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State Auditor: Tacoma largely compliant but audit flags payroll timekeeping and a small TPU payment issue
Summary
State Auditor staff told the joint committee that the city's 2024 accountability audit found compliance in all material respects but recommended strengthening supervisory review of timekeeping after an investigation at Tacoma Public Utilities identified payments for hours not worked (SAO cited roughly $2,004 determined misappropriated and $2,506 questionable in the reviewed cases).
Sandra Groschon, audit manager for Team Tacoma at the Washington State Auditor's Office (SAO), and lead auditors Judy Lee and Jason Starr presented the results of the city's 2024 accountability audit on April 21.
Jason Starr summarized the results: "the city's operations complied in all material respects with the applicable laws, regulations, and its own policies and provided adequate controls over the safeguarding of public resources," he said. At the same time, the SAO identified areas for improvement related to payroll monitoring and timekeeping and communicated those in a management letter.
The SAO described the audit scope (Jan. 1'Dec. 31, 2024) and listed departments reviewed, including Tacoma Public Utilities (TPU), public works, police, finance and others. As a follow-up to prior issues, auditors tested payroll, overtime, disbursements and controls. In one TPU matter that the city had investigated, auditors said the city's review identified five line-clearance tree-trimming employees who were paid for hours they did not work. SAO stated that it "determined, $2,004.00 ... paid for hours not worked was misappropriated, and then $2,506 was questionable." The office recommended strengthening supervisory review of time records, updating payroll policy language to require supervisor review and approval where appropriate, and providing supervisors with training and procedures to verify field work.
Assistant Finance Director Susan (first name used in the meeting) responded that the city is drafting a revised payroll policy and will provide additional training for supervisors; she described the TPU matter as time that had been approved but later judged not to reflect actual work performed.
SAO also demonstrated its Financial Intelligence Tool (FIT) and told the committee the audit report would be published online in one to two weeks. Auditors asked the city to implement the management-letter recommendations and indicated corrective actions were in progress.
Next steps: SAO will publish the formal report on its website and send the city guidance and a customer survey; city staff said it will update payroll policy and conduct supervisor training as recommended.
