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HomeMy WebLinkAboutUpdate Documents - AuditorsDocusign Envelope ID: 7996FC5D-67B7-8BB7-81 FC-DFABFAD27A6A ST ATF �r e ti STATE OF WASHINGTON DEPARTMENT OF LICENSING PO Box 9020 • Olympia, Washington 98507-9020 9/10/2026 Shannon Flastad, Auditor Grant County Auditor Auto License 35 C St NW Ephrata, WA 98823-1685 RE: Vehicle Licensing Office (VLO) Compliance Audit 20261301 Dear Shannon, We completed the Compliance Audit for your VLO. This is your Final Audit Report. We appreciate the assistance provided by your licensing personnel during the audit process. If you have any questions or need further information concerning this report, please email DOLVLOAuditTeam(abdol.wa.gov with subject line: Grant County - ATTN: Carol Marie and Corinne. Sincerely, Signed by: fyAl tt� A13DAF5CE27454©4_.. Brad Benfield Programs & Services Assistant Director Docusign Envelope ID: 7996FC51D-67137-813137-81 FC-DFABFAD27A6A Final Audit Report Purpose and Scope Department of Licensing (DOL) auditors perform VLO Compliance Audits to confirm that DOL assets are safeguarded against loss from unauthorized use; that transactions are properly authorized, completed, and recorded; and legal requirements are met. DOL's aim is to strengthen the internal controls and reinforce the oversight functions of your office. Auditors collected the information used in this report from the auditee, DRIVES, and various units of DOL. Opinion Except as noted in this report, the areas reviewed appear to be functioning in accordance with state regulations and department policies and procedures. Important Terms Observation - Any discrepancy noticed during an audit. May result in a training opportunity or finding. Training Opportunity - Observation where additional, focused training is sufficient to protect DOL's goals. Minor Finding - Observation where notable management -led process changes are needed to protect DOL's goals. Major Finding - Observation where significant deficiencies in management controls jeopardized DOL's goals. Criteria - Policy, contract, or other source outlining DOL requirements and guidelines. Remedy - Auditor's suggested solution to correct current discrepancies. Corrective Action - Excerpt of auditee's plan to correct and prevent discrepancies. P a g e Docusign Envelope ID: 7996FC51D-67137-813137-81 FC-DFABFAD27A6A Year 2026 Overview Of the 9 areas this audit has reviewed: ► 7 audit areas had no findings. 2 audit areas had minor findings, but no major findings. ► 0 audit areas had one or more major findings. A. Business Standards Office Number 1301 The auditors reviewed signage, representation, adherence to deadlines, etc. No observations to report. B. Financials The auditors reviewed DOL agency account records, monthly reconciliations, reconciled registers, statements, deposits, etc. No observations to report. C. Inventory The auditors reviewed monthly inventory audits, adjusted inventory activities, inventory storage, accuracy of inventory tracking, etc. 1. Minor Finding Observation Four out of 58 reviewed, adjusted inventories do not have a note: • Passenger Standard Plate, Inventory I D# CVM5306, 01 /27/2026 • R26 Regular Tab, Inventory Id# S446305, 06/13/2025 • R26 Regular Tab, Inventory Id# S446034106/25/2025 • R27 Regular Tab, Inventory Id## S409277, 01/27/2026 Thirteen out of 58 adjusted inventory notes do not include circumstance of discovery: • R26 Regular Tab, S459870, 08/12/2025, "Tab damaged19 • R27 Regular Tab, S408970, 01 /09/2026, "Tab previously issued, is not in inventory" • Passenger Standard Plate, CVM5244, 01/09/2026, "plate missing from box" • World War II American Campaign Medal, 13658253040, 06/26/2025, "Fine counting inventory — 1 ribbon is missing" c Docusign Envelope ID: 7996FC5D-67B7-8BB7-81 FC-DFABFAD27A6A • R26 — Regular Tab, Z203452, 12/05/2025, "Tab missing in inventory" • R26 — Regular Tab, Z206679, 04/01/2026, "Registration and Tabs misplaced" • R27 — Regular Tab, S413863, 03/18/2026, "tab missing from box" • R26 — Regular Tab, S425554, 05/15/2025, "Tab missing from box" • R27 — Regular Tab, S411697, 03/03/2026, "tab missing from box" • R26 — Regular Tab, S426963, 05/29/2025, "tab missing from box" • R26 — Regular Tab, S425170, 05/15/2025, "tab is missing from the box" • R27 — Regular Tab, S408402, 01/16/20267 "missing from box" • R26 — Regular Tab, Z204918, 12/29/2025, "Tab missing from box" Criteria VLO Directive 06.A.001 Managing Inventory VLOs must enter a detailed note in DRIVES when changing status to Damaged, Missing, or Stolen. Note must include circumstances of discovery. Remedy If known, update note for each item. Review DRIVES Help Article VLO — Required Notes and Location for requirements and ensure to enter detailed notes on each adjusted inventory item. Corrective Auditee submitted the following corrective action plan: Action Describe training completed: leted: • All VI -Rs were informed of these findings. • VLR's were required to review DRIVES Help article VLO — Required Notes and Location, DRIVES Help article VLO — Inventory, and Policy & Procedure (VLO Directives) — POL: 14.6.001 Adding Notes in DRIVES. • In addition to the training material listed above, the VLO Supervisor has also reviewed Policy & Procedure (VLO Directives) — POL: 06.A.001 Managing Inventory. Describe in detail all actions taken: • The four inventory items listed above as adjusted inventory without notes, have been corrected. These inventory items were used in IVT/IVR transactions and have notes pertaining to the activity on the office dashboard per VVO's instructions. VI -Rs have been instructed to ensure notes are placed on the inventory item itself as well as where VVO instructs notes to be placed. • The 58 adjusted inventory notes listed as lacking circumstance of discovery have been reviewed by the VI -Rs responsible for adjusting the inventory item. They have adjusted any note they can 4Page Docusign Envelope ID: 7996FC51D-67137-813137-81 FC-DFABFAD27A6A recall additional details for and will ensure all future notes include required elements as directed by DOL. Describe follow-up plan to ensure future compliance: VLO supervisor will ensure all notes are placed in the correct location and written in the correct format by reviewing the Adjusted Inventory Activity report monthly. Any findings will result in immediate action. D. Monitoring The auditors reviewed monitoring standards, completion of monitoring trackers, etc. 1. Training Opportunity Observation A spot check of the Value Exception Report monitoring tracker found that a noted discovery should not have been a discovery. Discovery for record YDV38129K223 indicated "Did not include value source." VLO -Fair Market Value (FMV) and Automated Valuing System (AVS), Fair Market Value vs. Purchase Price Rules provides a vessel workaround when a vessel FMV is less than $7500. The VLR followed the workaround correctly by selecting DOL Approved and leaving the required note. Criteria VLO Directive 08.A.001 Monitorinq Vehicle Licensing Offices VLOs must ensure that all services are performed accurately and properly in accordance with law, rule, policies, procedures, tasks, appendices, and the Agreement. Remedy Correct the monitoring tracker. Work with Vehicle and Vessel Operations (VVO) for guidance and/or training. E. Retention The auditors reviewed various categories of retained documents, Federal Heavy Vehicle Use Tax (FHVUT) records, etc. 1. Training Opportunity 5 1 P a g e Docusign Envelope ID: 7996FC5D-67B7-8BB7-81 FC-DFABFAD27A6A Observation VLO did not provide requested Standard Trailer Plates 79446AH from 09/15/2022 upon request. Criteria DRIVES Help Article VLO - Retention and Destruction DAN 23-10-69699 - Retain all records relating to vehicle and vessel licensing and registrations in your office for 6 years after registration issued, then destroy. Remedy Make sure to retain per VLO - Retention and Destruction. 2. Training Opportunity Observation Multiple FHVUT Form 2290s from 2025 and 2026 did not have a watermark, a clear watermark, or other acceptable proof of payment. Criteria DRIVES Help Article VLO - Federal Heavy Vehicle Use Tax Acceptable Forms of Proof of Payment: • A copy of a 2290 (Schedule 1) that is stamped by the IRS including the date received for the current tax period • A copy of a Form 2290 (Schedule 1) that has the IRS e-file watermark including the date received The copy must have the IRS stamp or e-file watermark clearly visible. Substitute Proof of Payment: If the receipted Schedule 1 has been lost or cannot be obtained, the IRS considers the following as sufficient proof of payment of tax due: • A copy of a Form 2290 (Schedule 1) with a Form 2290 and an emailed proof of payment or printed receipt from the Electronic Federal Tax Payment System (EFTPS). • A copy of a Form 2290 (Schedule 1) with a Form 2290 and a copy of the front and back of a cancelled check from the customer's bank. • A copy of a Form 2290 (Schedule 1) with a Form 2290 and a bank statement showing the amount of tax paid. • A copy of a Form 2290 (Schedule 1) with a Form 2290 and an IRS printout of the taxpayer's account showing the amount of tax paid. Remedy Make sure watermarks are visible or acceptable proof of payment is attached before accepting Form 2290. _ 6�Page Docusign Envelope ID: 7996FC51D-67137-813137-81 FC-DFABFAD27A6A F. Security The auditors reviewed security of system access, inventory, funds, personal identifiable information (P11), state assets, etc. No observations to report. C. Standards of Conduct The auditors reviewed internal manager's conflict of interest review, etc. 1e Minor Finding Observation The following vehicles were not listed on the conflict -of -interest review form: • drice1301: VIN# 60019127 is non-VLR owned vehicle at VLR address • Ibucha1301: VIN# N2001084 was registered in VLR's name; VIN# CB52D292 (WN4948RD) was registered in VLR's name Criteria VLO Directive 02.13.008 Conducting Conflict of Interest Review Locates active records of interest (e.g. records belonging to self, known family/friends/businesses, or sharing an address). Note: Records expired for more than 12 months are not considered active. Remedy Review and document missed personal interest records for drice1301 and Ibucha1301. Document appropriate actions taken if discoveries are found. Make sure to list and review all records in VLR's name, and/or address. Corrective Auditee submitted the following corrective action plan: Action Describe training completed: p • All VLR's were informed of this finding and required to review Policy & Procedure (VLO Directives) — POL: 11.C.001 Ethics. • In addition to the training material listed above, the VLO Supervisor has also reviewed Policy & Procedure (VLO Directives) — TSK: 02.13.008 Conducting Conflict of Interest Review Instructions Describe in detail all actions taken: • All records that were initially missed have been reviewed and documented as required. There were no findings that needed to be documented and no action was necessary. Describe follow-up plan to ensure future compliance: 7 1 P a g e Docusign Envelope ID: 7996FC51D-67137-813137-81 FC-DFABFAD27A6A • VLO Supervisor will review all records in accordance with Policy & Procedure (VLO Directives) — TSK: 02.6.008 Conducting Conflict of Interest Review and Instructions at the start of conducting the Conflict -of -Interest portion of the Preaudit. In addition to this, VLO Supervisor will also request Reviewer #2 examine each list of records to ensure all requirements are met. H. Training The auditors reviewed annual training of all VLRs, new VLR trainings, etc. No observations to report. 1. Subagent Audits The auditors reviewed Subagent audits. 1. Training Opportunity Observation V01308 and V01311 Final Subagent audit reports do not address notes that lack of circumstance of discovery for missing and damaged inventory. Criteria VLO Directive 06.A.001 Managing Inventory VI -Os must enter a detailed note in DRIVES when changing status to Damaged, Missing, or Stolen. Note must include circumstances of discovery. Remedy Make sure to review for detailed notes that include circumstance of discovery. Review DRIVES Help Article VLO — Required Notes and Location for requirements. Audit Conducted By Financials Auditor Operations Auditor Carol Marie Andrew Corinne Ambrose 8�Page