Pullman-Moscow Regional Airport asks for yearly audits after critical report

Washington state auditors have issued a critical report on the Pullman-Moscow Regional Airport, saying bookkeepers used outdated accounting templates and misreported some figures by millions of dollars in recent years.

Airport and city officials say those errors have been corrected and could have been caught much sooner, but auditors didn’t look at the airport’s financial statements for nearly a decade.

After reviewing the airport’s books for the first time since 2010, the state auditor’s office issued its report last month, saying the airport “did not have effective internal controls in place to ensure accurate and reliable financial reporting.”

The office cited staff turnover and lack of training as causes for the errors, which included failing to report a short-term loan on the airport’s general ledger and recording more than $4.2 million in federal grant expenditures in the wrong fiscal year.

The airport has four full-time and four part-time employees, and its operating budget is usually less than the $2 million needed to trigger a full review of its year-end financial reports, said Tony Bean, the airport’s executive director.

Only in recent years has the budget exceeded that threshold. That’s due to a $154 million runway expansion and realignment project funded by various grants.

“The work was getting done and submitted to the state auditors for their review,” said Mike Urban, the city of Pullman’s finance director, who prepares the airport’s financial statements. “But because it didn’t meet a threshold for them, they never read the financials until all these dollars started rolling through.”

“If we don’t meet the threshold, they don’t look,” Bean said.

As a result, he added, “We were bumping along assuming that we were doing everything correctly.”

A separate accountability audit and a review of the airport’s passenger facility charges program, also released last month, found no additional problems.

Kathleen Cooper, a spokeswoman for the auditor’s office, said auditors started their in-depth review last year, after government grants for the runway project inflated the airport’s budget beyond the $2 million threshold for several consecutive years.

It took longer than usual to complete the financial audit because the airport’s statements weren’t prepared correctly, and because the coronavirus pandemic slowed the auditors’ work, Cooper said.

All of the airport’s revenue and spending has been accounted for, Bean said.

“I think everything’s corrected, and I don’t anticipate having any problems moving forward,” he said.

In an official response to the audit, Bean and Urban wrote that the Pullman-Moscow Regional Airport is “one of the most unique entities that the Washington state auditor has to perform work for by having partners in two cities, two counties, two states and two major universities.”

Bean said he has asked the auditor’s office to review the airport’s statements every year to avoid problems in the future.

“We’re happy to have the audit done this year, and we don’t anticipate having this challenge next year because we’re going to make sure that everybody’s looking at those statements,” he said.

Cooper said any local government or public agency in Washington can request services from the auditor’s office, which charges much less than a regular accounting firm.

“Any government can request a financial statement audit from us at any time, even if they don’t meet our thresholds,” she said. “If it’s something that they would like to engage our services on, we will entertain that.”