The city of Camas allocated more than $863,000 in administration salaries and benefits costs for utilities in 2011 without proper documentation for benefits received — a misstep that may have resulted in higher utility rates for the city’s residents, according to the Washington State Auditor’s Office.
The auditor’s report, released Monday, stopped short of saying the city’s shared costs resulted in raised utility rates. The city sets the rates, and thus is responsible for increases to rates, explained Auditor’s Office spokeswoman Mindy Chambers.
In towns like Camas, employees in core services such as human resources and information technology provide services to all city departments. Some of those departments are operated by proceeds from water and sewer bills, and others are funded by taxes. The audit hinges on how the city accounts for the amount of work those core employees do for each department.
The report’s release marked the first time in more than three decades the city received an audit finding, the state Auditor’s Office said. The city did, however, receive a notice in 2010 about its documentation procedures with respect to charging costs in proportion to benefits received.
“One of the reasons we look at this,” Chambers said, “is, budgets are getting tighter all the time and cities are looking at ways to pay for things. It’s important to document what you’re paying for and why.”
It is important, Chambers continued, to make sure cities are using taxpayer dollars for what they’re intended for, rather than taking restricted dollars to fill another department’s financial hole.
The state Auditor’s Office acts as a state and local government accountability arm. However, it has no enforcement powers. The onus often falls on city residents to decide whether their local government’s behavior is acceptable, Chambers noted.
Lack of paper trail
Camas set aside the money for employees’ salaries in engineering, human resources and IT, among other departments, based on budget projections, not actual expenditures, the report noted. The city could not provide paperwork to support why it distributed costs for general administration and other city functions, including those with restricted dollars, according to the report.
However, Camas officials’ actions were “fair and rational,” the city responded in the auditor’s report, adding no evidence existed that the city used workers to perform jobs in areas where taxpayer dollars were not intended. The city made an effort to comply with the auditor’s office’s original notice, but found it “cumbersome,” Camas finance director Joan Durgin said Monday afternoon.
The city’s staff knows how employees spend their hours, Durgin said, but in the past the daily activities have not been aggressively noted. That lack of a paper trail resulted in the auditor’s findings.
The audit pointed out that Camas complied with state laws and regulations in “most areas.”
Camas officials pledged to upgrade the city’s system of documenting distribution costs and create an improved cost allocation plan defining what money goes where based on dollars spent, not budgeted. How those upgrades will be enacted remains unclear at this point, Durgin said.
The next audit for Camas’ allocation of shared costs will be made public around July 2013, Chambers said.