city staff and officials who worked with the audit team.

For the committee, the auditors emphasized the role of accountability audits in building public trust, improving operational effectiveness and safeguarding public resources.