State auditors continue to find county deficiencies

The Washington State Auditor’s Office last week released another audit report for 2014, again finding that the county lacks significant internal controls.

This audit, unlike the previous audit released in September, dealt with payroll processing. The prior audit was in regard to the county’s financial processing and reporting system.

According to the audit report, the county has made some progress since working with the Governmental Finance Officers Association (GFOA) and State Auditor’s Office Local Government Performance Center, but “no improvements have been made to the current methods used to process payroll.”

The report cited a complex payroll process with a system which “relies heavily on monitoring controls to detect errors after they happen instead of preventative controls that could eliminate errors before they occur.”

The auditors took a random sampling of 40 payroll transactions for their report. In those 40 samplings, they found more than 30 instances where employees took leave without supporting documentation, 37 instances of uncertified time sheets and a Sheriff’s Department employee who worked 10 hours of overtime that was not properly paid or approved as overtime.

Additionally, “Central Human Resources and Payroll departments made multiple adjustments to the leave balance for one employee that could not be verified or supported” and another eight instances were found where leave was not supported or approved by the department head.

Several recommendations were made for the county to see improvement, including continued work with GFOA and the State Auditor’s Office Local Government Performance Center, developing written procedures and manuals, training department personnel, evaluating the payroll system to determine if processes and controls can be automated, developing manual payroll monitoring and retaining supporting payroll documentation.

The county responded to the report.

“Internal controls are vital to ensuring that public resources are safe guarded against fraud, misappropriation and error,” the county’s response section of the report stated. “Whitman County acknowledges that changes need to be made to strengthen internal controls, especially over the payroll functions within the county.”

Whitman County has approximately 260 employees, and salaries and wages accounted for approximately $10 million of the county’s annual expenditure and 27 percent of budgeted expenditures in 2014, according to the audit report.

The report also indicated that Whitman County started a new software program in 2011 which is used as the centralized payroll system and is managed by the county auditor’s office with the human resource department in charge of establishing and communicating the official payroll policies and procedures to county departments.

Whitman County’s audit woes date back more than a decade, during which the county has failed multiple audits or failed to submit reports.