Latest news with #Kirkelie
Yahoo
27-05-2025
- Business
- Yahoo
Puyallup fails to report $2.1M in federal COVID grants, admits mistake
This story was originally published on According to an audit, the City of Puyallup failed to report $2.1 million in federal COVID-19 relief grants it received in 2023. The city also, according to the audit, did not ensure that the ending cash balance reported on its bank statements was accurate. The audit concluded the city had 'significant deficiencies' in its financial reporting. The city also recently installed new finance software, which has reportedly confused the finance department about the process for properly reporting the funds. Wendy Choy, assistant director with the auditor's office, said that the office conducts an annual audit for the City of Puyallup, and this report reviewed the city's financial records from Jan. 1, 2023, to Dec. 31, 2023, according to The News Tribune. Choy told the outlet that it 'was still tracking the $2.1 million they received in COVID-19 funds, but neglected to include it in the report.' Steve Kirkelie, the City of Puyallup's city manager, told The News Tribune that it's looking at the report as a learning opportunity. 'We completely recognize that the auditor serves a very important function in this state and to our city,' Kirkelie said. 'We take it very seriously, and we're working with the auditor.' The city's financial analyst resigned in April 2024, and the finance manager retired in September 2024, according to The News Tribune. By the time the city began preparing its financial statements for the audit, the city had two new staff members leading the process. Kirkelie said the city noticed the mistake, but by the time they discovered it, it was too late to submit the correct information into the audit. Eric Johnson, the city's spokesperson, said that the city hired one more person to its finance department after the audit, bringing the department's total staff members to three, according to The News Tribune. In the report, the auditor recommended that the city revamp its procedures to ensure its financial reporting is accurate moving forward. Kirkelie and Johnson told The News Tribune, the city has planned to fix the internal process that would allow multiple people to look at each report before the city submits it to the auditor's office, increase training for new staff members, and provide a refresher class for current members on federal contracting and federal expenditures. The next annual review of the city is scheduled for October. Follow Jason Sutichon on X. Send news tips here
Yahoo
27-05-2025
- Business
- Yahoo
Puyallup's finance reports had ‘significant deficiencies,' including $2M grants
A new report from the Washington State Auditor's Office says the City of Puyallup didn't properly report millions of dollars it received in federal funds. According to the 2023 report– which the auditor released earlier this month on May 15 – the city had 'significant deficiencies' in its financial reporting. The report says the city didn't: Report $2.1 million in federal COVID-19 relief grants it received in 2023. Include 'all financial activity in the accounting systems and [ensure] that the financial statements submitted for audit were accurate, complete and agreed to underlying accounting records.' Ensure the ending cash it reported on its bank statements was accurate. Wendy Choy, an assistant director with the auditor's office, told The News Tribune the office audits the City of Puyallup once a year. This report reviewed the city's financial records from Jan. 1, 2023 to Dec. 31, 2023. 'Part of the city's annual report package includes a schedule for federal awards,' Choy said. 'It's a schedule that lists all the federal expenditures that the city spent — in our case, during the audit period during 2023. In that schedule, you're supposed to list all your federal expenditures by program.' Choy said the city filed the report they were supposed to and was still tracking the $2.1 million they received in COVID-19 funds, but neglected to include it in the report. 'They filed [the report], it just didn't include this $2.1 million grant,' Choy said. 'It's not a violation in the sense that the money is not accounted for.' The News Tribune spoke to Puyallup's city manager, Steve Kirkelie, and the city's spokesperson, Eric Johnson. Kirkelie and Johnson both said the city is looking at this report as a learning opportunity. 'We completely recognize that the auditor serves a very important function in this state and to our city,' Kirkelie said. 'We take it very seriously and we're working with the auditor.' Both men said the mistakes happened due to new staffing. The city's financial analyst resigned in April 2024 and its finance manager retired in September 2024. When the city started preparing its financial statements for the audit that October, there were two new staff members overseeing the process. '[The retired staff], they built up so much knowledge — and when that person retires, they retire their brain with them,' Kirkelie said. 'You want to make sure you're capturing their institutional knowledge.' Kirkelie said the city noticed the mistake, but at that point, it was too late to submit the correct information into the audit. 'We recognize that and that is an error on our part and we are working [to make sure] that doesn't happen again,' Kirkelie said. Kirkelie said the city's finance department has 14 full-time staff members, with about half of those people working on these reports. The finance director, finance manager and financial analyst are the three people most involved in putting the reports together. Both men confirmed that no positions have been cut from the city's finance department these past few years. When The News Tribune asked them how the size of their finance department compares to other Western Washington cities of similar size, they said they did not know. Johnson said that, after the audit, the city hired one more person to its finance department – meaning the department now has three new staff members. On top of the new staffing, the city had also recently transitioned to new finance software, which led to more confusion on how to properly report the funds. 'Most grants that we receive from the state and federal government are reimbursement-based,' Johnson said. 'In this case, we were actually issued the money up front and then we would have to document how we were spending them … [it's not] what we were used to at the federal or state level.' Kirkelie said that, while they are not expecting any of their finance staff to leave any time soon, it will inevitably happen again someday — and this experience allows the city to be on guard so that something like this doesn't happen again. '[We can say], 'OK, you're leaving, let's go through all of these and make sure our i's are dotted and our t's are crossed,' Kirkelie said. Johnson said the $2.1 million that didn't get reported is part of the $14 million the city got in American Rescue Plan funds, which the city uses to support economic development for local businesses. Kirkelie pointed at Puyallup's parklets program as an example. Kirkelie said the city's total biennial budget is $312 million for 2025 and 2026. According to the auditor's report, a city has to undergo a federal grant compliance audit if it spent more than $750,000 in federal funds each year. When the city failed to report the $2.1 million, the paperwork made it look like the city didn't have to go through a federal audit when it did. 'A federal grant compliance audit is where we come in, in this case, to review certain federal programs for the City of Puyallup to make sure they can meet federal regulations,' Choy said. Choy also said the city submitted bank statements that contradicted each other. She said many cities have statements that don't line up, but they submit additional documents that explain why. 'Typically there will be a difference and that difference is based on reconciling,' Choy said. 'For example, your Dec. 31 bank balance may not also take into consideration checks that you've already sent out in the mail, the other party hasn't cashed it out yet.' The issue in the City of Puyallup's case, Choy said, is that they couldn't find documents explaining why their statements didn't align. 'In this case, the city was unable to provide those documentations for the reconciling items due to the [staff] turnover they've experienced,' Choy said. In the report, the auditor recommended the city revamp its procedures to ensure their financial reporting is accurate from here on out. Kirkelie and Johnson said that is what the city intends to do. 'We could have done a better job of, really, redundancy and double-checking our work and the auditor pointed it out for us,' Johnson said. When The News Tribune asked Kirkelie and Johnson what the city's plan was to prevent this situation from happening again, they said the plan consists of: Changing internal processes so that multiple people look at each report before the city submits it to the auditor's office. Increasing training for its new staff members, including a refresher class from the city's legal department this summer on federal contracting and federal expenditures. 'Part of what we're doing here now is making sure that there is clear protocols in place that, when somebody submits documents to the auditor or in the day-to-day reconciliation of our financial statements, that there is a double check there — maybe even a triple check,' Johnson said. Kirkelie reiterated that the mistakes were about documenting funds properly, not losing funds entirely. 'We're not missing $2 million,' Kirkelie said. 'That didn't just disappear — the funds are there, [the mistakes just happened] when we went to reconcile the general statements.' Kirkelie said the city is in good financial health. He said the city had a credit agency review its bond rating as part of its quest to build a new police station at 1015 39th Ave. SE. The city's bond rating is a double A rating — the equivalent of a 700 credit score for an individual. 'That rating really, essentially, says the City of Puyallup is healthy from a financial standpoint and is at low risk,' Johnson added. The auditor is set to do its next annual review of the city in October.
