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Home My WebLink About112223 Office of the Washington State Auditor Pat McCarthy Office of the Washington State Auditor Pat McCarthy Accountability Audit Report Jefferson County For the period January 1, 2021 through December 31, 2022 Published ;Voveinber 22, 2023 . • ■❑ Scan to see another great way �_� we're helping advance Report No. 1033588 ;a�, p #GoodGovemment Office of the Washington State Auditor Pat McCarthy November 22, 2023 Board of Commissioners Jefferson County Port Townsend, Washington Report on Accountability Thank you for the opportunity to work with you to promote accountability,integrity and openness in government. The Office of the Washington State Auditor takes seriously our role of providing state and local governments with assurance and accountability as the independent auditor of public accounts. In this way,we strive to help government work better,cost less,deliver higher value and earn greater public trust. Independent audits provide essential accountability and transparency for County operations. This information is valuable to management, the governing body and public stakeholders when assessing the government's stewardship of public resources. Attached is our independent audit report on the County's compliance with applicable requirements and safeguarding of public resources for the areas we examined. We appreciate the opportunity to work with your staff and value your cooperation during the audit. Sincerely, Pat McCarthy, State Auditor Olympia,WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at(564) 999-0950, TDD Relay at(800) 833-6388, or email our webmaster at webmasterna,sao.wa.gov. Insurance Building,P.O.Box 40021 •Olympia,Washington 98504-0021 •(564)999-0950• Pat.McCarthy@sao.wa.gov TABLE OF CONTENTS Audit Results 4 Related Reports 6 Information about the County 7 About the State Auditor's Office 8 Office of the Washington State Auditor sao.wa.gov Page 3 AUDIT RESULTS Results in brief This report describes the overall results and conclusions for the areas we examined. In those selected areas, County operations complied, in all material respects, with applicable state laws, regulations, and its own policies, and provided adequate controls over the safeguarding of public resources. However, we noted certain matters related to retroactive pay increases that we communicated to County management and the Board of Commissioners in a letter dated November 15, 2023. We appreciate the County's commitment to resolving those matters. In keeping with general auditing practices, we do not examine every transaction, activity,policy, internal control, or area. As a result, no information is provided on the areas that were not examined. About the audit This report contains the results of our independent accountability audit of Jefferson County from January 1, 2021 through December 31, 2022. Management is responsible for ensuring compliance and adequate safeguarding of public resources from fraud, loss or abuse. This includes the design, implementation and maintenance of internal controls relevant to these objectives. This audit was conducted under the authority of RCW 43.09.260,which requires the Office of the Washington State Auditor to examine the financial affairs of all local governments. Our audit involved obtaining evidence about the County's use of public resources, compliance with state laws and regulations and its own policies and procedures, and internal controls over such matters. The procedures performed were based on our assessment of risks in the areas we examined. Based on our risk assessment for the years ended December 31,2022 and 2021,the areas examined were those representing the highest risk of fraud,loss, abuse,or noncompliance.We examined the following areas during this audit period: • Accounts payable—general disbursements, credit cards,travel expenditures, employee reimbursements, interfund payments and electronic funds transfers • Payroll — gross wages, overtime, leave cash outs, bonus and incentive payments, retroactive payments, severance payments and electronic funds transfers • Cash receipting—Parks and Recreation • Use of restricted funds — County Road fund, sales tax and affordable housing/homelessness revenues Office of the Washington State Auditor sao.wa.gov Page 4 • Sheriff's Department and Jail — evidence room, licenses and permits and receivables from other jurisdictions • Conflict of interest—beneficial interest laws • Self-insurance for unemployment • Open public meetings — compliance with minutes, meetings and executive session requirements • Financial condition—reviewing for indications of financial distress Office of the Washington State Auditor sao.wa.gov Page 5 RELATED REPORTS Financial Our opinion on the County's financial statements and compliance with federal grant program requirements is provided in a separate report, which includes the County's financial statements. That report is available on our website, http://portal.sao.wa.gov/ReportSearch. Federal grant programs We evaluated internal controls and tested compliance with the federal program requirements, as applicable, for the County's major federal program, which is listed in the Schedule of Findings and Questioned Costs section of the separate financial statement and single audit report. That report is available on our website, http://portal.sao.wa.gov/ReportSearch. Office of the Washington State Auditor sao.wa.gov Page 6 INFORMATION ABOUT THE COUNTY Jefferson County serves approximately 33,400 citizens and is located in Western Washington on the Olympic Peninsula. The County provides an array of services including District and Superior Court, public safety, parks and recreation, fairgrounds, solid waste disposal, planning, road maintenance and construction,public works engineering and general administrative services. An elected, three-member Board of Commissioners governs the County. Additional elected officials include: Assessor, Auditor, District Court Judge, Superior Court Judge, Prosecutor, Sheriff, Clerk and Treasurer. The County's General fund operated on budgets of$27 million and $26 million in 2022 and 2021,respectively. The County has approximately 300 employees. Contact information related to this report Jefferson County Address: P.O. Box 563 Port Townsend,WA 98368 Contact: Judy Shepherd,Finance Manager Telephone: (360) 385-9231 Website: www.co.jefferson.wa.us Information current as of report publish date. Audit history You can find current and past audit reports for Jefferson County at http://portal.sao.wa.gov/ReportSearch. Office of the Washington State Auditor sao.wa.gov Page 7 ABOUT THE STATE AUDITOR'S OFFICE The State Auditor's Office is established in the Washington State Constitution and is part of the executive branch of state government. The State Auditor is elected by the people of Washington and serves four-year terms. We work with state agencies,local governments and the public to achieve our vision of increasing trust in government by helping governments work better and deliver higher value. In fulfilling our mission to provide citizens with independent and transparent examinations of how state and local governments use public funds, we hold ourselves to those same standards by continually improving our audit quality and operational efficiency, and by developing highly engaged and committed employees. As an agency, the State Auditor's Office has the independence necessary to objectively perform audits, attestation engagements and investigations. Our work is designed to comply with professional standards as well as to satisfy the requirements of federal, state and local laws. The Office also has an extensive quality control program and undergoes regular external peer review to ensure our work meets the highest possible standards of accuracy, objectivity and clarity. Our audits look at financial information and compliance with federal, state and local laws for all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits and cybersecurity audits of state agencies and local governments, as well as state whistleblower, fraud and citizen hotline investigations. The results of our work are available to everyone through the more than 2,000 reports we publish each year on our website, www.sao.wa.gov. Additionally, we share regular news and other information via an email subscription service and social media channels. We take our role as partners in accountability seriously.The Office provides training and technical assistance to governments both directly and through partnerships with other governmental support organizations. Stay connected at sao.wa.gov Other ways to stay in touch • Find your audit team • Main telephone: • Request public records (564)999-0950 • Search BARS Manuals(GAAP and cash), and find reporting templates • Toll-free Citizen Hotline: • Learn about our training workshops (866) 902-3900 and on-demand videos • Discover which governments serve you • Email: —enter an address on our map webmaster@sao.wa.gov • Explore public financial data with the Financial Intelligence Tool Office of the Washington State Auditor sao.wa.gov Page 8