Grand Coulee cleaning up financial records mess

by Jacob Wagner

The city of Grand Coulee’s financial records seem to be getting in order after years of chaos, but there’s still a ways to go.

“Things are getting back on track, and at least our financial system balances to what our bank statements say we have,” said City Clerk Lorna Pearce, who took the position in 2018. “We’re pretty sure the numbers we have are actually what we have.”

According to the audit of the year 2017 by the State Auditor’s Office, “since 2012, we have reported the City of Grand Coulee did not have adequate controls over numerous aspects of financial operations.”

“It’s just one of those deals; things get let go, and it’s tough to dig our way out of it,” Pearce said. “The auditor’s office has been instrumental in assisting with this process.”

The city council was presented with a January 2019 financial report at their Feb. 19 meeting, a report Pearce said was the first financial report the council has seen in seven years.

According to the audit, one of the problems was that “the former Clerk-Treasurer did not consistently perform cash activity reconciliations to bank records, nor compare monthly revenue and expenditure activity to bank deposits and payments.”

Another cause of the problem, the report says, is that the mayor and council didn’t take appropriate action to make sure appropriate financial records were being kept.

“According to the City’s internal records, the General Fund had a negative fund balance of about $162,000 and $78,000 in 2016 and 2017, respectively. In addition, the General Fund had a negative operating margin of about $51,000 in 2017. However, these financial records appeared to be inaccurate and based on the City’s bank statement balances, which indicate the financial condition could be worse than reported in City records.”

Without the right numbers, it is hard for a city to make decisions, the auditor pointed out.

“Without reliable information,” the audit report said, “City officials are unable to evaluate the City’s financial condition or determine if the City can meet current or future obligations.”

The mess resulted in the firing of the city’s former clerk, whom Pearce replaced.

The city’s response to the auditor’s office, included in the report, says that “The Clerk Treasurer is now completing the bank reconciliations on a monthly basis, the Mayor is then going through and checking for discrepancies. The City has been working with the Auditor’s office to bring the financials of the City back into balance.”

The city also plans to present the council with at least quarterly financial reports.

“They have been very helpful and very understanding as far as this whole process goes,” Pearce said about the State Auditor’s Office. “It’s going to take more than a few months to get it all straightened out. There’s going to be little things pop up over the next couple years. But it’s getting there!”