Auditor report finds few issues in Washington

DES MOINES — An annual audit of the city of Washington’s financial statements from July 1, 2023 to June 30, 2024 turned up few red flags when it was published this month.

The 75-page report, created by accountant firm Gronewold Bell Kyhnn & Co. found no issues that violated conditions for federal funds, and no issues of non-compliance with government finance laws. Boilerplate in the report clarified that it was more likely to catch financial errors than fraud, as the latter could involve officials deliberately misleading reviewers.

The report did highlight a handful of issues raised in almost every small Southeast Iowa town’s annual financial review.

The first was a “significant deficiency in internal control over financial reporting.” The finding is a hallmark of rural local governments, and auditors said the city’s limited number of employees prevented it from implementing adequate “oversight of transactions and processes.”

In its formal response to the report, the city said it would “continue to review and monitor ways to improve segregation of duties.”

In another finding, auditors said the city exceeded its budgets for some funds involving public safety, culture and recreation, and general government functions. The reviewers said those budgets should have been amended before their disbursements exceeded planned levels.

The report clarified that accountants didn’t find any “questionable disbursements” during the reporting period, nor any municipal spending on travel expenses for spouses of city officials and employees.

Auditors also found zero instances of expenses omitted from city council minutes, no exceptions to proper procedures for the city’s tax increment financing districts, and no transactions categorized as “restricted donor activity.”

It did make note of $137,536 spent on construction services from DeLong Construction, which may have benefited Fire Chief Brendan DeLong, but auditors said the expenses didn’t represent a conflict of interest because the contractor was selected through competitive bidding.

The report said Washington’s total receipts for the reporting period totaled $10,734,753, gained largely through property taxes ($4.42 million), intergovernmental sources ($1.79 million) and local-option sales tax ($1.26 million). The city also took in $1.93 million of “miscellaneous revenues.”

Municipal disbursements, meanwhile, totaled $10,460,964. The plurality of that went to public safety expenses ($2.53 million) with other sizable chunks of change going to “general government” expenses ($1.96 million), capital projects ($1.4 million) culture and recreation ($1.72 million), debt service ($1.49 million) and public works ($1.24 million).

Comments: Kalen.McCain@southeastiowaunion.com