Issaquah begins work to address findings by the State Auditor’s Office

Issaquah council approves contract with a third party to address financial operations issues.

In response to a fourth consecutive year of audit findings, the city of Issaquah is pursuing third party financial consulting to address issues with the financial operations of the city.

The city council approved the administration to contract with the Government Finance Officers Association (GFOA) to do a multi-part examination and report on several aspects of the city’s operations and financial management systems in order to address the auditor’s findings, improve city work flow and clarify the city’s financial state.

As previously published by the Issaquah Reporter, the State Auditor’s Office recently relased an audit of the city’s 2017 financial statements resulting in findings related to internal controls and the ability to produce accurate financial statements in compliance with State and Federal law. The Auditor’s Office said it was unable to complete the audit. Those findings have been consistent in Issaquah’s audits for the past four years.

Finance director Beth Goldberg said that while there is no evidence of fraud or loss of funds, the weaknesses in the city operations need to be addressed.

“We feel that after four years of these finding — and frankly several attempts to address these challenges with internal resources — we feel we are at the point now where we can’t address these challenges internally,” Goldberg said.

In making the finding, the State Auditor’s Office noted that turnover in staff and challenges in the implementation of the financial management system were factors that caused the findings.

In March, GFOA staff interviewed city employees for eight days as part of their research into what issues need to be addressed. They identified obstacles such as incomplete or inconsistent financial policies, incomplete or poor training of the city’s financial management system, developing an underlying chart of accounts, organizational roles and structures, and other factors like difficulty in navigating a complicated payroll system.

Goldberg said the project is not the only element that needs to be completed to clean up financial operations. She is also working on a request for proposals for a consultant to conduct a historical look at the city’s current funds. The project would make sure the city has an accurate account of funds so they can implement fixes with a clean slate.

It is not a quick process, Goldberg said, adding that the work could take months to a year or two to complete.

The council was supportive of the work and unanimously voted to support the mayor to enter into the agreement with GFOA.

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