2018, 12-17 Special MINUTES
City of Spokane Valley
Special Council Meeting
Monday, December 17,2018
2:30 p.m.
City of Spokane Valley City Hall,211d Floor Conference Room,N212
10210 E. Sprague Ave., Spokane Valley, Washington
Attendance:
Spokane Valley Council Staff
Mayor Higgins Mark Calhoun, City Manager
Deputy Mayor Haley John Hohman, Deputy City Manager
Councilmember Thompson Cary Driskell, City Attorney
Councilmember Woodard Erik Lamb, Deputy City Attorney
Mike Stone, Parks &Rec Director
Absent: John Whitehead, Human Resources Mgr
Councilrnember Peetz Dan Duffy, Accounting Manager
Councilmember Wick Karla White, Accounting Technician
Councilmember Wood Jon Lakey, Accountant, budget Analyst
Christine Bainbridge, City Clerk
Others in Attendance:
State Auditors: Weston Fink, Assistant Audit Manager;Nick Howard, Audit Lead
Approximately two members from the public
Mayor Higgins called the meeting to order at 2:30 p.m. City Clerk Bainbridge called the roll. All
Councilmembers were present except Councilmembers Peetz, Wick and Wood. It was moved by
Councihnember Thompson, seconded and unanimously agreed to excuse those absent Councilmembers.
City Manager Calhoun explained he is stepping in as Finance Director Taylor is out ill today;he mentioned
that this is the last touch with the state auditor as part of the 2017 audit,and today we will review the results
of the Accountability Audit for 2017.
Mr. Fink introduced Mr. Howard, who then went over the material contained in the Exit Conference
including page 1 of what they publish, the audit highlights, recommendations not included in the audit,
which items he said are considered `housekeeping.' Mr. Howard also mentioned the audit cost, as shown
on page two of the report.Mr.Fink went over the material on page 2 and 3,and noted this is a clean opinion,
with no findings, and no management letter; that page 3 includes a list of the areas examined during the
audit, and page 4 explains where those reports can be found on the state auditor's webpage.
There were no questions and Mr. Calhoun extended thanks to Finance Director Taylor and her department,
and thanks to the auditors.
It was moved by Deputy Mayor Haley, seconded and unanimously agreed to adjourn. The meeting
adjourned at 2:43 p.m.
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L.R. Higgins, 1 .r
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Christine Bainbridge, City Clerk
Special Council Meeting, State Auditors: 12/17/2018 Page 1 of 1
Approved by Council: 01/08/2019
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`Lt'`''°'`��'�°����'�� Office of the Washington State Auditor
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Exit Conference: City of Spokane Valley
The Office of the Washington State Auditor's vision is increased trust in government. Our mission is to provide
citizens with independence and transparent examinations of how state and local governments use public funds,
and develop strategies that make government more efficient and effective.
The purpose of this meeting is to share the results of your audit and our draft reporting. We value and appreciate
your participation.
Audit Reports
We will publish the following reports:
• Accountability audit for January 1, 2017 through December 31, 2017 - see draft report,
Audit Highlights
• City personnel were easy to work with, which ensured that the audit progressed smoothly.
• Chelsie Taylor,Dan Duffey, and the Finance Department worked hard to ensure audit staff had
everything they needed to perform their job duties,which creates a great working relationship between
the City and our Office.
Recommendations not included in the Audit Reports
Exit Items
We have provided exit recommendations for management's consideration.Exit items address control deficiencies
or non-compliance with laws or regulation that have an insignificant or immaterial effect on the entity, or errors
with an immaterial effect on the financial statements. Exit items are not referenced in the audit report.
Finalizing Your Audit
Report Publication
Audit reports are published on our website and distributed via e-mail in an electronic .pdf file. We also offer a
subscription service that allows you to be notified by email when audit reports are released or posted to our
website. You can sign up for this convenient service at: https://portal.sao.wa.gov/saoportal/Login.aspx
Management Representation Letter
We have included a copy of representations requested of City management.
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Audit Cost
At the entrance conference, we estimated the cost of the accountability audit to be $29,000 plus travel costs, and
actual audit costs will approximate that amount.
Your Next Scheduled Audit
Your next audit is scheduled to be conducted in 2019 and will cover the following general areas:
• Accountability for Public Resources
• Financial Statement
• Federal Programs
The estimated cost in total for the next audit based on current rates is $86,000 plus travel expenses. This
preliminary estimate is provided as a budgeting tool and not a guarantee of final cost.
Working Together to Improve Government
Audit Survey
When your report is released you will receive an audit survey from us. We value your opinions on our audit
services and hope you provide feedback.
Local Government Support Team
This team provides support services to local governments through technical assistance, comparative statistics,
training, and tools to help prevent and detect a loss of public funds. Our website and client portal offers many
resources, including a client Help Desk that answers auditing and accounting questions. Additionally this team
assists with the online filing of your financial statements.
Performance Center
The Performance Center is a resource for local governments that need to solve problems, reduce costs, and
improve the value of their services to citizens. The Center offers training and tools to help local governments
improve performance and effectiveness.
Questions?
Please contact us with any questions about information in this document or related audit reports.
Kelly Collins, CPA, Director of Local Audit, (360) 902-0091,Kellv.Collinst''isao.wa.gov
Brandi Pritchard, CFE, Assistant Director of Local Audit, (360) 489-4591, Sadie.ArmiioAsao.wa.gov
Brad White, CPA, Program/Audit Manager, (509) 329-3701 ext. 127 or Bradlev.D.White(a,sao.wa.gov
Weston Fink, CPA, Assistant Audit Manager / Audit Lead, (509) 329-3701 ext. 120 or
Weston.fink r( sao.wa.gov
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AUDIT RESULTS
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This report describes the overall results and conclusions for the areas we examined. In those
selected areas, City operations complied with applicable state laws, regulations, and its own
policies, and provided adequate controls over the safeguarding of public resources.
About the audit
This report contains the results of our independent accountability audit of the City of Spokane
411 Valley from January 1, 2017 through December 31,2017.
Management is responsible for ensuring compliance and adequate safeguarding of public resources
from fraud, loss or abuse. This includes the design, implementation and maintenance of internal
controls relevant to these objectives.
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This audit was conducted under the authority of RCW 93.09.260,which requires the Office of the
u0i State Auditor to examine the financial affairs of all local governments. Our audit involved
performing procedures to obtain evidence about the City's uses of public resources, compliance
Po, with state laws and regulations and its own policies and procedures,and internal controls over such
matters.
In keeping with general auditing practices, we do not examine every transaction, activity or area.
Instead, based on our risk assessment for the year ended December 31, 2017, the areas examined
were those representing the highest risk of fraud, loss, abuse, or noncompliance. The following
areas were examined during this audit period:
• Small and attractive assets—inventory and asset tracking
• Payroll—overtime approvals
• Self-insurance—unemployment compensation
• Financial condition and fiscal sustainability
W • Cash receipting, franchise fees, and donations receipted by the City
• State grants—review of reported expenditures and compliance with grant requirements
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a • Travel reimbursements—compliance with City policy, tested reimbursements for employees
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1" RELATED REPORTS
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Financial
Our opinion on the City's financial statements and compliance with federal grant program
requirements is provided in a separate report,which includes the City's financial statements, That
report is available on our website, http:l/portal.sao.wa.gov/ReportSearch.
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IN Federal grant programs
a We evaluated internal controls and tested compliance with the federal program requirements, as
applicable, for the City's major federal program, which is listed in the Schedule of Findings and
Questioned Costs section of the separate financial statement and single audit report, That report
is available on our website,http:l/portaLsao.wa.gov/ReportSearch.
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INFORMATION ABOUT THE CITY
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0 The City of Spokane Valley was incorporated on March 31, 2003, and currently serves
approximately 95,000 Spokane County residents. It provides an array of services including
building inspection, street improvement and maintenance, parks and recreation, stormwater
management, solid waste disposal, and general administrative services. The City also owns and
operates CenterPlace, an event facility, 11 parks and three pools. For many of its services the City
contracts with Spokane County including law enforcement, prosecution, public defense, District
. Court, emergency management and animal control.
An elected, seven-member Council governs the City under a Council-Manager form of
government. The Council appoints one member to serve as Mayor and another member to serve
0 as Deputy Mayor. In addition, the Council appoints a City Manager to oversee the City's daily
operations as well as its 89.25 FTEs. For fiscal year 2017, the City operated on an annual budget
of approximately $77,36 million.
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Contact information related to this report
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Address: City of Spokane Valley
• 10210 E. Sprague Avenue
Spokane Valley City Hall
Spokane Valley, WA 99206
Contact: Chelsie Taylor,Finance Director
Telephone: 509-720-5040
Website: www.spokanevalley.org
Information current as of report publish date.
Audit history
You ,can find current and past audit reports for the City of Spokane Valley at
http://portal.sao.wa.gov/ReportSearch.
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FINANCE DEPARTMENT
Sokane
Clielsle Taylor,CPA,Finance Director
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valley 10210 E Sprague Avenue♦ Spokane Valley WA 99206
Phone: (509)720-5000 ♦ Fax: (509)720-5075 ♦ www.spokanevalley.org
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December 5, 2018
Spokane Valley City Council.
City of Spokane Valley
10210 E Sprague Ave
Spokane, WA 99206
To the Washington State Auditor's Office:
We are providing this letter in connection with your audit of City of Spokane Valley for the
period from January 1,2017 through December 31,2017. Representations are in relation to •
matters existing during or subsequent to the audit period up to the date of this letter.
Certain representations in this letter are described as being limited to matters that are significant
or material. Information is considered significant or material if it is probable that it would
change or influence the judgment of a reasonable person.
We confirm, to the best of our knowledge and belief, having made appropriate inquires to be able
to provide our representations,the following representations made to you during your audit.If
we subsequently discover information that would change our representations related to this
period, we will notify you in a timely manner.
General Representations:
1. We have provided you with unrestricted access to people you wished to speak with and
made available requested and relevant information of which we are aware, including:
a. Financial records and related data.
b. Minutes of the meetings of the governing body or summaries of actions of recent
meetings for which minutes have not yet been prepared.
c. Other internal or external audits, examinations, investigations or studies that might
concern the objectives of the audit and the corrective action taken to address
significant findings and recommendations.
d. Communications from regulatory agencies, government representatives or others
concerning possible material noncompliance,deficiencies in internal control or other
• matters that might concern the objectives of the audit.
e. Related party relationships and transactions.
f. Results of our internal assessment of business risks and risks related to financial
reporting, compliance and fraud.
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2. We acknowledge our responsibility for compliance with requirements related to
confidentiality of certain information, such as HIPAA requirements,and have notified you
whenever records or data containing information subject to any confidentiality
requirements were made available.
3. We acknowledge our responsibility for compliance with applicable laws, regulations,
contracts and grant agreements.
4. We have identified and disclosed all laws,regulations,contracts and grant agreements that
could have a direct and material effect on the determination of financial statement amounts,
including legal and contractual provisions for reporting specific activities in separate funds.
S. We have complied with all material aspects of laws, regulations, contracts and grant
agreements.
6. We acknowledge our responsibility for establishing and maintaining effective internal
controls over compliance with applicable laws and regulations and safeguarding of public
resources,including controls to prevent and detect fraud.
7. We have established adequate procedures and controls to safeguard public resources and
ensure compliance with applicable Iaws and regulations.
8. We have no knowledge of any fraud, allegations of fraud or suspected fraud involving
management, employees or others.
9. In accordance with RCW 43.09.200, all material events and transactions have been
properly recorded in the financial records.
it.}
Mark Calhoun Chelsie Taylor
City Manager Finance Director
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