The Washington State Auditor’s Office issued a finding against the city of Ridgefield in a report released Thursday, noting two areas where the city’s internal controls over accounting and financial preparation were not adequate to ensure accurate and complete financial reporting in 2018.
The first issue stemmed from utility work around the widening of South Hillhurst Road before the new Ridgefield School District 5-8 campus opened. The city was working with a utility company on the project, but the company wasn’t going to get the work done by the city’s timeline. City officials wanted the work completed before the new school campus opened.
Ridgefield officials opted to have the city handle the work and billed the company $149,160 for it. The company didn’t pay that back to the city within 60 days of the end of the fiscal year on Dec. 31, according to Kirk Johnson, the city’s finance director.
Johnson said the city should’ve deferred that revenue, Johnson said. Because of that, the auditor’s office determined “the city overstated revenues by $149,160 and understated deferred outflows.” Since the audit, Johnson said the city added in a step to the year-end checklist to look at all revenues, not just grant revenue, to make sure it was all received within the 60 days. Previously, Johnson said the city only looked at grant revenue in that way.
The other issue dealt with the lease agreement and payment for the new Ridgefield Administrative and Civic Center, which is located in the former View Ridge Middle School building. The school was renovated and now holds school district offices, a few city departments, a board room for city council and school board meetings, and meeting space for other community groups.
Ridgefield City Council approved the lease and a payment of $750,000 to the school district on Dec. 20, about a week before the school district approved it. The auditor’s report said that “the city understated both other financing sources and other financing uses in the general fund by $750,000.”
“We posted it in a way they would like to see different,” Johnson said. “There’s no cost out to the public. It’s an interpretation of accounting principles.”