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Audit finds oversight problems

City improperly documented some spending, state says

State auditors have found “significant deficiencies” in the city of Spokane’s oversight of federal money, according to a report released this week.

In the audit, the state questioned more than $350,000 of grant money the city used to pay for staff and administrative time within the Spokane Area Workforce Development Council because employee time was documented incorrectly.

Mindy Chambers, spokeswoman for the state auditor’s office, said the deficiencies identified appear to be “systematic problems,” and not ones that were purposeful. Audits of federal grants are required for any local government receiving at least $500,000 in federal money, she said, adding that the reviews often reveal errors because of the numerous rules and laws attached with using federal money.

City Councilman Bob Apple said that at a recent meeting, state auditors informed City Council members that “they now believe all the problems have been corrected.”

Chambers said the questioning of the expenditures means the city will have to justify how the money was used.

Mark Mattke, work force strategy and planning director, said justifying the expenditures won’t be a problem. He said that the council has calculated staff time the same way for years, possibly since the development council was created in the 1970s, and that the state had never raised concerns until the recent audit.

The finding was “somewhat of a surprise, but not something we can’t fix and bring it into compliance,” Mattke said.

Spokane Chief Financial Officer Gavin Cooley said that the council had been documenting employee time but that the city will start providing more specifics.

The Spokane Area Workforce Development Council uses federal money for job training and other programs that aim to help people find work.

In a separate finding, the report says the city should not have earned interest on federal grant money overseen by the city’s Community Development Department. As a result, the city turned over earnings, $5,764, to the U.S. Department of Housing and Urban Development.

Cooley said Spokane’s new centralized accounting system will assist the city’s financial oversight. The change is one of the few recommendations implemented by city leaders from the controversial 2007 city efficiency study from the Matrix Consulting Group.

Under the switch, accountants report to the city’s finance department – not to the leaders of each department.

“We’re exerting a much higher level of control,” Cooley said.