Accountability Audit Report Central Klickitat Conservation District Klickitat County

Washington State Auditor'S Office

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Washington State Auditor’s Office Accountability Audit Report Central Klickitat Conservation District Klickitat County Report Date December 14, 2010 Report No. 1004831 Issue Date December 27, 2010 Washington State Auditor Brian Sonntag Decembere 27, 2010 Board of Supervisors Central Klickitat Conservation District Goldendale, Washington Report on Accountability We appreciate the opportunity to work in cooperation with your District to promote accountability, integrity and openness in government. The State Auditor’s Office takes seriously our role to advocate for government accountability and transparency and to promote positive change. Please find attached our report on the Central Klickitat Conservation District’s accountability and compliance with state laws and regulations and its own policies and procedures. Thank you for working with us to ensure the efficient and effective use of public resources. Sincerely, BRIAN SONNTAG, CGFM STATE AUDITOR Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  [phone]  TDD Relay [phone] FAX [phone]  http://www.sao.wa.gov Table of Contents Central Klickitat Conservation District Klickitat County December 14, 2010 Audit Summary ........................................................................................................................ ...

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Washington State Auditor’s Office Accountability Audit Report Central Klickitat Conservation District Klickitat County Report Date December 14, 2010 Report No. 1004831

Issue Date December 27, 2010

Washington State Auditor Brian Sonntag Decembere 27, 2010 Board of Supervisors Central Klickitat Conservation District Goldendale, Washington Report on Accountability We appreciate the opportunity to work in cooperation with your District to promote accountability, integrity and openness in government. The State Auditor’s Office takes seriously our role to advocate for government accountability and transparency and to promote positive change. Please find attached our report on theCentral Klickitat Conservation District’s accountability and compliance with state laws and regulations and its own policies and procedures. Thank you for working with us to ensure the efficient and effective use of public resources. Sincerel ,

BRIAN SONNTAG, CGFM STATE AUDITOR

Insurance Building, P.O. Box 40021Olympia, Washington 985040021(360) 9020370TDD Relay (800) 8336388 FAX (360) 7530646http://www.sao.wa.gov

Table of Contents Central Klickitat Conservation District Klickitat County December 14, 2010 Audit Summary .......................................................................................................................... 1

Description of the District ........................................................................................................... 2

Schedule of Audit Findings and Responses ............................................................................... 4

Audit Summary Central Klickitat Conservation District Klickitat County December 14, 2010 ABOUT THE AUDIT This report contains the results of our independent accountability audit of the Central Klickitat Conservation District for January 1, 2008 through December 31, 2009. We evaluated internal controls and performed audit procedures on the activities of the District. We also determined whether the District complied with state laws and regulations and its own policies and procedures. In keeping with general auditing practices, we do not examine every transaction, activity or area. Instead, the areas examined were those representing the h ighest risk of noncompliance, misappropriation or misuse. The following areas were examined during this audit:  Contracts/agreements Disbursements/expenditures  Procurement (bidding/prevailing Conflict of interest/ethics laws wage) Compliance with state grant  Payroll/personnel requirements RESULTS In most areas, the District complied with state laws and regulations and its own policies and procedures. However, we identified a condition significant enough to report as a finding:  The District did not comply with prevailing wage requirements.

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Description of the District Central Klickitat Conservation District Klickitat County December 14, 2010 ABOUT THE DISTRICT The Central Klickitat Conservation District was established in 1946 for the purpose of promoting conservation services and education to Central Klickitat County residents. A fivemember Board of Supervisors governs the District. Three Board Members are elected by the landowners within the District boundaries and two Board Members are appointed by the Washington State Conservation Commission. The Board appoints a District Manager to oversee the District’s daily operations as well as its six employees. The District is primarily supported through state grants, basic funding provided by the Washington State Conservation Commission and Klickitat County. For fiscal years 2008 and 2009, the District operated on annual budgets of $563,809 and $411,566, respectively. ELECTED OFFICIALS These officials served during the audit period: Board of Supervisors: Scott Wilkins Vic Blandine Mike Norris APPOINTED OFFICIALS Board of Supervisors: Dave Guenther  Larry Williams District Manager Jim Hill DISTRICT CONTACT INFORMATION Address: Central Klickitat Conservation District 1107 S. Columbus Ave. Goldendale, WA 98620 Phone: (509) 7735823 Website: www.ckcd.org

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AUDIT HISTORY We have typically performed an assessment audit on the District. However, the Conservation Commission selected the District to be audited for accountability purposes covering the current twoyear audit period. In the future, we will perform a threeyear accountability audit.

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1.

Schedule of Audit Findings and Responses Central Klickitat Conservation District Klickitat County December 14, 2010

The District did not comply with prevailing wage requirements. Background State law requires local governments to pay prevailing wages for public works projects and for the maintenance work if it is not performed by the government’s employees. Description of Condition During the audit period, the District awarded three contracts for conservation projects ranging from $38,000 to $52,000. We found the District did not comply with state law that requires contractors and subcontractors to file intents to pay and affidavits of payment of prevailing wage with the Department of Labor and Industries for each of these projects. We could not determine if prevailing wages were paid because the District did not obtain documentation from the contractors. Further, one of the projects was funded in part by a federal grant for $18,061. The District must obtain weekly certified payroll reports from contractors to ensure prevailing wage is paid for federally funded projects. The District did not obtain these reports. Cause of Condition District officials and management did not obtain information needed to comply with all prevailing wage requirements. Effect of Condition The District could be liable for paying additional wages if prevailing wage was not paid. Recommendation We recommend the District comply with prevailing wage requirements. District’s Response Central Klickitat Conservation District met the prevailing wage doc umentation requirement for its one construction project completed since the audit period, and will continue to comply with state and federal regulations concerning prevailing wage requirements.

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Auditor’s Remarks We appreciate the District’s commitmentto resolve this finding and thank the District staff for its cooperation and assistance during the audit. We will review the follow up on this issue during our next audit of the District. Applicable Laws and Regulations RCW 39.12.020 Prevailing rate to be paid on public works and under public building service maintenance contractsPosting of statement of intentException. The hourly wages to be paid to laborers, workers, or mechanics, upon all public works and under all public building service maintenance contracts of the state or any county, municipality or political subdivision created by its laws, shall be not less than the prevailing rate of wage for an hour's work in the same trade or occupation in the locality within the state where such labor is performed. For a contract in excess of ten thousand dollars, a contractor required to pay the prevailing rate of wage shall post in a location readily visible to workers at the job site: PROVIDED, That on road construction, sewer line, pipeline, transmission line, street, or alley improvement projects for which no field office is needed or established, a contractor may post the prevailing rate of wage statement at the contractor's local office, gravel crushing, concrete, or asphalt batch plant as long as the contractor provides a copy of the wage statement to any employee on request: (1) A copy of a statement of intent to pay prevailing wages approved by the industrial statistician of the department of labor and industries under RCW 39.12.040; and (2) The address and telephone number of the industrial statistician of the department of labor and industries where a complaint or inquiry concerning prevailing wages may be made. This chapter shall not apply to workers or other persons regularly employed by the state, or any county, municipality, or political subdivision created by its laws. RCW 39.12.040 requires entities obtain Statements of intent to pay prevailing wages and affidavits of wages paid and it provides: (1) Except as provided in subsection (2) of this section, before payment is made by or on behalf of the state, or any county, municipality, or political subdivision created by its laws, of any sum or sums due on account of a public works contract, it shall be the duty of the officer or person charged with the custody and disbursement of public funds to require the contractor and each and every subcontractor from the contractor or a subcontractor to submit to such officer a "Statement of Intent to Pay Prevailing Wages". The 29 Code of Federal Regulations (CFR) contains the DavisBacon Act that applies to all federal assistance programs that fund construction projects.

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29 CFR 3.3(b)Contractors and Subcontractors on Public Building or PublicWork states in part: (b) Each contractor or subcontractor engaged in the construction, prosecution, completion, or repair of any public building or public work, or building or work financed in whole or in part by loans or grants from the United States, shall furnish each week a statement with respect to the wages paid each of its employees engaged on work covered by this part 3 and part 5 of this title during the preceding weekly payroll period. 29 CFR 5.5Contract Provisions and Related Mattersstates in part: (a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution . . . and which is subject to the labor standards provisions of any of the acts listed in Sec. 5.1, the following clauses: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work . . . will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account . . . the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor . . . regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. Office of Management and Budget (OMB) Circular A133,Audits of States, Local Governments,and Nonprofit Organizations, Subpart C, describes the County’s responsibility to establish controls to ensure compliance with the Davis Bacon Act. Section.300,Auditee Responsibilitiesstates in part: The auditee shall (b) Maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs. Washington Administrative Code 296127025,Applicability of Joint FederalState Standardsstates: (1) When a public works project is subject to the provisions of the Washington state public works law, chapter 39.12 RCW, and the Federal DavisBacon and related acts, the contractor and every subcontractor on that project must pay at least the Washington state prevailing wage rates, if they are higher than the federal prevailing wage rates for the project unless specifically preempted by federal law.

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(2) When the federal prevailing wage rates are higher than the Washington state prevailing wage rates, the contractor shall pay the federal rate as required by federal law.

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A BOUT T HE S TATE A UDITOR ' S O FFICE The State Auditor's Office is established in the state's Constitution and is part of the executive branch of state government. The State Auditor is elected by the citizens of Washington and serves four-year terms. Our mission is to work in cooperation with our audit clients and citizens as an advocate for government accountability. As an elected agency, the State Auditor's Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. The State Auditor's Office employees are located around the state to deliver our services effectively and efficiently. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments and fraud, whistleblower and citizen hotline investigations. The results of our work are widely distributed through a variety of reports, which are available on our Web site and through our free, electronic subscription service. We continue to refine our reporting efforts to ensure the results of our audits are useful and understandable. We take our role as partners in accountability seriously. We provide training and technical assistance to governments and have an extensive quality assurance program. State Auditor Brian Sonntag, CGFM Chief of Staff Ted Rutt Deputy Chief of Staff Doug Cochran Chief Policy Advisor Jerry Pugnetti Director of Audit Chuck Pfeil, CPA Director of Special Investigations Jim Brittain, CPA Director for Legal Affairs Jan Jutte, CPA, CGFM Director of Quality Assurance Ivan Dansereau Local Government Liaison Mike Murphy Communications Director Mindy Chambers Public Records Officer Mary Leider Main number [phone] Toll-free Citizen Hotline [phone] Websitewww.sao.wa.gov Subscription Service https://www.sao.wa.gov/EN/News/Subscriptions/

(SAO FACTS.DOC  Rev. 06/09)