County faces audit deadline...again

The clock is ticking at Whitman County’s finance department.

State auditors returned their 2008 financial statement last month to county officials because it improperly accounted for capital and depreciation costs of county-owned assets.

In some cases, the financial statement counted depreciation twice, County Commissioner Michael Largent said.

If the county does not return its 2008 year-end financial statement to state auditors by Feb. 16, this will be the fifth consecutive year a Whitman County report has not made it to state auditors.

“This is not acceptable,” declared Commissioner Pat O’Neill.

If the county’s finances are not submitted to the state auditor’s office in time, auditors will not review them.

The county paid $17,898 to the firm who worked on their financial statement.

Lack of an audit of the county’s financial statements includes no penalty, but could damage the county’s rating in the event it decides to issue bonds at some future date.

“I’m very concerned about getting this done,” said Commissioner Greg Partch. “It holds up everything if we don’t.”

Partch worried a hit to the county’s bond rating could make bonds the county plans to issue for Hawkins Companies’ stateline strip mall more expensive.

Bev Divine, county finance director, said they should be able to finish the statement and return it by the Feb. 16 deadline.

“Yes. I feel confident we can get it done by then,” said Divine. “We’ll be working long hours seven days a week to get it done.”

Divine said the deadline is a good time because it is just before her department is slated to begin finalizing the 2009 finances.

Commissioners said meeting the audit date is crucial.

“I wanna see just what happens on the 16th,” said O’Neill. “If they make it, hallelujah. if they don’t… I’m sure commissioners will get together and we’ll come up with an action plan.”

“If we don’t meet the Feb. 16 deadline then we’re going to have to make some internal changes,” said Partch.

The report was submitted to the state audit team in November after it was completed by the Spokane accounting firm of Dingus, Zarecor and Associates.

Divine attributed the problem with the 2008 statements to Dingus.

“Dingus has not been as good as they started out to be,” said Partch. “But we can’t blame the whole thing on Dingus. We’ve got people here that are supposed to be double-checking our information.”

The county contracted the Dingus firm to finish financial statements in 2007, after years of being unable to submit them to the state on time.

Whitman County paid the Dingus firm $17,898.50 to work on the 2008 financial statement.

Divine explained the accountant assigned to the county’s finances was laid off last year, which left Dingus without knowledge of the county books. That accountant was later hired by the Anderson Perretti firm.

The county has since cancelled its contract with Dingus. Largent said Monday the county has hired Anderson Perretti to finish the 2008 financial statement on a per hour basis.

“That’s news to me,” O’Neill said Tuesday. “I first heard of that yesterday. I was as shocked as… I was shocked.”

The county has not submitted a complete report to auditors since making a switch from cash to accrual accounting in 2003. Accrual accounting means expenses and revenues are logged when they happen, not when cash actually changes hands.

Largent said the accrual system is more involved and complicated, and staff never had time to fully learn it.

“I think commissioners underestimated at that time the resources that would be necessary to develop a proper accounting system,” said Largent.