Its financial reports have never been reliable, according to all the audits conducted of the Fort Worden Public Development Authority by the State Auditor. Every audit since the FWPDA opened its doors has found inaccuracies, omissions and failures to comply with required accounting practices. Recent discoveries, which will be addressed in upcoming audits, have uncovered massive malfeasance and irresponsibility that jeopardize the organization’s continued existence.

The first audit of FWPDA by the State Auditor found that for its first two years of operation, 2014 and 2015, the organization grossly misstated income and revenue.

The full audit report for 2014 and 2015 may be read by clicking here.

In response to these findings, the PDA informed the State Auditor that it was “implementing procedures to ensure internal controls are put in place and adhere[d] to in order to address this finding….” The PDA stated that this action was “our priority.” Further, the PDA said that it “has also established an Audit Committee to oversee future annual reporting as an extra measure to make sure accurate reporting takes place.”

The State Auditor recommended strongly that staff receive the adequate training and resources needed to do their job of preparing accurate accounts. PDA pledged this would be done.

But problems got worse.

In its audit for 2016 and 2017, the State Auditor reported an even longer list of adverse findings. This time the FWPDA attempted to blame its own failures on the State Auditor.

The full report of the 2016 and 2017 audit may be read by clicking here.

The adverse finding include:

–reports filed late by 544 days for 2016 and 180 days for 2017.

–failure to disclose $3.5 million of debt.

–cash flow statements with mathematical errors for both years.

–deposit liabilities misclassified as deposit inflows in the amount of about half a million dollars each year.

–operating expenses and liabilities misstated for both years.

–failure each year to prepare the required Management’s Discussion and Analysis.

–failure to observe generally accepted accounting practices in the presentation of basic financial statements.

Once again the State Auditor recommended that FWPDA adequately train staff responsible for preparing financial statements “and implement effective secondary review to ensure financial statements are accurate, complete and submitted in accordance with GAPP [Generally Accepted Principles and Practices].”

In response, FWPDA argued it was the State Auditor’s fault that its reports were late. It additionally tried claiming that the reports had actually been uploaded timely, but someone just had not hit “send” for a period of more than a year and a half for the 2016 report and half a year for the 2017 report.

The State Auditor responded to this attempt at blame shifting by stating, “The Authority provided our office multiple revisions to the financial statements resulting in additional procedures which elongated the audit.”

The State Auditor and FWPDA also argued about whether the Fort Worden Foundation should be reported as a component unit of FWPDA. The Foundation was created in 2016 to conduct year-round fundraising for FWPDA. At its most recent Board of Directors meeting, October 28, 2020, that issue again surfaced when Acting Executive Director David Timmons agreed with the State Auditor and said that the Foundation must be included from now on in the PDA’s financial reporting.

Once again, the State Auditor urged FWPDA to adequately train and equip its financial reporting staff to do its job right. And, once again,  FWPDA responded with the same promise it used to answer the Auditor’s adverse findings for 2014 and 2015:

The State Auditor will next audit and report findings for 2018 and 2019. Acting Executive Director Timmons has announced that as part of its preparation of reports for the State Auditor, an “accountability audit” will be conducted to investigate how FWPDA’s financial affairs have reached the point where, to use his words, it has become “a house of cards” with any one of many events capable of triggering a “cascade” of catastrophic failures and defaults.

In our first report on this matter, we discuss how Timmons has stepped in after FWPDA’s long-time Executive Director retired and the bad news he has delivered to the Board as he uncovered “an overwhelming” volume of serious financial problems. You may read that report by clicking here.