Useful lives of capital assets: An important estimate

construction_212793112.jpgWith the condition of infrastructure serving as a point of national discussion, useful life estimates for capital assets make for a timely accounting topic. Governments must maintain support for the useful life estimates they use for assets, and have a process to reassess the estimates periodically. As auditors, there are times we find governments have not kept the documentation to support the estimates they used for reporting or have not performed a recent reassessment, making it difficult to determine whether the reporting is accurate. To further complicate the matter, long-lived assets such as infrastructure and buildings can prove challenging when estimating useful lives. If the useful life of an asset, or class of assets, appears questionable and a government cannot support the useful life estimate it used or has not reassessed that estimate in many years, then this can quickly become an area of audit concern. Continue reading

How your public auditors spent 2017

FB_IMG_1519406480411Your public auditors were busy in 2017. The Office of the Washington State Auditor published more than 2,000 reports covering a wide spectrum of topics.
While many people are familiar with our work in their area, fewer know the full scope of what the Office does across Washington. We are making a concerted effort to increase trust in government, and a key part of that goal is making audit work accessible and easy to understand.
This year, the annual report conveys the same detailed information in a more visual form. The Office’s teams do excellent work across the state, and we want you to know about it.
The 2017 annual report discusses the types of audits performed, our satisfied clients, training public servants and how the Office saves taxpayers money. Click here to check it out!

Kenmore showcases love of community

At the Office of the Washington State Auditor, one of our primary functions is to evaluate the finances of governments across the state. But did you know that what we do goes beyond the bottom line, and into the very heart of what makes a government function well and connect to its residents? This emotional connection is what is at the heart of our newest video, “For the Love of Kenmore.” It’s about helping local governments in Washington find, as Kenmore City Manager Rob Karlinsey puts it, “value beyond the purely financial.”

In 2015, the City of Kenmore invited Peter Kageyama, a community development consultant and author of “For the Love of Cities,” to speak. The goal was to develop what Peter calls the “emotional capital” for both the people of Kenmore and the public servants who work to make Kenmore a great place to call home. The City invited engaged residents to hear Peter speak, and a new private-public collaboration was born, with amazing results.

Fast-forward to 2016, when the Government Performance Consortium (GPC) (a collaboration between the State Auditor’s Office, University of Washington-Tacoma and the Municipal Research and Services Center) invited Kageyama to come to speak at several cities across the state. You can watch that video summary here. After that event, many governments reached out to GPC asking how they, too, could learn more about creating this type of emotional investment in their government — to engage residents and increase trust in their government, and thereby to work better together.

This video shows one response to that demand — that along with good financial management practices, sound budgeting guidance and performance improvements, local governments can find a path toward creating meaningful (and, dare we say, loving ) relationships with the people they serve. For more information about this, and other assistance for local governments, please visit our Performance Center page.

Additional Accountability Audits Funded by Legislature

flashlightLarge state agencies will get more in-depth reviews and smaller agencies will get more frequent accountability audits thanks to a boost in funding included in the supplemental state budget approved Thursday.The Office of the Washington State Auditor requested an additional $700,000 to support accountability audit work, and the Legislature agreed. Accountability audits are a specific type of audit that evaluate whether there is reasonable assurance the state agency adhered to applicable federal or state laws, regulations and its own policies and procedures, in addition to accounting for public resources.
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OPEB reporting update (GASB 45 to 75) serves as a reminder: Don’t forget about previous statements

Plenty of attention surrounds a new ReminderGovernmental Accounting Standards Board (GASB) statement in the year it is implemented. Then we tend to forget about them in subsequent years. Not all GASB statements are relevant or material for all governments in the year they are implemented, but all governments should continue to monitor them.

A timely example is GASB Statement No. 45, Accounting and Financial Reporting by Employers for OPEB. When preparing for the 2018 implementation of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which updates GASB 45, we asked questions such as “Who uses the State Actuary’s online tools for calculating OPEB liability under GASB 45?” and “How material are those governments’ Other Post-Employment Benefits (OPEB) liabilities?” Continue reading

New standard out for auditors assessing a government’s financial condition

standards_binder--125269442.jpgPart of management’s responsibility for financial reporting and safeguarding of public resources is to regularly evaluate its financial condition and develop plans to address any serious issues. For financial reporting, both the Budgeting, Accounting and Reporting System (BARS) Manual and the Governmental Accounting Standards Board (GASB) Statement No. 56 require disclosure in the notes to the financial statements regarding any situations that give rise to a substantial doubt about the government’s ability to continue to operate, along with management’s plans to address the situation.

While the BARS Manual and GASB standards address requirements for financial statement preparers, professional standards from the American Institute of Certified Public Accountants (AICPA) address requirements for auditors. These standards require the auditor to independently consider the government’s financial condition and any disclosures to determine whether the financial statements are fairly presented. This existing responsibility was underscored by the AICPA’s new Statement on Auditing Standards No. 132, which is intended to bring more consistency and greater clarity to how auditors approach this important topic. Continue reading

King County Water District No. 125 receives a Stewardship Award

2018-02-06 King County Water District SASA

From left to right: Laura Marrone (Admin Tech), Rose Lauer (Assistant Office Manager), Commissioner/President Jerry Thornton, Sr., State Auditor Pat McCarthy, Commissioner John Thompson, Shane Young (General Manager) & Commissioner/Secretary, Renea Blanchette

Earlier this week, State Auditor Pat McCarthy recognized the King County Water District No. 125 for their commitment to making government work better and promoting a culture of accountability with a State Auditor’s Office Stewardship Award. Continue reading

Washington Auditor’s acclaimed Financial Intelligence Tool to be an example of leading practice at Pew Charitable Trust national conference

Who is using FIT?

The Office of the Washington State Auditor is a national leader in developing and applying tools to assess and display information about local governments’ financial condition. That’s why the Pew Charitable Trust has invited the Office of the Washington State Auditor to speak at its State and Local Fiscal Health Workshop on February 27 in Boston, Massachusetts.

The workshop will bring together state officials from across the country to help staff at the Massachusetts Division of Local Services as they work to improve the state’s municipal fiscal data dashboard and to allow officials from all the states to exchange ideas.

Washington’s Financial Intelligence Tool (FIT), a unique local fiscal health tool and dashboard, is of particular interest to the participants as they seek to improve their own fiscal data visualizations. Designed to help local governments understand information about their financial health, FIT received the 2016 National State Auditors’ Association (NSAA) Award for Excellence in Accountability. Since then, local governments across Washington have used FIT to gain insight into their financial condition and make sound fiscal decisions based on that data.