Audit faults Millwood books

Millwood recently received an unsatisfactory report from the Washington State Auditor’s Office in the wake of the sudden death of longtime clerk and treasurer Eva Colomb in September 2009.

No one on staff was prepared to step into her shoes and as a result some things didn’t get done properly, said Mayor Dan Mork. “We had a little transition there and it was rough,” he said.

The report summary said there were multiple errors in the town’s financial information. Some year-end expenses weren’t accounted for correctly and outstanding payments or debits weren’t reconciled correctly. As a result the town’s financial statement understated its beginning cash and investments by about $140,000 and understated its ending cash and investments by at least $158,000, according to the report.

The city staff “did not have adequate experience with financial statement requirements” and “did not have the technical knowledge and experience needed to prepare financial statements,” the report said.

All the errors have since been corrected, the report notes. Mork said the city has made several changes. Part of the problem concerned the December warrants, or bills. They were written down, but didn’t appear on the debit side of the books. The town should have recorded them as if they had already been cashed, Mork said.

Several months after Colomb died the deputy treasurer took over Colomb’s treasurer duties and the city planner was promoted to city clerk. The auditor’s report faulted the city for not giving them enough training in their new duties. The city has been giving them every type of training it can in recent months, Mork said.

He had nothing but praise for the new treasurer, Debbie Matkin. “It’s a small town, but there’s still a lot of work to do that other, larger cities have to do,” he said. “It’s a big job and she’s doing a great job.”

Part of the problem was that the city was still firmly in the 20th century, using a manual recording system. If a citizen came in with a payment, they would receive a receipt. Someone would then manually write down the payment in a register, then enter the information into a database. “There were three different points where it could go wrong,” Mork said. “We never had any issues with non-balancing funds. The system is not the recommended one we want to use now.”

The city has recently purchased accounting software and is training staff to use it. After the beginning of the year staff will be able to enter information directly into the computer so accounts will be accurate up to the minute. It will also make billing much easier.

Mork said he’s glad the audit pointed out what issues the city needed to do fix. “It was a very good thing for us to have that,” he said. “We’re in much better shape.”