Chelan PUD recovers $1M after audit review

WENATCHEE — Chelan County Public Utility District auditors identified about $1 million in unallowable costs on a major capital project, costs that were ultimately recovered, according to a report presented to commissioners on March 16.

The finding was part of the PUD’s annual audit committee update, delivered by Internal Audit Manager Stacey Jagla during the commission’s meeting.

“Internal audit identified about a million dollars in unallowable costs … we were ultimately able to work with project delivery and those were reimbursed by the contractor,” Jagla said.

The costs were tied in part to invoice reviews conducted on several large contracts, including work associated with the district’s Rock Island Dam Powerhouse 2 generating unit rehabilitation project.

Jagla said the review process has led to improved oversight practices, including the development of internal tools and checklists to help staff better monitor complex contractor billing.

“So we worked with PCS to come up with a checklist that we shared with all of the project delivery and those that review invoices of things to be thinking about and things to be looking for,” she said.

The update also included a summary of external audits conducted over the past year. Jagla reported that reviews by the Washington State Auditor’s Office and financial audits by PricewaterhouseCoopers found the district in compliance with applicable standards.

“In quarter one, the district received a clean audit from PricewaterhouseCoopers, who is our financial statement auditor,” Jagla said.

When asked by PUD Commission President Kelly Allen about emerging trends or risks identified through the audit process, Jagla said no major concerns rose to a level requiring board attention.

“I wouldn't categorize anything that came through the committee that would be significant enough that the board would need to know of,” she said.

Jagla added that while audits continue to identify opportunities for improvement, those are typically addressed at the management level.

Commissioners also heard that the district’s internal audit function has increasingly taken on an advisory role, with staff seeking input earlier in project development and operational planning.

“We have moved a lot into that advisory role where management just asks us to help come in and provide another set of eyes or look at controls,” Jagla said.

The audit committee approves the internal audit work plan each year and reviews the results of both internal and external audits as part of its oversight responsibilities.

Andrew Simpson: 509-433-7626 or andrew@ward.media