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State audit shows city's finances in woeful shape

In an audit report issued this morning, Monday, the state auditor's office slammed the city of Sunnyside on three areas of financial concerns.

Sunnyside City Council members met privately with auditors about the findings last month. That session was closed to the public, but tonight at 6:30 p.m. council will discuss the financial woes during their regular meeting.

Auditors critiqued Sunnyside officials for moving $900,000 from utility funds to support day-to-day general fund expenses. The utility money is paid through taxes the city assesses on users and is supposed to be used for the costs of administering the utilities - not to cover other day-to-day expenses.

Nearly a year ago, former Deputy City Clerk Byron Olson warned the city council that auditors might hit the city with a finding on the issue. At that time, he noted general fund monies might have to be used to pay back the utility account as much as $400,000.

In a written response to this most recent state audit, the city pledged that it would calculate the number of transactions for each department and allocate costs accordingly.

Auditors also noted that due to a high turnover rate at city hall, there is a lack of oversight of financial operations.

For example, auditors noted during the time period that was reviewed - January 2010 to December 2011 - one employee was responsible for all payroll check transactions and deliveries. That includes printing checks with the city manager and finance director signatures already affixed. In a written response, the city indicated Interim City Manager Frank Sweet is now reviewing payroll checks for accuracy before releasing them.

Another of the three findings took city officials to task for a decline in Sunnyside's financial condition due to not effectively managing operations.

Specifically, auditors say as of May 31, 2012, Sunnyside's general fund balance was in the red to the tune of $613,516. In contrast, at the end of 2009 the city had a general fund balance of $2.7 million.

Further, just last year the city council approved taking $400,000 from the ambulance/emergency medical service fund - paid for through a tax levied on citizens - and loaned it out to help construct a new fire station.

In their written response, city officials said they are now implementing a monthly report to the city council showing cash and investments as well as revenues and expenditures.

The Sunnyside City Council will deal with the audit problems as the first item on its active agenda. Tonight's meeting will be held at the Law and Justice Center.

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