State wraps up audit of ’09 records

Problems that included missing credit card receipts and missing credit card statements seem to be behind Spokane Valley as the state auditor’s office gave the city a clean bill of health in a recent audit that examined 2009 records.

“We don’t have any audit findings this year,” said audit manager Debbie Pennick. She spoke during an audit exit conference held Wednesday that was attended by City Council members and city officials.

However, the city is dealing with criminal charges filed against a former employee accused of stealing more than $6,500 from the city before she quit in June 2009. According to a “management letter” from the auditor’s office, the employee took cash and checks from deposits in 2008 and 2009 by destroying receipting records and pocketing the money.

“The city did notify our office immediately,” said assistant audit manager Alisha Shaw.

Destroying paperwork circumvented the controls in place, which the city has since updated, Pennick said. “The investigation performed by the city was very thorough.”

Two charges of first-degree theft and one charge of second-degree theft, all felonies, have been filed against former accounting technician Lisa A. Combs. According to court documents, the city discovered the thefts in August 2009 after a citizen called to ask why a check they had written to the city had not cleared their bank account yet.

An investigation revealed the missing money and several other checks that had never been deposited in the city’s accounts. A trial is scheduled for February 2011. City finance director Ken Thompson declined to comment on the case.

Auditors did note some errors in the way some funds were classified in financial statements. Some of the record requirements are very exacting, Pennick said. “It doesn’t have to do with the mishandling or mismanagement or funds,” she said. “This is only about the presentation and where the information was located in the financial statement.”

Shaw said the city must also be careful to apply interest and late fees to gambling tax collections that are not paid on time. “We tested eight establishments and of those, seven were not making their payments on time,” she said.

The auditor’s office received a complaint that City Council members were making decisions at meetings that were not open to the public. “We could not substantiate that was the case,” Shaw said.

Shaw said auditors read articles in The Spokesman-Review detailing daily coffee gatherings attended by some council members and other people. Some council members were also interviewed. “We have evidence that they met” but no evidence that improper discussions were taking place, Pennick said.

“There’s no documentation of what was discussed at those meetings,” Shaw said.

Auditors made a recommendation that the city should “be aware of the public’s perception that council members may be making decisions related to city business at meetings that do not involve the public’s input.”