The state Auditor’s Office issued a report Dec. 29, 2022, regarding an audit of Kitsap County for the previous calendar year that discovered some problems.
The audit found issues with internal controls; lack of knowledge of processes; and staff not being given enough time caused most of the issues. Three of the instances were related to federal COVID funds.
With the Coronavirus State and Local Fiscal Recovery Fund, payments were made by the county outside of the qualifying dates. The funds were stipulated for health; economy; premium pay for essential workers; investment in water, sewer and broadband; and to reimburse counties for lost revenue. Kitsap spent $2.04 million for health and water. The audit found seven of 22 that received funds were outside the allowed dates. The funds totaled $51,000.
Problems were also found with $8.11 million spent with the Coronavirus Relief Fund and $4.7 million in Emergency Rental Assistance. The county did not monitor the four agencies it gave funds to. However, in their random check, auditors found the money was spent properly.
Also, $2.144 million was overstated in a COVID Disaster Grants program. To correct the problem, two more programs had to be audited, adding to costs and delaying the audit.
The county did not have an adequate process in place to correctly record bond refunding and specifically identify how to classify the portion of bonds related to Solid Waste. As a result, the county overstated $5.1 million in one fund and understated that same amount in another.
The state recommends the county strengthen controls over preparing and reviewing financial statements; dedicate adequate time and resources to research accounting standards; and consult federal guidance and dedicate adequate time and resources to reviewing the underlying federal expenditures. The county responded by adding a member to the financial statement preparation team and was in the process of evaluating internal controls.
The final problem was with the Community Development Block Grants, which help fund affordable housing. The county spent $1.21 million, but only $945,263 went to sub-recipients. The county awarded 10 awards, seven over $30,000, but those funds were not reported as required. The county misunderstood the guidance and thought it was exempt. “Failing to submit the required reports diminished the federal government’s ability to ensure accountability and transparency” in spending of $708,265, the audit says.
