Audit dings La Conner Library, faults compliance

Ken Stern | May 15, 20240

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COMPLETING THE LIBRARY A PROCESS STILL UNDERWAY – The La Conner Swinomish Library opened in October 2022. Here the finishing touches were being put on the building's sign. A 2024 state auditor's report found the library has to create, improve or follow processes and procedures to be in compliance with state law and its own policies.

A state accountability audit of the La Conner Swinomish Library for the years 2020-2022 found serious faults in some of the district's practices and procedures.

"District operations did not comply, in all material respects, with applicable state laws, regulations, or its own policies. Additionally, the District did not provide adequate controls over safeguarding of public resources in most of the areas we examined," the Washington State Auditor's Office summarized in its report.

The Auditor's Office conducted the audit during February and March and published its report April 29.

Auditors reported four findings, their highest level of reporting. They found the district:

-- Did not comply with the Open Public Meeting Act's requirements for minutes, agendas and executive sessions.

-- Had inadequate internal controls over annual report filing to ensure submission of accurate and complete reports to the Office of the Washington State Auditor by the statutory deadline.

-- Lacked adequate internal controls to ensure disbursements were properly supported, approved and allowable.

-- Did not have adequate internal controls or policies to ensure compliance with state procurement requirements.

Auditors conducted a more extensive accountability audit after beginning an assessment audit, a limited review of finances.

Staff made the shift once auditors found the district "had not fully accounted for some of its financial activity when filing its legally required information with our Office," Kathleen Cooper, director of communications, wrote in an email. The "broader scope" accountability audit "assesses whether public funds and assets are protected and accounted for, and governments are following applicable laws, regulations and their own policies," Cooper stated.

Inadequate financial management

State procurement requirements: During the construction of the new library building, the district did not have a policy for competitive bidding. State law requires this for public works projects. The library district did not ensure that the construction bid process followed state law. Compliance records do not exist.

Internal financial controls: "The District lacked written policies for internal controls over accounts payable disbursements and theft-sensitive assets," the audit found. There were not adequate procedures for approving or tracking transactions. Controls for "theft-sensitive assets" were inadequate. Gaming computer equipment valued at $1,529 could not be located.

Policies and procedures

Auditors reported the board of trustees did not follow the state's Open Public Meetings Act in five ways, from not retaining meeting minutes – proof that required meetings were held – to inadequate documentation of executive session, to prior posting of online meeting agendas.

The district's annual reports to the state auditor were incomplete, without including the capital fund construction budget of revenues and expenditures. The schedule of liabilities did not include all bond activity.

Full auditor's report

Audit reports are formulaic, with each finding summarizing the background and condition, the cause and effect, recommendations and the district's response. Auditors found the "cause of condition" in almost ever case that district officials – the board and staff –were unaware, lacked experience, lacked written polices, had inadequate procedures and "experienced turnover in the library director position."

For three of the findings, the auditors made bullet-pointed recommendations, including training, following OPMA, and establishing and implementing financial policies and controls. The report also recommends establishing necessary financial controls to ensure accurate and complete financial reports are submitted.

The district provided bullet-pointed responses to each finding. Many provide completion dates, ranging from May through August.

Cooper, like the report's auditors, noted the district's responses as cooperative and open and their efforts to address the concerns and improve management.

The library's response

Board President Susan Macek and Library Director Jean Markert responded to Weekly News questions Monday. Each expressed their willing commitment to learn and improve library operations and internal controls and follow state law and regulations and library policies. They "welcomed the opportunity to improve accountability and transparency for the library's operations as a result of this audit," they wrote.

The report offers a start. Macek said, "It is not over and done. It is a relevant topic. Our expectation is to follow every single aspect to the findings."

The two noted no funds are unaccounted for.

"I am not making excuses, Macek said, but (place) it in the context of what was going on: The building project was a humongous project."

Additional audits

The report states auditors "will review the status of the District's corrective action during our next audit." Cooper wrote her office has "increased the pace of auditing at the District – the next one will focus on two years of activity (2023 and 2024) rather than three years."

The Auditor's Office is a reporting agency, not a regulatory or enforcement agency. "We provide transparency and information for the public to make more informed decisions about its governance," Cooper wrote.

Four previous assessment audits, covering years back to 2012, reported the district was "in substantial compliance" with state laws and regulations and the district's internal policies and procedures.

The district's official name is the La Conner Rural Partial County Library District. It shares the La Conner School District's boundary and has 4,700 residents. It is governed by an appointed five-member board of trustees. Property taxes primarily fund the district. In 2020-2022, its operating revenues were between $281,000 and $345,000. The new building construction expenditures were $3.6 million through 2022.

All library audit reports are available at the auditor's website, sao.wa.gov/reports-data/audit-reports.

La Conner Regional Library District audit timeline

2019

January: State Auditor's Office issues clean assessment report for 2016-2017

July: Full funding of library construction budget

November: Joy Neal, library director for 15 years, is asked to retire

December: Neal retires; Susan Macek, La Conner Library Foundation director, named interim library director

2020

March: Coronavirus pandemic shuts down society; Jared Fair, managing librarian for Yakima Valley Libraries, is hired as library director

April: Fair assumes role as La Conner Library director

2021

August: State Auditor's Office issues clean assessment report for 2018-2019