I truly hope this is fake news!
Update August 15, 2026: This wasn’t a one-time issue. The State Auditor’s Office found the same core problem in the audit before this one (2015-2017) and the audit after it (2021-2023): inadequate internal controls over financial reporting. The most recent audit found something this one didn’t: an actual reported violation of state law, not just a process weakness. The original 2018-2020 findings are below, followed by details on the other two audits further down the page.
Link (2018-2020 report): City of Roslyn Financial Statements
The Washington State Auditor’s Office performed an independent audit of the City of Roslyn’s financial statements for the years 2018, 2019, and 2020. The audit revealed a material weakness in internal controls over financial reporting, primarily due to:
- Lack of technical expertise among staff to prepare financial statements in accordance with the BARS (Budgeting, Accounting and Reporting System) manual.
- Absence of a secondary review process to catch and correct errors.
- Failure to properly record logging revenue and expenses in the general ledger, resulting in an underreporting of $533,680 in 2018.
Additional errors included:
- Misclassification of over $3.5 million in cash and investments.
- Overreporting of pension liabilities by $49,396 in 2018 and $108,078 in 2020.
The City attributed these issues to staff turnover and inadequate training, and has since taken steps to redistribute responsibilities and improve consistency in financial practices.
Despite these findings, the Auditor issued an unmodified opinion on the fair presentation of the City’s financial statements under its regulatory basis of accounting.
Read the full report details here: https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1030885
The Most Recent Audit (2021-2023) Found More Than a Weakness: It Found a Violation of State Law
The 2021-2023 audit (Finding 2023-001) states plainly:
Reported negative cash and investment balances of $35,189 and $953,822 in one fund for 2022 and 2023, respectively. These funds operated using restricted funds, which does not comply with state law, because the general fund did not have an unassigned fund balance to cover these negative balances and the Council did not authorize an interfund loan. The City’s noncompliance with state laws had a direct and material effect on its 2023 financial statements.
Other findings from this same audit period:
- A $259,000 interbank transfer was misreported as revenue and expense in 2021.
- A $699,952 state grant was misclassified as generic “miscellaneous revenue” in 2022.
- Further fund-balance classification errors occurred across 2022 and 2023.
Read the full 2021-2023 report here: https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1037182
The earliest of the three, the 2015-2017 audit (Finding 2017-001), cited the same root cause: inadequate internal controls over financial reporting. It was marked “Partially Corrected” in the next audit’s own tracking. Read the 2015-2017 report here: https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1022542
Worth knowing: in August 2026, the Roslyn City Council discussed joining a regional consortium to hire a federal lobbying firm to help pursue federal grant funding. Federal grants are held to a stricter compliance standard than the state audits above. Once a government’s federal award spending crosses $750,000 in a year, it triggers a full federal “Single Audit” under Uniform Guidance (2 CFR 200). We’ll follow this story as it develops.
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