The state Auditor’s Office issued several findings, the most serious audit level, for the Jefferson Public Utility District. PUD officials say it’s directly related to a bumpy start after the PUD purchased Puget Sound Energy’s assets in 2013. (Jesse Major/Peninsula Daily News)

The state Auditor’s Office issued several findings, the most serious audit level, for the Jefferson Public Utility District. PUD officials say it’s directly related to a bumpy start after the PUD purchased Puget Sound Energy’s assets in 2013. (Jesse Major/Peninsula Daily News)

State finds deficiencies in Jefferson County PUD audit

Among the recommendations was replacing outdated accounting software that wasn’t fit for the electrical utility.

PORT TOWNSEND — Accounting complications after the Jefferson County Public Utility District’s purchase of Puget Sound Energy assets in 2013 led to several findings from the state Auditor’s Office.

The findings, the most serious of three audit levels, did not come as a surprise to PUD officials, who have been working to fix the problems before the audits were published this month.

Among the findings were that the district did not have adequate internal controls to safeguard public funds, ensure federal expenditures were reported on the schedule of expenditures of federal awards and ensure compliance with American Reinvestment and Recovery Act requirements.

The findings were announced after the state Auditor’s Office audited the PUD’s records from 2010 through 2014.

In 2008, voters gave the PUD the authority to take over providing electrical service in East Jefferson County.

In May 2010, PUD commissioners signed a letter of intent to buy PSE infrastructure for $103 million. PUD received a $115.7 million loan from the U.S. Department of Agriculture with an interest rate of 2.728 percent, locked in for 28 years.

“I agree with the auditor’s recommendations and I’m committed to implementing all of them,” said Barney Burke, vice president of the PUD board. “They did a thorough and fair job of looking at it.”

Among the recommendations was replacing outdated accounting software that wasn’t fit for the electrical utility.

That software was replaced in 2014, and PUD plans to hire a new chief financial officer in the coming month or two, Burke said.

The board is seeking a person with experience with electric utilities and the accounting software to replace the interim CFO, Tammy Esslinger-Lehman.

Auditors found that out of 80 tested PUD transactions between 2013 and 2015, 34 transactions totaling $440,361 did not have approval signatures.

Auditors also found that utility plant assets were overstated by $31,685,488 and accumulated depreciation was overstated by $29,771,410. Accounts receivable were understated by $2,144,582 and accounts payable were overstated by $1,729,606.

With the new software and more staff experienced with accounting, PUD Manager Jim Parker said results of an expected 2015 audit should be much better.

During the transition, he said his priority was to ensure customers had power.

“I would never have thought the biggest problem would be our accounting system,” he said. “I think we’ve done a remarkable job in taking over the electrical utility.”

Wayne King, PUD board member, said the district wasn’t prepared for the accounting after the PUD gained control of PSE’s assets April 1, 2013.

“The PUD was at a real disadvantage,” he said. “We went from 2,000 customers to 20,000 overnight.”

He said it was an astronomical project that for the most part has gone well.

“The findings were that we didn’t have the correct procedures in place,” he said.

A major accomplishment by the PUD is that it has not raised its rates since taking over PSE’s assets, King said.

The PUD is still paying off federal loans for the purchase, he said.

“We’re paying the debt without raising the rates,” he said. “Isn’t that an astronomical accomplishment?”

________

Reporter Jesse Major can be reached at 360-385-2335, ext. 5550, or at jmajor@peninsuladailynews.com.

More in News

Volunteers work to construct the main play structure of the Dream Playground at Erickson Playfield in Port Angeles on Sunday, the last day of a five-day community build to replace play equipment destroyed by arson in December. The playground, built entirely with donated labor, will be substantially complete with primarily detail work and play surface installation still to come. (Keith Thorpe/Peninsula Daily News)
Finishing touches

Volunteers work to construct the main play structure of the Dream Playground… Continue reading

Seabrook CEO Casey Roloff talks with community members about a planned 500- to 600-home development near Sequim Bay on April 23 at John Wayne Marina. (Michael Dashiell/Olympic Peninsula News Group)
Sequim site could include 600 homes

Developer eyeing property near John Wayne Marina

Wait times at Olympic Medical Center emergency department improving, board told

Hospital aims to see patients within 30 minutes of arrival

Clallam to develop Salt Creek campsites for trail

Estimated development cost is $15,000 with annual maintenance at $1,500

Sarge’s Veteran Support house managers, from left, Danny Deckert, David Durnford and Steve Elmelund welcome attendees to the organization’s first fundraiser at the Dungeness River Nature Center on April 27. The event raised nearly $50,000. (Sarge’s Veteran Support)
Sarge’s Veterans Support gets nearly $49K in first fundraiser

More than 100 attend event at Dungeness River Nature Center

Sequim schools looking at options with budget struggles

District freezes most hiring, aims to cut at least $2.5 million

Gary Reidel, representing Wilder Toyota, plucks the winning duck from a truck. Wilder sponsored the winners prize of a 2024 Toyota Corolla. And the winner is Sarah Aten of Port Angeles. Her response was, “That’s amazing, that’s amazing.” There was 28,764 ducks sold this year as of race day. The all-time high was back in 2008 when over 36,000 were sold. (Dave Logan/For Peninsula Daily News)
Thirty-five winners announced in Great Olympic Peninsula Duck Pluck

Fundraising record set for Olympic Medical Center Foundation

Sewer project starting in west Port Angeles

Work crews from Scarsella Brothers, Inc., will resume construction… Continue reading

Port Angeles City Council to conduct special meeting

The Port Angeles city council will conduct a workshop… Continue reading

Weekly flight operations scheduled

There will be field carrier landing practice operations for aircraft… Continue reading

Port Angeles Fire Department community paramedic Brian Gerdes flips pancakes during Saturday’s annual breakfast on Saturday at the fire hall. The event, hosted by the fire department and auxiliary, was a fundraiser for department scholarships and relief baskets. (Keith Thorpe/Peninsula Daily News)
Pancake fundraiser in Port Angeles

Port Angeles Fire Department community paramedic Brian Gerdes flips pancakes during Saturday’s… Continue reading

Work begins on sewer project

Intermittent closures planned in Port Hadlock