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2009, 03-31 Accountabiity Audit Report March 13, 2009 Washington State Auditor's Office Accountability Audit Report City of Spokane Valley Spokane County Report Date March 13, 2009 Report No. 1001044 , �°` °x,S>. �J'IIASHINGTON Issue Date E , a. March 31, 2009 = ` . -( )BRIAN SONNTAG STATE AUDITOR !f. Noy ti ya. , '''$fl f ti ",•oo Washington State Auditor Brian Sonntag March 31, 2009 Council City of Spokane Valley Spokane Valley, Washington Report on Accountability Please find attached our report on the City of Spokane Valley's accountability and compliance with state laws and regulations and its own policies and procedures. In addition to this work, we also audit the City's financial statements and compliance with federal laws and regulations. The results of that audit will be included in a separately issued audit report. Sincerely, 4.11'c71:76.10 „e_ BRIAN SONNTAG, CGFM STATE AUDITOR Insurance Building,P.O.Box 40021 •Olympia,Washington 98504-0021 •(360)902-0370•TDD Relay(800)833-6388 FAX(360)753-0646•http://www.sao.wa.gov Table of Contents City of Spokane Valley Spokane County March 13, 2009 Audit Summary 1 Description of the City 2 Audit Areas Examined 3 Audit Summary City of Spokane Valley Spokane County March 13, 2009 ABOUT THE AUDIT This report contains the results of our independent accountability audit of the City of Spokane Valley. We performed audit procedures to determine whether the City complied with state laws and regulations and its own policies and procedures. We also examined City management's accountability for public resources. Our work focused on specific areas that have potential for abuse and misuse of public resources. Areas examined during the audit were selected using financial transactions from January 1, 2007, through December 31, 2007. RESULTS In most areas, the City complied with state laws and regulations, its own policies and procedures, and internal controls were adequate to safeguard public assets. However, we noted certain issues that we communicated to City management. We appreciate the City's commitment to resolving these issues. RELATED REPORTS Our opinion on the City's financial statements and compliance with federal program requirements is provided in a separate report, which includes the City's financial statements. That report includes a finding regarding weaknesses in internal control over financial reporting. CLOSING REMARKS We thank City officials and personnel for their assistance and cooperation during the audit. Washington State Auditor's Office 1 Description of the City City of Spokane Valley Spokane County March 13, 2009 ABOUT THE CITY The City of Spokane Valley was incorporated on March 31, 2003, and serves approximately 88,900 citizens in Spokane County. The City operates under a council-manager form of government. Voters elect a seven-member City Council, which then appoints one member as Mayor and another member as Deputy Mayor. The City operates on an annual budget of approximately $91.1 million. Its 90 employees provide and administer services including police, through a contract with Spokane County, building inspection, street improvement and maintenance, parks and recreation, storm water management and general administration. The City owns and operates CenterPlace, an event facility, eleven City parks and three City pools. The City contracts with Spokane County for many of its services, including law enforcement, animal control and engineering. AUDIT HISTORY We audit the City annually. This marks the fifth audit for the City. The prior audit reported a finding related to financial reporting. No findings were reported in 2003, 2004 or 2005. ELECTED OFFICIALS These officials served during the audit period: Mayor Diana Wilhite Deputy Mayor Steve Taylor Council: Dick Denenny Mike DeVleming Bill Gothmann Rich Munson Gary Schimmels Note: Rich Munson and Dick Denenny were appointed Mayor and Deputy Mayor, respectively, in January 2008. Rose Dempsey replaced Mike DeVleming in January 2008. APPOINTED OFFICIALS City Manager Dave Mercier Finance Director Kenneth Thompson Washington State Auditor's Office 2 ADDRESS City Suite 106 11707 E. Sprague Ave. Spokane Valley, WA 99206 (509)921-1000 www.spokanevalley.org Washington State Auditor's Office 3 Audit Areas Examined City of Spokane Valley Spokane County March 13, 2009 In keeping with general auditing practices, we do not examine every portion of the City of Spokane Valley's financial activities during each audit. The areas examined were those representing the highest risk of noncompliance, misappropriation or misuse. Other areas are audited on a rotating basis over the course of several years. The following areas of the City were examined during this audit period: ACCOUNTABILITY We evaluated the City's accountability and compliance with laws, regulations, contracts and grant agreements in the following areas: • Cash receipting • Small and attractive assets such as • Financial activities in the Parks and computers Recreation Department • Contracts/agreements • Financial activities in the Building and • Restricted funds Planning Department • Budget compliance • Disbursements/expenditures • Compliance with grant requirements • Payroll/personnel • Conflict of interest/ethics laws • Procurement(bidding/prevailing wage) • Open public meetings/records laws FEDERAL PROGRAMS We evaluated internal controls and tested compliance with federal program requirements, as applicable, for the City's major federal program, which is listed in the Federal Summary section of the financial statement and single audit report. FINANCIAL AREAS Our opinion on the City's financial statements is provided in a separate report. That report includes the City's financial statements and other required financial information. We examined the financial activity and balances of the City including: • Cash and investments • Long-term debt • Capital assets • Financial condition • Receivables • Overall presentation of the financial • Revenue statements • Expenditures/expenses • Financial statement preparation • Payables Washington State Auditor's Office 4 ``j1 OF-s r *01rmiti. ABOUT THE STATE AUDITOR'S OFFICE r` ��t'j cr The State Auditor's Office is established in the state's Constitution and is part of the executive branch of state government. The State Auditor is elected by the citizens of Washington and serves four-year terms. Our mission is to work in cooperation with our audit clients and citizens as an advocate for government accountability. As an elected agency, the State Auditor's Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. The State Auditor's Office employees are located around the state to deliver our services effectively and efficiently. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments and fraud, whistleblower and citizen hotline investigations. The results of our work are widely distributed through a variety of reports, which are available on our Web site and through our free, electronic subscription service. We continue to refine our reporting efforts to ensure the results of our audits are useful and understandable. We take our role as partners in accountability seriously. We provide training and technical assistance to governments and have an extensive quality assurance program. State Auditor Brian Sonntag, CGFM Chief of Staff Ted Rutt Deputy Chief of Staff Doug Cochran Chief Policy Advisor Jerry Pugnetti Director of Audit Chuck Pfeil, CPA Director of Special Investigations Jim Brittain, CPA Director for Legal Affairs Jan Jutte, CPA, CGFM Director of Quality Assurance Ivan Dansereau Local Government Liaison Mike Murphy Communications Director Mindy Chambers Public Records Officer Mary Leider Main number (360) 902-0370 Toll-free Citizen Hotline (866) 902-3900 Web Site www.sao.wa.uov Subscription Service https://www.sao.wa.gov/applications/subscriptionservices/ (SAO FACTS.DOC-Rev.02/09)