09-01-2015 WA State Auditor's OfficeIt 0
ry
\-'9P9,11 t'9u
1IIN C
City Clerk
Washington State Auditor's Office
Exit Conference
Integrity • Respect • Independence
Jan Jutte, CPA
Acting State Auditor
Director of Local Audit
Kelly Collins, CPA
(360) 902 -0091
Ke11y.Collins @sao.wa.gov
Deputy Director of Local
Audit
Mark Rapozo, CPA
(360) 902 -0471
Mark.Rapozo @sao.wa.gov
Acting Audit Manager
Joanne Klein
(253) 593 -2047 ext 128
Joanne.Klein @sao.wa.gov
Assistant Audit Manager
Evans Anglin
(253) 593 -2047 ext 114
Evans.Anglin @sao.wa.gov
Audit Lead
Brandon Tecca
(253) 593 -2047 ext 129
Brandon.Tecca@sao.wa.gov
www.sao.wa.gov
About our Office
The Washington State Auditor's Office's vision is government that works for
citizens. Our goal is for government that works better, costs less and earns
greater public trust.
The purpose of this meeting is to share our audit results and draft reporting.
We value and appreciate your participation.
Audit Highlights
• Committed and professional staff
• Effective control environment and monitoring
Audit Scope
We performed the following audits for your City of Federal Way:
• Accountability audit for 2014
• Financial statement audit for 2014
• Federal grant compliance audit for 2014
Our reports contained no Findings.
Financial Statement required communications
In relation to our report, we would like to bring to your attention:
There were no material misstatements in the financial statements corrected by
management during the audit.
Uncorrected misstatements in the audited financial statements are listed below.
We agree with management's representation that these misstatements are
immaterial to the fair presentation of the financial statements.
• $7,500 in traffic mitigation fees were classified as deposits payable.
These fees were not reported as revenues when the criteria for revenue
recognition was meet in 2006 and 2007.
• $378,808 in improvement costs for the Dumas Bay Center are misclassified as construction in progress.
This related to a planned multi -phase project. The area improved during Phase 1 was completed in 2004,
but not capitalized at that time pending completion of Phase 2. Phase 2 relates to a separate section of
land and was never initiated. Improvements made during Phase 1 are in use. As such, Phase 1 should be
capitalized and subject to depreciation as applicable.
Recommendations not included in the Audit Reports
Management Letters
Management letters communicate control deficiencies, non - compliance or abuse with a less- than - material
effect on the financial statements or other items significant to our audit objectives. Management letters are
referenced, but not included, in the audit report. We had no issues that we are communicating in a
Management Letter.
Exit Items
Exit items address control deficiencies or non - compliance with laws or regulation that have an insignificant
or immaterial effect on the entity, or errors with an immaterial effect on the financial statements. Exit items
are not referenced in the audit report. We had no exit level issues, though we are required under auditing
standards to bring to Council's attention all uncorrected immaterial errors.
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: // portal. sao.wa.gov /saoportal /Login.aspx
Audit Cost
At the entrance conference, we estimated the cost of the audit to be $56,704, plus travel expenses, and actual
audit costs will approximate that amount.
Customer Service Survey
When your report is released you will receive a customer service survey from us. We value your opinions on
our audit services and hope you provide feedback.
Your Next Scheduled Audit
Your next audit is scheduled to be conducted in Spring, 2016 and will cover the following general areas:
• Accountability for Public Resources
• Financial Statement
• Federal Programs
The estimated cost for the next audit based on announced rates is $59,520 plus travel expenses. This
preliminary estimate is provided as a budgeting tool and not a guarantee of final cost.
If expenditures of federal awards are $750,000 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