The Washington State Auditor's Office told the Snoqualmie City Council on Oct. 27 that the city's accountability and financial-statement audits for the 2022 and 2023 fiscal years complied in all material respects with applicable state laws, regulations and the state-prescribed Budgeting, Accounting, and Reporting System (BARS). Auditors also reported that the city met specified requirements for its Coronavirus State and Local Fiscal Recovery Fund attestation work for calendar year 2023.

The audit team issued an unmodified opinion on the city's financial statements prepared on the regulatory basis required by state law and the BARS manual, and found no material weaknesses in internal control. The team also noted an adverse opinion relative to generally accepted accounting principles in the United States (GAAP), explaining that Washington cities prepare financial statements under the state-prescribed BARS basis rather than GAAP.

"An audit lets staff and the public know if operations are working properly and where improvements can be made," Audit Manager Haji Adams said during the exit conference. Audit lead Zach Shelton told councilors the audits were intended to build public trust and to verify compliance with laws, rules, and the city's own policies.

Auditors identified one uncorrected misstatement that city management judged immaterial to the financial statements as a whole: an underreported revenue item of $21,141 arising from an entry that could not be posted after year-end system constraints. "We agree with management's representation that this misstatement is immaterial," Shelton said.

Finance Director Drew Boutet and Deputy Finance Director Jen Hughes told the council their office had worked intensively to catch up multiple years of audit work. "This exit conference gives us the opportunity not only to hear the final outcomes, but to celebrate the continued strengthening of our internal controls," Hughes said.

Auditors also summarized costs and next steps: the exit-conference work for the two-year engagement aligned with the original estimate of about $69,200, and the next audit (covering fiscal year 2024 across accountability, financial-statement and SLFRF attestation work) is estimated at about $42,300. The SAO said its Local Government Support team and the Center for Government Innovation can provide technical assistance and trainings to local governments seeking help with financial reporting or operational efficiency.

Councilors raised questions about the GAAP/ BARS differences and materiality thresholds. "Is Washington going to be required to change over to GAAP?" Councilor Cotton asked. SAO staff and city finance leadership explained there is no current statewide requirement to move to GAAP, and that doing so would typically require additional finance staffing and resources. On materiality, auditors said quantitative thresholds guide testing but that they also consider the aggregate of errors and internal-control implications.

The SAO's attestation report for the Coronavirus State and Local Fiscal Recovery Fund covering calendar year 2023 concluded the city complied, in all material respects, with the specified requirements for allowable activities and cost principles during the period examined.

The exit conference packet and the draft reports will be posted on the SAO website and the city will be notified when the final reports are released. The council and mayor publicly thanked finance staff and the audit team for completing multiple years of audits and for the administration's work to strengthen controls.

What happened next: council adjourned the special meeting and reconvened its regular meeting at 7 p.m.