PRESTON _ When the Washington State Auditor comes to town

and checks on business and financial practices, in many instances the

findings are innocuous. However, the Feb. 18 release of the audit results for

King County Water District No. 123 in Preston turned up several

irregularities for the period Jan 1, 1996 to Dec. 31, 1998.

On the plus side, audit officials determined that in most cases the

district had complied with state laws and regulations and its own policies

and procedures. However, they also stated missing and incomplete records

made it “difficult to conduct the audit.”

The auditors highlighted three primary areas:

• An absence of meeting minutes for several months in 1996, 1997

and 1998;

• A substantial overpayment of compensation to the three district

commissioners; and

• A lack of supporting documentation for $47,456.81 in claims

paid in 1996.

The district is a small one, covering approximately 10 square miles

in the vicinity of Preston and serving only 73 customers. The three

commissioners during the audit period were Chairman Roger Armstrong,

Steve Carlson and Robyn Chisholm.

“It was a regularly scheduled audit,” said Karen Stromme, audit

manager for the state’s King County Audit Team. “It’s a very tiny district;

we do it about every three years.”

In their report the auditors noted the commissioners were unable to

locate district meeting minutes for nine months in 1996, five months in

1997 and one month in 1998 stating, “The minutes either were not recorded

or not retained. State law requires the minutes of all regular and

special meetings, except executive sessions, to be promptly recorded and open

to public inspection.”

The commissioners’ response was that they did not know what had

happened to the minutes. However, following their Jan. 27, 2000

regular meeting, the commission members notified the state auditor that they

had implemented measures to ensure this never happened again and had

located and filed the missing documents.

A second study determined the three commissioners

overcompensated themselves during the audit period. Between 1996 and 1998

the members of the board authorized themselves a rate of $75 each

per meeting. However, state law limited commissioner compensation to

$50 per meeting through 1998, and then raised the limit to $70. Therefore,

the commissioners were overpaid a total of $2,175 through 1998 and

$90 through the end of the audit period.

The auditor recommended the district seek repayment for the

amounts paid in excess of state law and for amounts paid for meetings which

had no documentation.

In response, the commissioners stated it was a simple

misunderstanding dating to the last audit in 1996

and they had reduced their per-meeting compensation to $70, per state

law. They did not, however, address the issue of repayment, a point noted

by Stromme.

Finally, the auditors called into question $47,456.81 worth of

claims in 1996 that were paid without supporting documentation. In their

report the audit team noted, “Without such supporting documentation, we

were unable to determine if the expenditures paid by the District during 1996

were appropriate or properly authorized … the lack of supporting

documentation results in a lack of accountability

and unnecessarily increases the risk of fraud or abuse.”

Again, the commissioners were unable to provide an explanation

on why the documentation was not retained. Following their January

2000 meeting they stated they had implemented measures to ensure that

the event did not reoccur.

As of Tuesday morning, the commissioners had not responded to

requests for comments and additional information on the audit report.