Island Transit

Exit Conference
October 24,2OL4
Washington
State Auditor
Troy Kelley
Director of Local
Audit
Kelly Gollins
(360) 902-ooe1
Kellv.Collins
@sao.wa.qov
Deputy Director
Sadie Armijo
(360) eo2-0362
Sadie.Armiio
@sao.wa.gov
Audit Manager
Andy Asbjornsen
(360) 676-216s
Andrew.Asbiornsen
@sao.wa.qov
Audit Supervisor
Jenny Lofton
(360) 676-2165
Jennifer. Lofton
@sao.wa.gov
Audit Lead
Michelle Palmer
(360) 676-2165
Michelle.Palmer
@sao.wa.qov
www.sao.wa.qov
Twitter:
@WAStateAuditor
Meeting Agenda
The purpose of our exit conference is to share the results of our
independent audit and to provide a forum for open discussion. We are
pleased to review our reports and discuss other topics as listed below
with you.
.
Federal grant compliance audit report
o
Financial statement audit report and other required communications
.
Accountability audit report
.
Status of prior audit recommendations
.
Report publication
.
Your next scheduled audit
o
Qustomer
service survey
Preliminary audit results and recommendations were shared in detail
with Transit management and personnel as they were developed
during the audit. We would like to thank staff for their cooperation and
timely response to our requests during the audit.
We take seriously our responsibility to hold state and local
governments accountable for the use of public resources. We believe it
is critical to citizens and the mission of the Transit that we work
together as partners in accountability to prevent problems and
constructively resolve issues. As such, we encourage your comments
and questions.
Federal Grant Compliance Audit
Report
Our report discloses the results of our audit of compliance and internal controls over federal
grant programs. It includes the following finding.
o
The Transit's internal controls are inadequate to ensure compliance with the
requirements of the State of Good Repair Grants Program.
Financial Statement Audit
Report
Our draft financial statement report includes our opinion on the financial statements. It also
includes our report on internal control over financial reporting and on noncompliance and other
matters as required by Government Auditing Standards. lt includes the following finding.
r
The Transit's financial condition has impacted current service levels and puts it at
risk of not being able to meet financial obligations.
An unmodified opinion will be issued on the financial statements, which means that we believe
they are presented fairly, in all material respects.
ln relation to our report, we would like to bring to your attention:
.
There were no uncorrected misstatements in the audited financial statements.
o
There were no material misstatements in the financial statements corrected by management
during the audit.
r
No significant deficiencies in internal control over financial reporting were identified.
.
No instances of noncompliance were identified that could have a direct and material effect
on the determination of financial statement amounts.
Accountability Audit
Report
Our draft accountability report summarizes the results of our risk-based audit work related to
safeguarding of public resources and legal compliance. The report includes the following
finding:
o
The Transit does not have adequate oversight of payroll
to safeguard public resources.
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Recommendations not included in the Audit Reports
Exit Items
We have provided exit recommendations for management's consideration. They are not
referenced in the audit report.
Status of Prior Audit Recommendations
Concluding Comments
Report Publication
Audit reports are published on our website and distributed via e-mail in an electronic .pdf file.
We also offer a subscription service that allows you to be notified by email when audit reports
are released or posted to our website. You can sign up for this convenient service at:
https : //po rta l. sa o. wa.
q
ov/s ao
po
rta I/Loq i n. as
px
Your Next Scheduled Audit
Your next audit is scheduled to be conducted in 2015 and will cover the following general areas:
Accountability for Public Resources
Financial Statement
The estimated cost for the next audit based on the current billing rate is
$24,000
plus travel
expenses. This preliminary estimate is provided as a budgeting tool and not a guarantee of final
cost.
lf expenditures of federal awards are $500,000 or more in any fiscal year, notify our Office so
we can schedule your audit to meet federal single audit requirements. Federal awards can
include grants, loans, and non-cash assistance such as equipment and supplies.
a
a
Customer Service Survey
An invitation to complete a customer service
Executive Director. Your feedback is important
improve our audit process.
survey will be emailed to Bob Clay, Acting
to our commitment to continually develop and
Please don't hesitate to contact our Office throughout the year when you have questions..,'Our
website also offers many resources, including a client HelpDesk for your auditing and
accounting questions.
This document and any attachments are intended for the information and use of management and the governing
body. However, this document is a matter of public record and its distribution is not limited.
The Transit did not adequately monitor take home vehicles and fuel
card use to ensure they are only used for official purposes.
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Island Transit
Exit Conference
October 24,2014
Exit Recommendations
Vehicle use monitoring
Our prior audit finding identified the Transit did not adequately monitor take home vehicles and
fuel use. The Transit took steps to improve tracking and reporting over vehicle use; however, is
still working on increasing controls to ensure actual mileage is compared to vehicle and fuel use.
We recommend the Transit strengthen controls to ensure actual mileage is compared with vehicle
and fuel use.
Travel and meal policies
The Transit's travel policy does not define when an employee is in travel status or type of eligible
costs while in travel status. Without a defined travel policy, the Transit does not have a
consistent method to identif,z when an employee is in travel status and what expenses will be paid
or reimbursed. Also, the Transit does not have a policy identifzing when meals are allowable for
a public purpose.
We recommend the Transit establish a travel policy that defines when an employee is in travel
status and eligible costs while in travel. We also recommend the Transit establish a meals with
meetings policy that identifies when meals are for an appropriate public purpose.
Financial statement errors
Our audit identified immaterial errors in the financial statements, which the Transit corrected,
including:
o
Schedule of Expenditures of Federal Awards underreported by $59,764
o
Missing long term debt note disclosure
o
Inaccurate implementation of GASB 63 and 65
We recommend the Transit establish and follow procedures to ensure an appropriate review of the
financial statements and notes to the financial statements is performed by a person knowledgeable
of reporting requirements.
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