Each year, our Office conducts a financial statement audit of the state of Washington and more than 850 financial audits of individual state agencies and local governments, as well as institutions of higher education. While every local government in the state receives an accountability audit, only governments with more than $2 million in annual revenues are required to receive a financial audit.
Financial audits examine the financial statements prepared by the state agency or local government; we then issue an independent opinion on whether the statements fairly present the government's financial position and results of operations.
The value of an independent financial audit
Government officials are responsible for oversight of the government's finances. Financial statements are a means of demonstrating accountability for its assets, liabilities, revenues and expenditures. Financial statements are also a means of communicating a government's financial position and results of operations to the general public.
Financial statements can help answer many key questions about a government, such as:
- How much funding was received during the year, and from what sources?
- How much resources were expended during the year, and on what?
- How much resources were available for use at the beginning of the year?
- Did the government's financial condition improve, stay the same, or decline?
- Are government operations sustainable at the current level?
- How does the government's financial condition or spending compare to previous years or other governments?
An independent financial audit provides assurance that this vital information is reliable. A financial audit is often necessary to receive grants, issue debt or secure lower interest rates on debt. But most important, the assurance of a financial audit provides a foundation for public accountability and reasoned, factual discussion of government operations.