In a recent state audit report, Cosmopolis was cited as having multiple policy issues relating to its financial operations. The auditor’s office report looked at the city’s transactions and policies between 2014 and 2016. The audit didn’t cite any instances of questionable spending, but said the potential was there if problems aren’t fixed.
“The city lacked policies to sufficiently address key financial operations, such as general disbursements, payroll disbursements, advance travel payments and employee reimbursements,” according to the Washington State Auditor’s Office audit report, which was released Aug. 16.
The report also states that finance employees for the city could modify, delete or add records in the payroll system without there being “independent monitoring to compensate for this risk.”
Cosmopolis Mayor Frank Chestnut said the audit report only found issue with their policies, and added that the report found there was no “fraud, shady business or anything like that.”
Julie Pope, Cosmopolis’ clerk and treasurer, said 80 percent of the changes to their policies to fix these issues have already been made, and that all of the report’s concerns will be addressed by the end of the year.
“The council reviews every check that goes out the door, but now there are steps in between from the check-writing, until it gets to the council,” said Pope. “So there are two or three steps before it hits the council.”
In the audit report, it lists a variety of changes the city has made, such as having the city council make sure expenses are for a clear public purpose.
Some of the changes requested by the auditor are completely new, Pope said.
“In fact, one of them I contacted every city in Pacific and Grays Harbor counties trying to find an example of the policy, and none of the cities had it,” she said. “We’re kind of creating a new policy they’ve never required before, and now cities are copying the ones I’m drafting.”
Chestnut said some of the policies the audit found issue with were in place for many years.
“As an example, we had a clothing allowance,” said Chestnut. “The auditor would say, ‘OK, show us the authority for that.’ It’s one we’ve done for 50 years or whatever, and no one ever questioned it until now.”
City Administrator Darrin Raines noted that none of the financial staff who had been working during that 2014-2016 audit period are working for the city now. He added that the state auditor’s office has been helpful at getting the city up to speed with their new policies.
“It’s just better transparency to show anything that you’re doing, there’s an approval by a governing board, rather than just an employee or a public official making a decision and carrying it out,” said Raines. “They want a policy for a policy.”