November 27, 2009

Washington Wine Commission financial mess

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The Washington Wine Commission has carried hundreds of thousands of dollars of errors in its accounting, neglected to prepare financial statements, approved inappropriate payments to employees and allowed inappropriate use of state credit cards, according to a pair of recent audits from the Washington State Auditor.

In an accountability audit, auditors found over $100,000 in questionable payments, reimbursements and credit card charges. In a financial audit, that the commission understated receipts and expenses by $1.2 million over three fiscal years. Part of the problem, according to auditors, was that the commission failed to reconcile records with bank accounts — the equivalent of balancing a personal checkbook without ever comparing it to bank statements.

For both reports, the Commission had similar responses.

To the audit of financial reporting:

The Washington Wine Commission appreciates the efforts of the State Auditor’s Office. The Commission has adopted significant internal controls and does perform monthly bank reconciliations. The Commission has established timelines for preparing financial statements in accordance with the BARS manual on an annual basis. It also has reconciled the cash basis financial statements, noted by the auditors, to within a reasonable immaterial amount, and corrected the adjustments and errors of previous accounting system weaknesses.

It should also be noted that the Commission, during and since the period of the audit, has hired a new Executive Director, Chief Financial Officer, and Finance Manager/CPA with the goal of greater fiscal accountability. The Washington Wine Commission strongly believes it has made and is making great strides in transparency and accountability in-line with the Auditor’s recommendations.

To the audit of payments:

The Washington Wine Commission appreciates the efforts of the State Auditor’s Office. The Commission has implemented firm policies to control and monitor expenditures – including the requirement that employees provide business purposes and proper supporting documentation for all credit card transactions and expense reimbursements. These actions will support the efficiency of the Commission’s work to promote the Washington wine industry without the benefit of general tax dollars or public funding.

It should also be noted that the Commission, during and since the period of the audit, has hired a new Executive Director, Chief Financial Officer, and Finance Manager/CPA with the goal of greater fiscal accountability. It also no longer employs the individual responsible for the majority of the questioned costs. The Washington Wine Commission strongly believes it has made and is making great strides in transparency and accountability in-line with the Auditor’s recommendations.

The Commission a state agency charged with marketing the products of Washington’s vintners and funded by a tax assessed on wine and grape producers.

Accountability Audit

Financial Audit

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