The city of Bainbridge Island received a deficient finding from the state auditor’s office regarding over $3.5 million it received from the American Rescue Plan Act of 2021.
The report says city management is responsible for designing and following internal controls that provide reasonsable assurance that the city’s financial reporting is reliable and statements are accurate.
The report goes on to say that the city did not incur any eligible ARPA expenditures and did not properly evaluate whether it had met eligibility requirements to receive the grants.
It says the city typically receives grants via a reimbursement basis, and so employees were not familiar with the process for ARPA funds.
The city subsequently corrected the errors in the financial statements.
The auditor’s office recommends the city improve its controls to properly classify and report grant funds.
The city concurred with the findings.
BI will implement these procedures to strengthen internal controls.
•Will seek reporting guidance for special grant programs.
•Will hire outside consultant to perform additional review of financial statements.
•Will ensure there is extra time for financial statement review.