{"database": "mytown-research", "table": "audit_findings", "rows": [[42, "wa-sao", "1021358", "2016-001", 287, "WA", "City of Sunnyside", "City/Town", "0846", "5368750", "geoid_place", "Washington State Auditor's Office", "Accountability audit \u2014 City of Sunnyside", "Accountability", 2016, "2016-01-01", "2016-12-31", "2018-05-21", "internal_controls", null, null, null, "The City did not have adequate oversight of payroll operations to safeguard public resources", "Background \nThe City paid about $10.7 million in payroll during 2016. During three prior audits \ndating back to 2011, we have recommended the City Council and management \nstrengthen internal controls over payroll. The current audit identified continuing \ncontrol weaknesses in this area. \nDescription of Condition \nThe City uses a system to run payroll and issue payroll checks that is separate from \nits general ledger and financial reporting system. The payroll system data is \nuploaded to its general ledger after payroll checks are processed. However, after \nthe payroll is upload ed, subsequent payments to vendors for employee benefits \u2013 \nsuch as retirement, unemployment and deferred compensation \u2013 are made through \nan online system. \nWe noted the following payroll related control deficiencies that continue to hinder \nthe City\u2019s ability to properly report payroll expenditures in the general ledger: \n\uf0b7 In 2015, o ne City employee was responsible for human resources and \npayroll functions without oversight or monitoring. In 2016, the City hired a \nseparate employee to process employee payro ll, independent from human \nresources functions. However, human resources was still responsible for \nprocessing employee benefit payments, which included calculating, \nreporting and remitting these payments. No one reviewed this information \nto ensure it was submitted or recorded correctly. \n\uf0b7 An independent review of payments to benefit vendors was not performed \nbefore the payments were issued to ensure the transactions were valid, \nsupported and properly recorded in the general ledger. \n\uf0b7 Although the City performed a reconciliation between the bank statement \nactivity and the general ledger, differences identified during the \nreconciliation were not adequately followed up on. Differences related to \npayroll transactions were recorded in a temporary clearing account and sent \nto the Human Resources Assistant for follow-up; however, the City did not \nalways identify the reason for the differences to accurately record the \ntransactions to the proper account. \n \n \n \nWashington State Auditor\u2019s Office Page 7 \nCause of Condition \nThe City Council and the City Manager have not made it a priority to address prior \naudit recommendations or to segregate the payroll and human resources functions \nin a manner that provides adequate oversight, monitoring and accountability. \nAlthough these positions were separated during the audit period, Human Resources \nstill processes benefit payments without adequate oversight. Further, management \nhas not held staff accountable for following up on differences that are identified \nbetween the bank reconciliation and the ge neral ledger to ensure all payroll \ntransactions are recorded accurately in the general ledger system. \nEffect of Condition \nWithout adequate oversight and monitoring of payroll payments and the \nreconciliation to the general ledger, the City cannot ensure all payments are valid. \nAlso, the City cannot ensure that the general ledger reports accurate payroll \nexpenditures. \nFrom our review of bank reconciliations for 2016, the City identified the following \npayments processed through the bank that were not included in the general ledger: \n\uf0b7 One retirement payment of $11,619 from February 2016. \n\uf0b7 Three payments for unemployment compensa tion totaling $13,095 from \nMarch, May and November 2016. \nIn addition, there were multiple instances in 2016 when the deferred compensation \npayments in the general ledger did not agree to the amount paid, for minor amounts. \nOnce these differences were identified, the City recorded these transactions in the \nclearing fund and flagged them for further follow-up. However, at the time of our \naudit, the City had followed up on only one out of the four transactions several \nmonths after the transaction occurred. Further, the City did not take adequate steps \nto research why the differences occurred and establish appropriate procedures to \navoid future differences. \nThe City was forced to do a prior period adjustment, totaling $192,988, at the \nbeginning of 2016 to clear unresolved payroll differences that had accumulated \nsince 2012. Unresolved differences of about $10,000 still remain in the clearing \naccount as of the date of our audit. \n \n \n \nWashington State Auditor\u2019s Office Page 8 \nRecommendation s \nWe recommend the City develop payroll policies and internal control processes to \nensure: \n\uf0b7 Adequate monitoring, review and approval of all payroll benefit payments \n\uf0b7 All payroll-related payments are accurately and promptly reconciled to the \ngeneral ledger to ensure accurate reporting \n\uf0b7 Any unresolved differences continue to be researched and resolved to \nensure all public funds are accounted for and properly recorded \nCity \u2019s Response \nThe City of Sunnyside acknowledges this finding in part, however disputes the \nassertion that the City Council and City Manager do not make this a priority. The \ncity has been working to rectify these conditions. The City did in fact hire a payroll \nclerk to segregate HR and payroll functions. The city has been working on \ntransitioning to a single financial software system for several years. Dur ing the \naudit period the City was using one (BIAS) financial software for most financial \ntransactions, and another (Eden) because it was not able to use Bias for HR and \npayroll. The city has now completed the transition and has eliminated the dual \nsystem problem. Management recently reorganized staff and has placed HR under \nthe direct supervision of the Finance and Administrative Services Director. All \npayroll benefit payments are now run through Accounts payable and have a two \ntear approval process. The pa yroll related payments are now reconciled to the \nGeneral Ledger in a timely manner. Management is currently working on resolving \nall outstanding HR and payroll related discrepancies. \nAuditor\u2019s Remarks \nWe appreciate the City\u2019s commitment to resolve this finding and thank the City for \nits cooperation and assistance during the audit. We will review the corrective action \ntaken during our next audit. \nApplicable Laws and Regulations \nRCW 43.09.200 \u2013 Local government accounting \u2013 Uniform system of accounting. \nBudgeting Accounting and Reporting System (BARS) Manual \u2013 Accounting \nPrinciples and Controls, Internal Control, Constrols over Financial Reporting \nBARS Manual 3.1 \u2013 Accounting Principles and Internal Controls \nBARS Manual 3.8.11 \u2013 Electronic Funds Transfer \u2013 Disbursements \n \n \n \nWashington State Auditor\u2019s Office Page 9 \nFinance & Administrative Services Director \n818 East Edison Avenue \nSunnyside, Washington 98944 \n(509) 837-3782 Office, (509) 837-3268 Fax", "https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1021358&isFinding=false&sp=false", "2026-07-30 13:24:54"]], "columns": ["rowid", "source", "report_number", "finding_number", "muni_id", "state", "entity_name", "entity_type", "entity_ext_id", "place_geoid", "match_method", "auditor", "report_title", "audit_type", "fiscal_year", "period_start", "period_end", "published_date", "finding_category", "severity", "questioned_cost", "cost_basis", "finding_title", "finding_text", "report_url", "fetched_at"], "primary_keys": ["rowid"], "primary_key_values": ["42"], "units": {}, "query_ms": 1.398293999955058, "source": "MyTown", "source_url": "https://mytown.theboringparts.com", "license": "CC BY 4.0", "license_url": "https://creativecommons.org/licenses/by/4.0/"}