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City finance director reports SAO audit finding inadequate internal controls for 2021–2022, outlines fixes
Summary
Finance Director Kelly Beech told the council that the Washington State Auditor’s Office found the City’s internal controls for 2021–2022 "were inadequate for ensuring accurate financial reporting," detailed causes including misstatements and missing transactions, and presented corrective steps including monthly reporting and staff training.
Finance Director Kelly Beech summarized the Washington State Auditor’s Office (SAO) financial and accountability audit for the City of Langley’s 2021 and 2022 annual financial reports. Beech said the auditors found the City’s internal controls for those years "were inadequate for ensuring accurate financial reporting," citing material misstatements in initial filings and repeated issues over several years.
Beech listed contributing factors she said led to the misstatements: lack of review by a qualified individual before certification, reporting of internal activity that overstated expenditures and revenues, missing transactions tied to vendors that were later inactivated, inaccurate tables and notes due to incomplete debt schedule referencing, and incorrect calculations of postemployment benefit and pension liabilities. She said all material misstatements were corrected on the 2021 and 2022 reports and described planned corrective steps, including monthly financial reports to the FPLC, quarterly reports to council, inclusion of supporting invoices for A/P vouchers, a simplified chart of accounts, and annual training on SAO tools and liability calculators.
