Moss Adams outlines 2024 audit focus for Tacoma: capital projects, internal controls and environmental assurances

Olga Darlington, the Moss Adams engagement partner, briefed the Government Performance & Finance Committee on Jan. 21 about the firm’s 2024 year-end audit work for the city, Tacoma Public Utilities (TPU) and several city funds.

Darlington said Moss Adams’ work will cover the city’s five audited funds plus TPU’s electric, water and rail funds and the city’s environmental-services funds. The audit will include financial statements, required supplementary information and the agreed-upon procedures engagement associated with Department of Ecology or environmental agreements. She emphasized auditor independence and said auditors “perform the audit based on the information that’s provided to us by management,” while management remains responsible for the financial records and for internal controls.

Significant audit areas highlighted included internal controls around cash receipts/disbursements, billings and receivables, payroll, controls over project accounting and construction-in-progress, and capital assets. Moss Adams said it will select a sample of capital projects to test capitalization of costs, speak with project managers and review project accounting. Darlington said the firm coordinates with the state auditor’s office on shared systems (for example, treasury) and will rely in part on their work.

The audit timeline: planning began in fall 2024; internal-controls testing performed in November; final field work is scheduled for late February and March (approximately six weeks); draft and final reports are expected in late April to early May with final reports delivered by June. Moss Adams also noted two GASB pronouncements that will be reviewed during the audit: GASB 100 (accounting changes and error corrections) and GASB 101 (compensated absences). The audit fee for the five funds and TPU work was described as roughly $250,000–$260,000 for the year.

Committee members asked about Moss Adams’ history auditing the city and asked for clarification about the environmental financial-assurance letter required by a consent decree with the U.S. Environmental Protection Agency (EPA). Darlington said Moss Adams has audited the utilities in Tacoma for roughly 15 years and that the financial-assurance letter documents the city’s long-term ability to meet environmental cleanup responsibilities.

Moss Adams will return during the exit conference to present audit results later in the audit schedule; committee members were given the firm’s planned timeline and were invited to participate in the exit call in June.