Financial Statements Audit Report

Washington Counties Risk

Pool

For the period October 1, 2018 through September 30, 2020

Published July 22, 2021

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Report No. 1028783

Office of the Washington State Auditor

Pat McCarthy

July 22, 2021

Board of Directors

Washington Counties Risk Pool

Tumwater, Washington

Report on Financial Statements

Please find attached our report on the Washington Counties Risk Pool’s financial statements.

We are issuing this report in order to provide information on the Pool’s financial condition.

Sincerely,

Pat McCarthy, State Auditor

Olympia, WA

Americans with Disabilities

In accordance with the Americans with Disabilities Act, we will make this document available in

alternative formats. For more information, please contact our Office at (564) 999-0950, TDD

Relay at (800) 833-6388, or email our webmaster at webmaster@sao.wa.gov .

Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (564) 999-0950  Pat.McCarthy@sao.wa.gov

TABLE OF CONTENTS

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed in Accordance with

Government Auditing Standards..................................................................................................... 4

Independent Auditor's Report on the Financial Statement s ............................................................ 6

Financial Section............................................................................................................................. 9

About the State Auditor's Office................................................................................................... 43

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INDEPENDENT AUDITOR’S REPORT

Report on Internal Control over Financial Reporting and on Compliance and Other

Matters Based on an Audit of Financial Statements Performed in Accordance with

Government Auditing Standards

Washington Counties Risk Pool

October 1, 2018 through September 30, 2020

Board of Directors

Washington Counties Risk Pool

Tumwater, Washington

We have audited, in accordance with auditing standards generally accepted in the United States of

America and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States, the financial statements of the

Washington Counties Risk Pool, as of and for the years ended September 30, 2020 and 2019, and

the related notes to the financial statements, which collectively comprise the Pool’s basic financial

statements, and have issued our report thereon dated July 8, 2021.

As discussed in Note 13 to the financial statements, the full extent of the COVID-19 pandemic’s

direct or indirect financial impact on the Pool is unknown.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing our audits of the financial statements, we considered the Pool’s internal

control over financial reporting (internal control) to determine the audit procedures that are

appropriate in the circumstances for the purpose of expressing our opinions on the financial

statements, but not for the purpose of expressing an opinion on the effectiveness of the Pool’s

internal control. Accordingly, we do not express an opinion on the effectiveness of the Pool’s

internal control.

A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to prevent,

or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a

combination of deficiencies, in internal control such that there is a reasonable possibility that a

material misstatement of the Pool’s financial statements will not be prevented, or detected and

corrected on a timely basis. A significant deficiency is a deficiency, or a combination of

deficiencies, in internal control that is less severe than a material weakness, yet important enough

to merit attention by those charged with governance.

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Our consideration of internal control was for the limited purpose described in the first paragraph

of this section and was not designed to identify all deficiencies in internal control that might be

material weaknesses or significant deficiencies. Given these limitations, during our audit we did

not identify any deficiencies in internal control that we consider to be material weaknesses.

However, material weaknesses may exist that have not been identified.

COMPLIANCE AND OTHER MATTERS

As part of obtaining reasonable assurance about whether the Pool’s financial statements are free

from material misstatement, we performed tests of the Pool’s compliance with certain provisions

of laws, regulations, contracts and grant agreements, noncompliance with which could have a

direct and material effect on the determination of financial statement amounts. However, providing

an opinion on compliance with those provisions was not an objective of our audit, and accordingly,

we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance or other matters that are required

to be reported under Government Auditing Standards.

PURPOSE OF THIS REPORT

The purpose of this report is solely to describe the scope of our testing of internal control and

compliance and the results of that testing, and not to provide an opinion on the effectiveness of the

Pool’s internal control or on compliance. This report is an integral part of an audit performed in

accordance with Government Auditing Standards in considering the Pool’s internal control and

compliance. Accordingly, this communication is not suitable for any other purpose. However, this

report is a matter of public record and its distribution is not limited. It also serves to disseminate

information to the public as a reporting tool to help citizens assess government operations.

Pat McCarthy, State Auditor

Olympia, WA

July 8, 2021

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INDEPENDENT AUDITOR’S REPORT

Report on the Financial Statements

Washington Counties Risk Pool

October 1, 2018 through September 30, 2020

Board of Directors

Washington Counties Risk Pool

Tumwater, Washington

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of the Washington Counties Risk Pool,

as of and for the years ended September 30, 2020 and 2019, and the related notes to the financial

statements, which collectively comprise the Pool’s basic financial statements as listed on page 9.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements

in accordance with accounting principles generally accepted in the United States of America; this

includes the design, implementation, and maintenance of internal control relevant to the

preparation and fair presentation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audits. We

conducted our audits in accordance with auditing standards generally accepted in the United States

of America and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States. Those standards require that

we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the Pool’s preparation and fair presentation of the financial statements in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the Pool’s internal control. Accordingly, we express no such

opinion. An audit also includes evaluating the appropriateness of accounting policies used and the

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reasonableness of significant accounting estimates made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects,

the financial position of the Washington Counties Risk Pool, as of September 30, 2020 and 2019,

and the changes in financial position and cash flows thereof for the years then ended in accordance

with accounting principles generally accepted in the United States of America.

Matters of Emphasis

As discussed in Note 13 to the financial statements, the full extent of the COVID-19 pandemic’s

direct or indirect financial impact on the Pool is unknown. Our opinion is not modified with

respect to this matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the

management’s discussion and analysis and required supplementary information listed on page 9

be presented to supplement the basic financial statements. Such information, although not a part

of the basic financial statements, is required by the Governmental Accounting Standards Board

who considers it to be an essential part of financial reporting for placing the basic financial

statements in an appropriate operational, economic or historical context. We have applied certain

limited procedures to the required supplementary information in accordance with auditing

standards generally accepted in the United States of America, which consisted of inquiries of

management about the methods of preparing the information and comparing the information for

consistency with management’s responses to our inquiries, the basic financial statements, and

other knowledge we obtained during our audit of the basic financial statements. We do not express

an opinion or provide any assurance on the information because the limited procedures do not

provide us with sufficient evidence to express an opinion or provide any assurance.

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Supplementary and Other Information

Our audits were conducted for the purpose of forming opinions on the financial statements that

collectively comprise the Pool’s basic financial statements as a whole. The List of Participating

Members and DES Schedule of Expenses are presented for purposes of additional analysis and are

not a required part of the basic financial statements. Such information has not been subjected to

the auditing procedures applied in the audit of the basic financial statements and, accordingly, we

do not express an opinion or provide any assurance on it.

OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING

STANDARDS

In accordance with Government Auditing Standards, we have also issued our report dated July 8,

2021 on our consideration of the Pool’s internal control over financial reporting and on our tests

of its compliance with certain provisions of laws, regulations, contracts and grant agreements and

other matters. The purpose of that report is to describe the scope of our testing of internal control

over financial reporting and compliance and the results of that testing, and not to provide an

opinion on internal control over financial reporting or on compliance. That report is an integral

part of an audit performed in accordance with Government Auditing Standards in considering the

Pool’s internal control over financial reporting and compliance.

Pat McCarthy, State Auditor

Olympia, WA

July 8, 2021

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FINANCIAL SECTION

Washington Counties Risk Pool

October 1, 2018 through September 30, 2020

REQUIRED SUPPLEMENTARY INFORMATION

Management’s Discussion and Analysis – 2020 and 2019

BASIC FINANCIAL STATEMENTS

Statement of Net Position – 2020 and 2019

Statement of Revenues, Expenses and Changes in Net Position – 2020 and 2019

Statement of Cash Flows – 2020 and 2019

Notes to Financial Statements – 2020 and 2019

REQUIRED SUPPLEMENTARY INFORMATION

Schedule of Proportionate Share of Net Pension Liability – PERS 1 & PERS 2/3 – 2020

and 2019

Schedule of Employer Contributions – PERS 1 & PERS 2/3 – 2020 and 2019

Ten Year Claims Development Information – 2020 and 2019

Notes to the Required Supplementary Information – 2020 and 2019

SUPPLEMENTARY AND OTHER INFORMATION

List of Participating Members – 2020 and 2019

DES Schedule of Expenses – 2020 and 2019

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WASHINGTON COUNTIES RISK POOL

2558 R.W. Johnson Road SW, Suite 106

Tumwater, WA 98512-6103

Created by Counties for Counties

Management’s Discussion &Analysis

The Washington Counties Risk Pool (WCRP) management provides this discussion and analysis for the Pool’s

financial activities following the conclusion of its 30^thFiscal Year (FY), ending September 30, 2020. The information

in this discussion and analysis should be considered in conjunction with that in the financial statements and

accompanying notes to understand WCRP’s financial position.

WCRP has no other component units for which it is financially accountable. It operates as an enterprise fund and uses

the accrual accounting basis in accordance with the U.S. generally accepted accounting principles. This fund type is

used for ‘business type activities’ that are intended to recover all or a significant portion of their costs through user

fees and charges. Revenues are recognized when earned and expenses are recognized when incurred.

WCRP’s operating revenues consist mostly of assessments paid by its member counties. Its operating expenses consist

primarily of payments made to resolve claims, including allocated loss adjustment expenses, and for premiums for

reinsurances and excess liability, property and cyber risk/security insurance policies acquired from superior-rated

commercial carriers.

Discussion of the Financial Statements: The basic financial statements are comprised of two components:

the financial statements and the notes to those financial statements. WCRP’s three financial statements in a condensed

format are presented hereafter with three-year comparative data.

The Statement of Net Position presents information on an entity’s assets, liabilities, deferred outflows, and deferred

inflows at fiscal year-end with the difference between them reported as Net Position.

Fiscal Years Ending

09/30/2019

COMPARATIVE STATEMENT OF

NET POSITION

09/30/2018

$50,608,380

09/30/2020

$60,170,143

Current Assets

Capital Assets (Net)

Total Assets

$59,790,227

830,805

$60,621,032

888,983

$51,497,362

806,790

$60,976,933

Total Deferred Outflows of Resources

$73,362

$62,516

$79,983

Current Liabilities

Non-Current Liabilities

Total Liabilities

$21,734,298

9,813,450

$31,547,748

$27,234,025

13,427,677

$40,661,702

$19,739,420

16,470,931

$36,210,351

Total Deferred Inflows of Resources

$172,796

$190,465

$116,425

Investment in Capital Assets

$888,983

$830,805

$806,790

Unrestricted Net Position

18,961,197

19,000,532

23,923,351

Total Net Position

$19,850,179

$19,831,381

$24,730,141

Page 10

Analysis:

The WCRP’s ending Net Position saw a significant year-over-year increase of $4,898,758 between year-end 2019

and year-end 2020. While the Pool’s assets increased by a modest $355,904, the increase in net position was largely

due to a reduction in the Pool’s current and non-current liabilities. This reduction was the result of actuarial

adjustments to current and prior year loss projections, meaning the projections have been reduced in both prior and

current years, based on favorable loss trends and claim resolutions.

The Statement of Revenues, Expenses and Changes in Net Position presents details of an entity’s revenues and

expenses during a fiscal year that resulted in the reported Change in Net Position — an increase in net position is the

result of revenues exceeding expenses, while a decrease in net position results when revenues are less than expenses.

COMPARATIVE STATEMENT OF REVENUES,

EXPENSES AND CHANGES IN NET POSITION

Operating Revenues

FY-2018

FY-2019

FY-2020

Member MLC Assessments

Member Cyber Assessments

Member WCPP Assessments

Operating Revenues – Miscellaneous

Total Operating Revenues

Non-Operating Revenues

Interest Income

$12,480,319

102,264

2,658,361

225,770

$16,062,464

138,060

2,809,340

991

$18,107,737

187,980

4,206,701

25,000

$15,466,714

$19,010,855

$22,527,418

$374,604

46,263

8,813

$615,889

43,824

$661,954

21,056

5,300

468,335

Rental Income

Gain on Capital Asset Disposition

Fair Value Adjustment of Investments

Total Non-Operating Revenues

Total Revenues

399,134

$1,058,847

$20,069,702

$429,580

$15,896,294

$1,156,645

$23,684,063

Operating Expenses

Adjustments to (MLC) Claims/ULAE Reserves

Premiums for MLC Insuring Policies

Premium for Cyber Insurance Policy

Premiums for Property Insurance Policies

Depreciation, Bad Debt & Administrative Expenses

Total Operating Expenses

$4,682,976

4,570,539

102,264

2,508,363

2,135,710

$13,999,852

$9,636,960

5,180,310

163,060

2,669,207

2,433,336

$20,082,873

$7,929,680

4,490,650

177,083

3,664,924

2,542,880

$18,783,205

Non-Operating Expenses

Rental Expense

$5,940

188,646

$194,586

$5,627

0

$5,627

$2,100

Fair Value Adjustment on Investments

Total Non-Operating Expenses

Total Expenses

$2,100

$18,781,105

$14,194,438

$20,088,500

Changes in Net Position

$1,701,857

$18,148,322

$(18,798)

$19,850,179

$4,898,758

$19,831,383

Beginning Net Position (October 1^st)

Prior Period Adjustment

Ending Net Position (September 30^th)

$19,850,179

$19,831,381

$24,730,141

Analysis: Between year-end 2019 and year-end 2020, member WCPP (Property) Assessments increased by

$1,397,361 due to an increase in premiums paid to insurers, while the MLC Assessments increased by $2,045,273,

due to an increase in overall costs, reinsurance and excess premium increases, as well as the Board’s decision to budget

an additional $1,000,000 in an effort to further improve the Pool’s Net Position. These increases in revenue were

offset by expenses that saw a year-over-year decrease of $1,286,475, with the result being a significant improvement

in the Pool’s already strong Net Position.

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WCRP 2019-20 Year-End

Management Discussion & Analysis

Page 3

Overall Analysis of Financial Position and Result of Operations:

The WCRP increased its Self-Insured Retention (SIR) to $2M, up from the $1M SIR carried in the 2018-19 Fiscal

Year. This increased SIR increases the Pool’s exposure and uncertainty, requiring a continued thoughtful and targeted

funding approach. In last year’s Management Discussion it was noted that ”The Pool believes the timing of increasing

our self-insured retention, with the funds for losses being retained rather than paid out in reinsurance and excess

premiums, coupled with our concerted efforts to drive down liabilities, is ideal.” In only a single year’s passing with

this philosophy and strategy, the WCRP’s leadership and governing body feels confident that this approach was the

correct one. We continue to feel the need to increase our Net Position in order to sustain the WCRP’s large Self-

Insured Retention for the long-term.

The Pool continues to remain confident in its financial position, financial practices, claim handling, and in its

investment strategy and performance. Appropriate reserve estimates were included within the Pool’s FY2020

financials for any such matter stemming from liability claim against a member county. The WCRP anticipates

continued success and favorable outcomes of cases currently pending.

Similar to the immediately preceding years, member assessments increased in the 2019-20 Fiscal Year, due to the

market fluctuation and both general and WCRP-specific loss trends. However, the WCRP continues to focus on its

ongoing goal of stable rates and maintaining an unrestricted Net Position that continues to meet the solvency

requirements established by the State under Washington Administrative Code (WAC) 200-100, and continues to fall

within the funding target established by the WCRP Board of Directors.

Request for Information:

This MD&A is provided for those interested in a general overview of the financial operations of the Washington

Counties Risk Pool. Questions concerning the information provided and WCRP’s financial report, or requests for

additional information, should be addressed to: WASHINGTON COUNTIES RISK POOL, Attn: Executive Director,

2558 R W Johnson Rd SW, Suite 106, Tumwater, WA, 98512-6103; or by telephone at (360) 292-4500.

Page 12

WASHINGTON COUNTIES RISK POOL

STATEMENT OF NET POSITION

ASSETS:

As of

9/30/2020

9/30/2019

CURRENT ASSETS:

Cash and Cash Equivalents

Investments

Members' MLC Deductible Receivable

Excess/Reinsurance Recoverable

Members' MLC Assessments Receivable

Members' WCPP Assessments Receivable

Members' Cyber Assessments Receivable

Accrued Interest

$

14,834,602

44,146,130

502,122

551,557

-

$

6,265,147

46,034,399

460,948

743,516

4,174,411

1,946,956

36,150

-

112,271

22,250

1,211

96,279

30,231

2,190

Prepaid Expenses

Other Accounts Receivables

TOTAL CURRENT ASSETS

$

60,170,143

$

59,790,227

NONCURRENT ASSETS:

Capital Assets (Net of Accumulated Depreciation)

$

806,790

60,976,933

79,983

$

830,805

60,621,032

62,516

TOTAL ASSETS

$

TOTAL DEFFERED OUTFLOWS RELATED TO PENSIONS

LIABILITIES:

CURRENT LIABILITIES:

Claims Reserves :

"SIR" Reserves

Open Claims - SIR Reserves

Open Claims - Corridor Reserves

Property Reserves

$2,622,266

3,225,166

183,012

$

1,143,330

3,232,620

-

Compensated Absences

Accounts Payable

Unearned Revenue - Members Assessments

14,560

211,419

13,482,998

9,575

122,672

22,725,827

TOTAL CURRENT LIABILITIES

$

19,739,420

$

27,234,024

NON CURRENT LIABILITIES

CLAIMS Reserves:

"SIR" Reserves

Open Claims - SIR Reserves

IBNR Reserve - IBNR

Open Claims - Corridor Reserves

IBNR Reserves -IBNR

Reserve for ULAE

Compensated Absences

Net Pension Liability -- GASB 68

$1,063,227

10,651,662

3,382,368

168,025

883,622

58,236

$

321,942

7,054,724

-

4,807,037

955,274

43,590

263,791

245,110

TOTAL NON CURRENT LIABILITIES

TOTAL LIABILITIES

$

16,470,931

36,210,351

116,425

$

13,427,677

40,661,701

190,465

TOTAL DEFERRED INFLOWS RELATED TO PENSIONS

NET POSITION:

Unrestricted Net Position

Net Investment in Capital Assets

$

23,923,351

806,790

$

19,000,576

830,805

$

24,730,141

$

19,831,381

TOTAL NET POSITION

The accompanying notes are an integral part of thĞƐĞ financial statements

Page 13

WASHINGTON COUNTIES RISK POOL

STATEMENT OF REVENUES AND EXPENSES

AND CHANGES IN NET POSITION

As of

OPERATING REVENUES:

9/30/2020

9/30/2019

Members' Assessments -- MLC

Members' Assessments -- WCPP

Cyber/Terrorism Coverage

Other Operating Income

$

18,107,737

4,206,701

187,980

25,000

22,527,418

$

16,062,464

2,809,340

138,060

991

Total Operating Revenues

19,010,855

OPERATING EXPENSES:

Current Year's "SIR" Expense - MLC

Current Year's "1st/2nd Layers Corridor" Expense

Current Year's "SIR" Expense - Property

Claims Expense Prior Years' SIR

Claims Expense Prior Years' 1st/2nd Layers Corridor

Claims Expense Current Years' Property SIR

Adjustment in Reserve for ULAE

Adjustment of Prior Year's 8X2 10% Quota Share"

MLC Reinsurance Premiums/Excess

WCPP Insurance Premiums

Cyber/Terrorism Liability Premiums

Depreciation Expense

$

9,804,000

-

$

7,269,000

1,739,000

-

(230,518)

940,802

725,000

(1,967,593)

(235,075)

(325,000)

(71,652)

-

4,490,655

3,664,924

177,083

75,102

(21,324)

(60,000)

5,180,310

2,669,207

163,060

73,244

Operating Expenditures

2,445,762

18,783,205

2,360,092

20,082,873

Total Operating Expenses

$

OPERATING INCOME

3,744,213

(1,072,018)

NON OPERATING REVENUES (EXPENSES)

Interest Income

Rental Income

Rental Expense

Gain (Losses) on Capital Assets Disposition

Adjustment to Investments

Total Nonoperating Revenues (Expenses)

$

661,954

21,056

(2,100)

5,300

468,335

1,154,545

$

615,889

43,824

(5,627)

-

399,134

1,053,220

$

CHANGES IN NET ASSETS

TOTAL NET POSITION, Beginning of Year

4,898,758

19,831,383

24,730,141

(18,798)

19,850,178

19,831,383

TOTAL NET POSTION, as of September 30th

The accompanying notes are an integral part of thĞƐĞ financial statements

Page 14

WASHINGTON COUNTIES RISK POOL

STATEMENT OF CASH FLOWS

MCAG NO. 0774

For the Fiscal Years Ended September 30, 2020 and 2019

Year Ended

9/30/2020

Year Ended

9/30/2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from Members & Insurers

Cash payments for goods and services

Cash payments to employees for services

$

19,593,869

(12,9ϲϰ,ϭϰϮ)ꢀ (11,199,944)

(1,0ϱϰ͕ϲϵϰ)

$

29,627,851

(902,799)

Net Cash Provided (Used) by Operating Activities

5,ϱϳϱ͕Ϭϯϳ

$

17,525,108

CASH FLOW FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Purchase of Equipment & Building

Gain on the Sale of Surplus

Cash from Rental of Office (net)

$

(51,086)

5,300

18,956

$

(15,067)

38,197

23,130

Net Cash Provided (Used) from Capital and Related Financing Activities

(26,830)

CASH FLOW FROM INVESTING ACTIVITIES:

Proceeds from Sale and Maturities of Investments

Interest/Accrued Income

468,335

645,962

399,134

569,971

$

Net Cash Provided (Used) by Investing Activities

1,114,297

969,105

Increase (Decrease) in Cash and Cash Equivalents

$

ꢀ6͕ϲϲϮ͕ϱϬϰ

52,299,545

5ϴ͕ϵϲϮ͕Ϭϰϵ

$

18,517,343

33,782,202

52,299,545

Cash and Cash Equivalents - Beginning of the Year

Cash and Cash Equivalents (including restricted) - End of the Year

Year Ended

9/30/2020

Year Ended

9/30/2019

RECONCILIATION OF OPERATING INCOME TO NET CASH

PROVIDED (USED) BY OPERATING ACTIVITIES

OPERATING INCOME

$

3,7ϰϰ͕Ϯϭϯꢀ

$

(1,072,018)

Adjustments to Reconcile Net Operating Income to Net

Cash provided (used) by Operating Activities:

Depreciation Expense

75,102

6,309,281

6,000,170

0

(1,264,099)

(71,652)

(9,242,829)

88,746

73,244

6,901,033

6,082,618

(60,000)

(534,797)

(21,324)

3,715,963

76,315

(90,844)

Decrease (Increase) in Accounts Receivable

Increase (Decrease) in "SIR" Reserves

Increase (Decrease) in "8x2 10% Quota Share" Reserve

Increase (Decrease) in "1st/2nd Layers' Corridor" Reserves

Increase (Decrease) in Reserve for ULAE

Increase (Decrease) in Unearned Revenue

Increase (Decrease) in Accounts Payable

Increase in Pension Liability (Net)

(ϵϭ͕ϱϬϳ)

19,631

7,981

Increase (Decrease) in Accrued Liabilities

Increase (Decrease) in Prepaid Expenses

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES

(25,462)

2,480,382

17,525,108

$

5,ϱϳϱ͕Ϭϯϳ

$

The accompanying notes are an integral part of thĞƐĞ financial statements

Page 15

October 1, 201ꢀ Thru September 30, 2020

These notes are an integral part of the accompanying financial statements.

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Washington Counties Risk Pool (WCRP) have been prepared in conformity

with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board

(GASB) is the accepted standard setting body for establishing governmental accounting and financial

principles. The significant accounting policies are described below.

A.

Reporting Entity

The WCRP was formed by Interlocal Agreement in August 1988 pursuant to Chapters 48.62 and

39.94 Revised Code of Washington (“RCW”).

The WCRP is governed by its 26-member Board of Directors with a President, Vice-President,

and Secretary/Treasurer serving as its annually elected officers. The WCRP Board meets three

times each year at its Spring Conference & Board Meeting, Fall Conference & Board Meeting,

and its Summer Annual Conference & Board Meeting. The WCRP’s Executive Committee,

consisting of 11 members of the Board of Directors, meet four to six times each year for general

Pool administration and oversight.

Through the Executive Director, the Pool’s 12-member staff carries out of the mission and

directives of the Board of Directors. The Finance & Operations Department handles day-to-day

operations and administration of the Pool, the Risk & Claims Department provides risk

management support to the Pool and to its member counties, and manages all liability claims

brought against member counties, while the Member Services Department provide the various

training, scholarships, conference and event planning, and other educational resources to

participating members.

Annual deposit assessments are adjusted to incorporate actuarial projections and operational

needs, and then approved by the (WCRP) Board of Directors at their Annual Meeting. If the

Pool’s assets were depleted, members would be responsible for outstanding liabilities of the

WCRP.

B.

Basis of Accounting and Presentation

The accounting records of the WCRP are maintained in accordance with methods prescribed by

the State Auditor’s Office under the authority of Chapter 43.09, RCW. The WCRP also follows

the accounting standards established by the Governmental Accounting Standards Board (GASB)

Statement 10, Accounting and Financial Reporting for Risk Financing And Related Insurance

Issues, as amended by GASB Statement 30, Risk Financing Omnibus, and GASB Statement 31,

Accounting and Financial Reporting for Certain Investments and for External Investment Funds.

The WCRP uses the full-accrual basis of accounting where revenues are recognized when earned

and expenses are recognized when incurred. Capital asset purchases are capitalized, and long-

term liabilities are accounted for within the financial statements.

The principal operating revenues of the WCRP are member assessments, while its operating

expenses include both claims paid from current year’s allowances and adjustments to prior year’s

reserves, premiums for reinsurances and excess, property, terrorism and cyber risk insurances, and

the Pool’s administrative expenses.

Page 16

October 1, 201ꢀ Thru September 30, 2020

C.

Assets, Liabilities and Net Position

1.

Cash and Cash Equivalents

For the purposes of the Statement of Cash Flows, the WCRP considers all highly liquid

investments with maturities of three months or less when purchased to be cash

equivalent.

2.

3.

Capital Assets and Depreciation

See Note 6, Capital Assets

Receivables

Amount owing from members and reinsurers for deductibles are identified on the

Statement of Net Position.

Accrued Interest Receivable is the amount earned on investment at the end of the fiscal

year.

The WCRP Board of Directors, acting through its Executive Committee, decides if any

accounts are deemed uncollectible. Uncollectible accounts are charged to expense in the

period they are deemed uncollectible.

4.

5.

Investments

See Note 2, Deposits and Investments.

Compensated Absences

Compensated absences are absences for which the employees will be paid such as annual

and sick leave. The WCRP records accrued leave for compensated absences as an

expense and liability when incurred.

Annual Leave may be accumulated up to 30 days and is payable upon resignation,

retirement, or death. An employee with more than sixty days sick leave accrued may

convert the days earned in the previous year (less any sick leave days used in that year)

to annual leave days at the rate of four days of sick leave for one day of annual leave.

Sick leave may accumulate up to 130 days. Sick leave does not vest until death or

retirement, and the accrued liability is booked at one-half of the amount earned.

6.

Unpaid Claim Liabilities

The WCRP establishes claims liabilities based upon independent actuarial estimates of

the ultimate losses (costs of claims), including future claims adjustment expenses for

claims/lawsuits that have been reported but are not settled, and for claims that have been

incurred but are not yet reported. The length of time for which such costs must be

estimated varies depending on the coverage type involved. Estimated amounts of

salvage and subrogation and reinsurance recoverable on unpaid claims are deducted from

the liability for unpaid claims. Because actual claims costs depend on such complex

factors as inflation and changes in doctrines of legal liability and in damage awards, the

Page 17

October 1, 201ꢀ Thru September 30, 2020

process used in computing claims liabilities does not necessarily result in an exact

amount, particularly general liability coverage.

Claims liabilities are actuarially recomputed and incorporate the current case reserves on

files, which incorporates the Jury Verdict Value processes. The actuary uses a variety of

techniques and formulas that reflect recent settlements, claims frequencies, and other

economic and social factors to produce current estimates. A provision for inflation in the

calculation of estimated future claims costs is implicit in the calculation because reliance

is placed both on actual historical data that reflects past inflation and on other factors that

are appropriate modifiers of experience. Adjustments to claims liabilities are charged or

credited to expense in the periods in which they are made.

7.

Reinsurance

The WCRP acquires reinsurance (agreements) to directly reduce its exposure to large

third-party liability losses and to indirectly reduce its (present and past) member

counties’ exposures to contingent liabilities. Reinsurance permits recovery of substantial

portions of the losses from commercial reinsurers, although it does not discharge the

primary liability of the WCRP (and its member counties by contingent liabilities) as the

direct insurer of the risks reinsured. The WCRP does not report reinsured risks as

liabilities unless it is probable that those risks will not be covered by reinsurers.

The cumulative to-date incurred loss amount deducted from claims liabilities as of

September 30, 2020, and 2019 as being reinsured were $144,653,489 and $135,228,443,

respectively. Premiums paid to reinsurers during 2020 and 2019 were $4,490,655 and

$5,180,310 respectively. The independent actuary’s estimate for the ceded reinsured

amount of gross loss reserves as of September 30, 2020, was $24,692,361.

8.

Member Assessments and Unearned Member Assessments

Member assessments are collected in advance and recognized as revenue in the period

for which the coverage is to be provided. On the balance sheet, member assessments

receivables were billed on or about September 1^stwith up to the amount equivalent to

100% of the prior year’s assessment being due by September 30^th, and any remaining

assessments balance(s) due by the following May 1st. The assessments calculated for

liability coverage were based in substantial part upon the members’ prior year’s worker

hours.

The assessments for property coverage were calculated based upon the values of the real

and personal properties scheduled by the participating counties. For FY 2019-20 and

following a significant increase in property premiums paid to insurers, along with a

revision to flood zoning exposures, the WCRP Board of Directors approved capping the

total property assessments at 100% of the prior Fiscal Year’s assessment.

Both the cyber and terrorism coverage assessments are divided evenly among the

members. Investment income is not presently considered for the determination of

member assessments.

9.

Unpaid Claims

Liability claims/lawsuits are charged to expenses as incurred. Claims reserves represent

the accumulation of estimates for reported, unpaid liability claims plus a provision for

liability claims incurred but not reported (IBNR). These estimates are continually

Page 18

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Page 19

October 1, 201ꢀ Thru September 30, 2020

WCRP funds on deposit as of September 30, 2020 and September 30, 2019 were as follows:

9/30/2020

9/30/2019

Wells Fargo (checking)

$14,834,602

$11,924,580

$5,627,084

$26,594,495

$58,980,761

$6,265,147

$14,788,235

$8,518,338

$22,727,826

$ 52,266,549

Washington State Investment Pool (LGIP)

Spokane County Investment Pool (SCIP)

US Bank Custodial Account

Total deposits and investments

B.

Investments:

2020 Concentration of Credit:

Average

Duration

Average

Maturity

Rating

Moody/Sp

Percent of

Portfolio

Issuer:

Cost

Market Value

Government of the

United States

Federal National

Mortgage Assoc.

Federal Home

$ 14,429,207

$ 3,848,957

$ 4,310,280

$ 2,733,756

$ 726,524

$ 14,739,510

$ 3,924,113

$ 4,448,034

$ 2,756,284

$ 726,524

1.58

1.61

1.82

1.81

2.36

0.00

Aaa AA+

Aaa AAA

55.42%

14.76%

16.73%

10.36%

2.73%

1.78

Loan Bank

1.76

Federal Home Loan

Mortgage Corp

First American

Govt Oblig Fund

2.32

0.00

2019 Concentration of Credit:

Average

Duratio

n

Market

Value

Average

Maturity

Rating

Moody/SP/Fitch

Percent of

Portfolio

Issuer:

Cost

Government of the

United States

Federal National

Mortgage Assoc.

Federal Home Loan

Bank

Federal Home Loan

Mortgage Corp

First American Govt

Oblig Fund

$12,402,174

$ 4,008,350

$ 3,790,235

$ 2,285,402

$12,489,391

$ 4,069,499

$ 3,798,619

$ 2,292,372

1.67

2.52

1.67

1.08

0.00

1.72

2.63

1.72

1.11

0.00

Aaa/ AA+/ AAA

54.95%

17.91%

16.71%

10.09%

0.34%

$

77,945

$

77,945

Investments Measured at Fair Value

WCRP’s measures and reports investments at fair value using the valuation input hierarchy established by

generally accepted accounting principles, as follows:

x

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: These are quoted market prices for similar assets or liabilities, quoted prices for identical

or similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets

that are not active, or other than quoted prices that are not observable;

x

Level 3: Unobservable inputs for an asset or liability.

At September 30, 2020 and 2019 WCRP had the following investments measured at fair value:

Page 20

October 1, 201ꢀ Thru September 30, 2020

Investments by Fair Value Level

Spokane County Investment Pool

U.S. Agencies

09/30/2020

$5,627,085

$11,128,431

$14,739,510

Level 1

Level 2

Level 3

$5,627,085

$11,128,431

$14,739,510

U.S. Treasuries

Total Investments measured at

Fair Value

$31,495,026

Investments at Amortized Cost

LGIP

Money Market Fund

$11,924,850

$726,524

Total Investments at Amortized Cost

$12,651,374

$44,146,400

Total Investments in Statement of Net Position

Investments by Fair Value Level

Spokane County Investment Pool

U.S. Agencies

09/30/2019

$ 8,518,338

$10,160,490

$12,489,391

Level 1

Level 2

Level 3

$ 8,518,338

$10,160,490

$12,489,391

U.S. Treasuries

Total Investments measured at Fair Value

$31,168,219

Investments at Amortized Cost

LGIP

$14,788,235

Money Market Fund

$

77,945

Total Investments measured at Amortized Cost

Total Investments in Statement of Net Position

$ 14,866,180

$ 46,034,399

Disclosure of Custodial Credit Risk

WCRP’s investment policy states that all security transactions shall be conducted on a delivery-versus-

payment (DVP) basis. Securities purchased by the Pool will be delivered against payment and held in a

custodial safekeeping account with the trust department of a bank. A third-party custodian will be

designated by the Executive Director and all transactions will be evidenced by safekeeping receipts.

Concentration of Credit Risk

Concentration Risk disclosure is required for all investments in any one issuer that represents 5% or more

of the Pool’s total investments, excluding investment pools and investments issued by the U.S.

government. No disclosure of concentration risk currently meets this requirement.

Interest Rate Risk

Interest rate risk is the risk that the portfolio value will fluctuate due to changes in the general level of

interest rates. The Pool recognizes that, over time, longer-term portfolios have higher volatility of return.

The Pool mitigates interest rate risk by providing adequate liquidity for short-term cash needs, and by

making longer-term investments only with funds that are not needed for current cash flow purposes. The

Pool has deposits of $8,518,338 with the Spokane County Investment Pool and $14,788,235 with the

Washington State Investment Pool that are available immediately. The Pool further recognizes that certain

types of securities will affect the interest rate risk profile of the portfolio differently in different interest rate

environments. The Pool restricts callable securities to a maximum of 20% of the portfolio, restricts

maximum maturity to 5 years, and constrains duration to plus or minus 20% of a market benchmark index

selected by the Investment Committee based on the Pool’s investment objectives, constrains and risk

tolerances.

Page 21

October 1, 201ꢀ Thru September 30, 2020

Investment in Local Government Investment Pool (LGIP)

The Washington Counties Risk Pool is a participant in the Local Government Investment Pool (LGIP).

The LGIP was authorized by Chapter 294, Laws of 1986 and is managed and operated by the Washington

State Treasurer. The State Finance Committee is the administrator of the statue that created the pool and

adopts rules. The State Treasurer is responsible for establishing the investment policy for the pool and

reviews the policies annually and proposed changes are reviewed by the LGIP advisory Committee.

Investments in the LGIP, a qualified external investment pool, are reported at amortized cost which

approximates fair value. The LGIP is an unrated external investment pool. The pool’s portfolio is invested

in a manner that meets the maturity, quality, diversification, and liquidity requirements set forth by the

GASBS 79 for external investment pools that elect to measure, for financial reporting purposes,

investments at amortized cost. The LGIP does not have any legally binding guarantees of share values.

The LGIP does not impose liquidity fess or redemption gates on participant withdrawals.

The Office of the State Treasurer prepares a stand-alone LGIP financial report. A copy of the report is

available from the Office of the State Treasurer, PO Box 40200, Olympia, WA 98504-0200, online at

http://www.tre.wa.gov.

NOTE 3 – JOINT SELF-INSURED RETENTION

WCRP retains complete responsibility for the payment of covered liability claims, both within its specified

self-insured retention limits and that provided under its reinsurance contracts. The coverage provided

under applicable excess insurance contracts is separately administered with assistance only from the

WCRP. During the past three fiscal years, the Pool has not approved a settlement that exceeded the

insurance coverage noted herein that is more specifically outlined in Note 5.

For 2019, the Pool’s SIR was $1,000,000 and included a corridor deductible which increased the SIR to

$2,000,000, however, with losses between $1,000,000 and $2,000,000 having an annual aggregated stop loss

of $2.5 million. For 2020 the Pool’s SIR increased to $2,000,000. The reinsurance agreements respond up

to the applicable policy limits and the agreements contain aggregate limits for the maximum annual

reimbursements to the Pool of $30 million (lowest reinsured layer), and $50 million. As respects ultimate

net loss subject to the $8 million excess of $2 million reinsurance layer for Fiscal Year (FY) 2013, the Pool

agreed to accept a 10% quota-share.

Through pre-funded member assessments (deposit assessments) collected immediately prior to or at the

beginning of each pool fiscal year, WCRP committed assets for the years ended September 30, 2020, of

$9,804,000, and 2019 of $7,269,000. For 2019, additional member assessments were collected and

are/were committed in support of the Pool’s “corridor deductible” in the $1 million excess of $1 million

layer) exposures totaling $1,739,000. For FY 2021, the WCRP committed $9,804,000 specifically for

funding its self-insured retentions. The increase of $793,000 in FY 2019 is due to the Pool’s election to

move from a $1 million retention to a $2 million retention.

NOTE 4 – REINSURANCE/EXCESS INSURANCE CONTRACTS

Through Gallagher Risk Management Services, Inc., the Producer (Broker-of Record) retained by the Pool’s

Board of Directors, WCRP partners with multiple superior-rated commercial insurers by acquiring

reinsurance agreements and “following form” excess, property, and cyber risk insurances. The limits

provided by these insuring agreements, contracts, and policies for FY-2020 follow:

A. Memorandum of Liability Coverage (“MLC”): Since October 1, 1988, the Pool has

provided its member counties with risk-shared (jointly purchased and/or self-insured), occurrence-

based coverage under a MLC Coverage Form for 3^rd-party liability claims against members due to

bodily injury, personal injury, property damage, errors and omissions, and advertising injury.

Page 22

October 1, 201ꢀ Thru September 30, 2020

The total “occurrence” coverage grew over time to the $20 million limit that has existed since

October 1, 2003. An additional “occurrence” limit of $5 million was available for member counties

to acquire as an individual (county-by-county) option during many of the MLC years including FYs

2020 and 2019. Each member annually selected a deductible amount of $10,000, $25,000, $50,000,

$100,000, $250,000, or $500,000, which is applied to each of the member’s occurrences from that

year. There were/are no aggregate limits for the payments the Pool makes for any individual

member county’s losses.

For the first $10,000,000 of coverage, the Pool acquires reinsurance from reinsurers that follow the

WCRP’s MLC coverage form. The reinsurance agreements are written with self-insured retentions

(“SIRs”) equal to the amount of the layer of coverage below. The reinsurance is acquired from

multiple higher-rated carriers as protection for the Pool from unexpected losses and for the

membership from contingent liabilities that might result otherwise.

The Pool purchases excess coverage for the additional $10,000,000 with an aggregate limit of

$100,000,000. Since the Pool is a cooperative program, there is a joint liability among the

participating members. Sixteen of the Pool’s 26 member counties group purchase an additional

$5,000,000 policy, excess of the pooled $20,000,000.

The excess coverage, including the initial $10,000,000 as well as the optional $5,000,000, is

acquired from higher-rated commercial carriers as jointly-purchased “following form” excess

insurance.

Reinsurance and excess premiums ceded during the year totaled $4,490,655, while the independent

actuary’s estimate of the amounts recoverable from reinsurers (and excess insurers) which reduced

the liabilities of gross loss reserves on the balance sheet (as of September 30, 2020), totaled

$24,692,361.

B. Washington Counties Property Program (“WCPP”): For FY 2020, WCRP offered jointly-

purchased (1^st-party) property coverage as an individual (county-by-county) option. This coverage

was acquired from a consortium of higher-rated commercial carriers. For FY 2020, the WCRP

selected a $100,000 Pool deductible and, in addition to the premiums paid to insurers, also collected

$725,000 for the losses actuarially projected to fall within that deductible. All 26 WCRP counties

participated in the FY2020 WCPP, with covered properties (in composite) exceeding $3.2 billion.

The WCPP limits include $500 million for typical (All Other Perils or AOP) losses, $200 million for

catastrophe (earthquake or flood), and many sub-limited coverages including Equipment Breakdown

/ Boiler & Machinery ($100 million) and Special Flood Hazard Areas ($25 million). Other coverages

included Green Construction Upgrades, and Reproduction for Historic Structures,

All Other Perils (AOP) occurrence deductibles between $5,000 and $50,000 were/are selected by the

participating counties which they are solely responsible for paying. Higher deductibles apply to

catastrophe losses.

C. Cyber Risk and Other Coverage: for FY2020, the Pool jointly purchased cyber risk and security

coverage which includes (1^stparty) business interruption, data recovery, cyber extortion, breach

response and management (regulatory compliance) protections associated with date breaches. Also,

for FY2019-20, the WCRP group purchased first and third-party terrorism coverage, with the

liability coverage having per occurrence limits of $25 million, no WCRP retentions and no member

deductibles, and the property coverage having a per occurrence limit of $100 million, with a

$10,000 WCRP retention and no member deductibles.

Page 23

October 1, 201ꢀ Thru September 30, 2020

NOTE 5 – MEMBER'S SUPPLEMENTAL ASSESSMENTS AND CREDITS

RCW 48.62.141 and the WCRP Interlocal Agreement provide for the contingent liability of participants in

the program if assets of the program are insufficient to cover the program's liabilities. Deficits of the

WCRP are financed through supplemental (retroactive) assessments against those counties that were

WCRP members for the deficient period(s). During fiscal year 2020, there was no deficiency, and no

additional retroactive assessments were levied or collected.

NOTE 6 – CAPITAL ASSETS

Capital assets are defined by WCRP policy as having an initial, individual cost of at least $2,500 and an

estimated useful life in excess of one year. Capital assets are recorded at historical cost.

Capital assets activities for the fiscal year ended September 30, 2020 were as follows:

Beginning

Balance

Ending

Balance

10/01/2019

Increase

(Decrease)

09/30/2020

Capital Assets being

Depreciated

Building

$1,320,950

208,445

$9,408

$41,677

$1,330,358

Furniture & Equipment

Total Capital Assets

being depreciated

(31,452)

218,670

$1,529,395

$51,085

$ (31,452)

$1,549,028

Less Accumulated

Depreciation:

Building

$535,584

163,306

$48,102

27,000

$583,686

158,854

Furniture & Equipment

Total Accumulated

Depreciation

$(31,452)

$698,589

$75,102

$(31,452)

$742,239

TOTAL CAPITAL

ASSET NET

$830,806

$75,102

$806,790

Capital assets activities for the fiscal year ended September 30, 2019 were as follows:

Beginning

Balance

Ending

Balance

10/01/2018

Increase

(Decrease)

09/30/2019

Capital Assets being

Depreciated

Building

$1,320,950

208,445

Furniture & Equipment

Total Capital Assets being

depreciated

195,914

15,067

(2,536)

$1,516,864

$15,067

$(2,536)

$1,529,395

Less Accumulated

Depreciation:

Building

$487,735

140,146

$47,549

25,695

$535,584

163,306

Furniture & Equipment

Total Accumulated

Depreciation

(2,536)

$627,881

$73,244

$(2,536)

$698,589

TOTAL CAPITAL ASSET

NET

$888,983

$73,244

$830,805

Page 24

October 1, 201ꢀ Thru September 30, 2020

When equipment is retired or otherwise disposed of, the original cost is removed from WCRP’s capital

assets accounts, and the net gain or loss on disposition is credited to or charged against income.

Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Asset

Years

Building

Building Improvements

Vehicles

30

5

Equipment

5

NOTE 7 – SOLVENCY

Washington Administrative Code (WAC) 200-100 requires the Washington Counties Risk Pool to maintain

certain levels of primary and secondary assets to meet solvency standards. As defined in WAC 200-100-

03001 total primary assets, i.e. cash and cash equivalents less non-claims liabilities, must at least equal the

independent actuary’s expected estimate of unpaid claims. Furthermore, a pool’s total primary and

secondary assets must at least equal the independent actuary’s 80% confidence level estimate of unpaid

claims (70% before 2015). Secondary assets include insurance receivables, real estate or other assets less

any non-claim liabilities, the values for which can be independently verified by the state risk manager

Primary Asset Test 1

2020

2019

Cash and cash equivalents

Investments

Total

Non-claims Liabilities

Unearned Revenues

Total Primary Assets

Claims Liability – Expected Level

Test 1 Result – Primary Asset Test

$14,834,602

$44,146,130

$58,980,733

$548,006

$13,482,998

$34,603,000

$22,179,348

PASS

$6,265,147

$46,034,399

$52,299,546

$420,947

$22,725,892

$29,152,707

$17,514,927

PASS

Secondary Asset Test

Cash and cash equivalents

Investments

Receivables

Prepaid Expenses

Accrued Interest

$14,834,602

$44,146,130

$1,053,679

$22,250

$6,265,147

$46,034,399

$7,364,171

$30,231

$112,271

$96,279

Capital Assets

$806,790

$830,805

Less:

Non-Claims Liabilities

Unearned Revenues

Total Secondary Assets

Total Primary plus Secondary Assets

$548,006

$13,482,998

$8,321,486

$46,944,718

$420,947

$22,725,827

$8,321,486

$37,474,193

Claims Liabilities at 80%

$22,179,000

$18,847,000

Test 2 Results – Secondary Asset Test

PASS

Page 25

October 1, 201ꢀ Thru September 30, 2020

NOTE 8 – PENSION PLANS

The following table represents the aggregate pension amounts for all plans for the year 2020 and

2019:

Aggregate Pension Amounts – All Plans

2020

2019

Pension liabilities

$ 263,790

$ 245,109

Pension assets

Deferred outflows of resources

Deferred inflows of resources

Pension expense/expenditures

$

79,986

$

62,520

$ 190,465

(5,623)

$ 116,426

$ 22,853

$

State Sponsored Pension Plans

Substantially all Washington Counties Risk Pool full-time and qualifying part-time employees

participate in one of the following statewide retirement systems administered by the Washington

State Department of Retirement Systems, under cost-sharing, multiple-employer public employee

defined benefit and defined contribution retirement plans. The state Legislature establishes, and

amends, laws pertaining to the creation and administration of all public retirement systems.

The Department of Retirement Systems (DRS), a department within the primary government of

the State of Washington, issues a publicly available comprehensive annual financial report (CAFR)

that includes financial statements and required supplementary information for each plan. The DRS

CAFR may be obtained by writing to:

Department of Retirement Systems

Communications Unit

P.O. Box 48380

Olympia, WA 98540-8380

Or the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov.

Public Employees’ Retirement System (PERS)

PERS members include elected officials; state employees; employees of the Supreme, Appeals and

Superior Courts; employees of the legislature; employees of district and municipal courts;

employees of local governments; and higher education employees not participating in higher

education retirement programs. PERS is comprised of three separate pension plans for membership

purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan

with a defined contribution component.

PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are

determined as two percent of the member’s average final compensation (AFC) times the member’s

years of service. The AFC is the average of the member’s 24 highest consecutive service months.

Members are eligible for retirement from active status at any age with at least 30 years of service,

at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members

retiring from active status prior to the age of 65 may receive actuarially reduced benefits.

Retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other

benefits include duty and non-duty disability payments, an optional cost-of-living adjustment

Page 26

October 1, 201ꢀ Thru September 30, 2020

(COLA), and a one-time duty-related death benefit, if found eligible by the Department of Labor

and Industries. PERS 1 members were vested after the completion of five years of eligible service.

The plan was closed to new entrants on September 30, 1977.

Contributions

The PERS Plan 1 member contribution rate is established by State statute at 6 percent. The

employer contribution rate is developed by the Office of the State Actuary and includes an

administrative expense component that is currently set at 0.18 percent. Each biennium, the state

Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1 required

contribution rates (expressed as a percentage of covered payroll) for 2020 were as follows:

PERS Plan 1

Actual Contribution Rates

January – August 2020

PERS Plan 1

PERS Plan 1 UAAL

Administrative Fee

Employer

Employee*

7.92%

4.76%

0.18%

6.00%

Total 12.86%

September – December 2020

6.00%

PERS Plan 1

PERS Plan 1 UAAL

Administrative Fee

7.92%

4.87%

0.18%

6.00%

Total 12.97%

6.00%

The WCRP’s actual contributions to the plan for fiscal years ended September 30, 2020 and 2019 were $35,961

and $33,845 respectively.

PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are

determined as two percent of the member’s average final compensation (AFC) times the member’s

years of service for Plan 2 and 1 percent of AFC for Plan 3. The AFC is the average of the

member’s 60 highest-paid consecutive service months. There is no cap on years of service credit.

Members are eligible for retirement with a full benefit at 65 with at least five years of service credit.

Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members who have at

least 20 years of service credit and are 55 years of age or older, are eligible for early retirement

with a benefit that is reduced by a factor that varies according to age for each year before age 65.

PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old

can retire under one of two provisions:

x

With a benefit that is reduced by three percent for each year before age 65; or

With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter

return-to-work rules.

PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting

a reduction of five percent for each year of retirement before age 65. This option is available only

to those who are age 55 or older and have at least 30 years of service credit. PERS Plan 2/3

retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other

PERS Plan 2/3 benefits include duty and non-duty disability payments, a cost-of-living allowance

(based on the CPI), capped at three percent annually and a one-time duty related death benefit, if

Page 27

October 1, 201ꢀ Thru September 30, 2020

found eligible by the Department of Labor and Industries. PERS 2 members are vested after

completing five years of eligible service. Plan 3 members are vested in the defined benefit portion

of their plan after ten years of service; or after five years of service if 12 months of that service are

earned after age 44.

PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and

investment earnings on those contributions. PERS Plan 3 members choose their contribution rate

upon joining membership and have a chance to change rates upon changing employers. As

established by statute, Plan 3 required defined contribution rates are set at a minimum of 5 percent

and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined

contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution

portion of their plan.

Contributions

The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the

State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer

rates include a component to address the PERS Plan 1 UAAL and an administrative expense that

is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2

employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3

required contribution rates (expressed as a percentage of covered payroll) for 2020 were as follows:

PERS Plan 2/3

Actual Contribution Rates

January – August 2020

PERS Plan 2/3

PERS Plan 1 UAAL

Administrative Fee

Employer 2/3

Employee 2*

7.92%

4.76%

0.18%

7.90%

Employee PERS Plan 3

Varies

Total 12.86%

7.41%

September – December 2020

PERS Plan 2/3

PERS Plan 1 UAAL

Administrative Fee

7.92%

4.87%

0.18%

7.90%

Employee PERS Plan 3

Varies

Total 12.97%

7.90%

The WCRP’s actual contributions to the plan for years ended September 30, 2020 and 2019 were $59,717 and

$51,376 respectively.

Actuarial Assumptions

The total pension liability (TPL) for each of the DRS plans was determined using the most recent

actuarial valuation completed in 2020 with a valuation date of June 30, 2019. The actuarial

assumptions used in the valuation were based on the results of the Office of the State Actuary’s

(OSA) 2013-2018 Experience Study and the 2019 Economic Experience Study.

Additional assumptions for subsequent events and law changes are current as of the 2019 actuarial

valuation report. The TPL was calculated as of the valuation date and rolled forward to the

measurement date of June 30, 2020. Plan liabilities were rolled forward from June 30, 2019, to

Page 28

October 1, 201ꢀ Thru September 30, 2020

June 30, 2020, reflecting each plan’s normal cost (using the entry-age cost method), assumed

interest and actual benefit payments.

x

Inflation: 2.75% total economic inflation; 3.50% salary inflation

Salary increases: In addition to the base 3.50% salary inflation assumption, salaries are

also expected to grow by promotions and longevity.

x

Investment rate of return: 7.4%

Mortality rates were developed using the Society of Actuaries’ Pub. H-2020 mortality rates, which

vary by member status, as the base table. The OSA applied age offsets for each system, as

appropriate, to better tailor the mortality rates to the demographics of each plan. OSA applied the

long-term MP-2017 generational improvement scale, also developed by the Society Actuaries, to

project mortality rates for every year after the 2010 base table. Mortality rates are applied on a

generational basis; meaning, each member is assumed to receive additional mortality

improvements in each future year throughout his or her lifetime.

There were changes in methods and assumptions since the last valuation.

x

OSA updated its demographic assumptions based on the results of its latest demographic

experience study. See OSA’s 2013-2018 Demographic Experience Study at leg.wa.gov/osa.

OSA updated the Early Retirement Factors and Joint-and-Survivor factors used in its model to

match the ones implemented by DRS on October 1, 2020. These factors are used to value

benefits for members who elect to retire early and for survivors of members that die prior to

retirement.

x

The valuation includes liabilities and assets for Plan 3 members purchasing Total Allocation

Portfolio annuities when determining contribution rates and funded status.

OSA simplified its modeling of medical premium reimbursements for survivors of duty-related

deaths in LEOFF 2.

OSA changed its method of updating certain data items that change annually, including the

public safety duty-related death lump sum and Washington state average wage. OSA set these

values at 2018 and will project them into the future using assumptions until the next

Demographic Experience Study in 2025. See leg.wa.gov/osa for more information on this

method change.

Discount Rate

The discount rate used to measure the total pension liability for all DRS plans was 7.4 percent.

To determine that rate, an asset sufficiency test was completed to test whether each pension plan’s

fiduciary net position was sufficient to make all projected future benefit payments for current plan

members. Based on OSA’s assumptions, the pension plans’ fiduciary net position was projected

Page 29

October 1, 201ꢀ Thru September 30, 2020

to be available to make all projected future benefit payments of current plan members. Therefore,

the long-term expected rate of return of 7.4 percent was used to determine the total liability.

Long-Term Expected Rate of Return

The long-term expected rate of return on the DRS pension plan investments of 7.4 percent was

determined using a building-block-method. In selecting this assumption, the Office of the State

Actuary (OSA) reviewed the historical experience data, considered the historical conditions that

produced past annual investment returns, and considered Capital Market Assumptions (CMA’s)

and simulated expected investment returns provided by the Washington State Investment Board

(WSIB). The WSIB uses the CMA’s and their target asset allocation to simulate future investment

returns at various future times.

Estimated Rates of Return by Asset Class

Best estimates of arithmetic real rates of return for each major asset class included in the pension

plan’s target asset allocation as of June 30, 2020, are summarized in the table below. The inflation

component used to create the table is 2.2 percent and represents the WSIB’s most recent long-term

estimate of broad economic inflation.

% Long-Term

Asset Class

Target

Allocation

Expected Real Rate of

Return Arithmetic

2.20%

5.10%

5.80%

Fixed Income

Tangible Assets

Real Estate

Global Equity

Private Equity

20%

7%

18%

32%

23%

100%

6.30%

9.30%

Sensitivity of the Net Pension Liability/(Asset)

The table below presents Washington Counties Risk Pool’s proportionate share of the net pension

liability calculated using the discount rate of 7.4 percent, as well as what Washington Counties

Risk Pool proportionate share of the net pension liability would be if it were calculated using a

discount rate that is 1-percentage point lower (6.4 percent) or 1-percentage point higher (8.4

percent) than the current rate.

1% Decrease

(6.4%)

Current Rate

(7.4%)

1% Increase

(8.4%)

2020

PERS 1

PERS 2/3

$ 224,427

526,496

1% Decrease

(6.4%)

$ 231,438

462,483

$ 179,175

84,615

Current Rate

(7.4%)

$ 184,808

60,301

$ 139,711

(279.275)

1% Increase

(8.4%)

$ 144,350

(269,716)

2019

PERS 1

PERS 2/3

Pension Plan Fiduciary Net Position

Detailed information about the State’s pension plans’ fiduciary net position is available in the

separately issued DRS financial report.

Page 30

October 1, 201ꢀ Thru September 30, 2020

Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and

Deferred Inflows of Resources Related to Pensions

At June 30, 2020 and 2019, the Washington Counties Risk Pool reported a total pension liability of $263,790 and

$245,110 respectively for its proportionate share of the net pension liabilities as follows:

Liability (or Asset)

2020

2019

PERS 1

PERS 2/3

$179,175

$ 84,615

$184,808

$60,301

At June 30, the Washington Counties Risk Pool proportionate share of the collective net pension

liabilities was as follows.

Proportionate

Share 6/30/19

Proportionate

Share 6/30/20

Change in

Proportion

PERS 1

PERS 2/3

.004806%

.006208%

.005075%

.006616%

(.000269) %

(.000408) %

Proportionate

Share 6/30/18

. 005474%

Proportionate

Share 6/30/19

. 004806%

Change in

Proportion

(.000668) %

(.000820) %

PERS 1

PERS 2/3

. 007028%

. 006208%

Employer contribution transmittals received and processed by the DRS for the fiscal year ended

June 30 are used as the basis for determining each employer’s proportionate share of the collective

pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Allocations

for all plans except LEOFF 1.

The collective net pension liability (asset) was measured as of June 30, 2020, and the actuarial

valuation date on which the total pension liability (asset) is based was as of June 30, 2019, with

update procedures used to roll forward the total pension liability to the measurement date.

Pension Expense

For the year ended September 30, 2020 and 2019, the Washington Counties Risk Pool recognized pension

expense as follows:

Pension Expense

2020

2019

PERS 1

$ 18,493

$ (22,873)

PERS 2/3

TOTAL

$4,360

$17,249

$ 22,853

$ (5,623)

Deferred Outflows of Resources and Deferred Inflows of Resources

At September 30, 2020, the Washington Counties Risk Pool reported deferred outflows of resources and deferred

inflows of resources related to pensions from the following sources:

Page 31

October 1, 201ꢀ Thru September 30, 2020

PERS 1

Deferred Outflows of

Resources

Deferred Inflows of

Resources

Differences between expected and

actual experience

Net difference between projected

and actual investment earnings on

pension plan investments

$

$(998)

Changes of assumptions

$

Changes in proportion and

differences between contributions

and proportionate share of

contributions

Contributions subsequent to the

measurement date

$9,390

TOTAL

$9,390

$(998)

PERS 2/3

Deferred Outflows of

Resources

Deferred Inflows of

Resources

Differences between expected and

actual experience

$4,360

$(10,604)

$(4,297)

$(57,799)

Net difference between projected

and actual investment earnings on

pension plan investments

Changes of assumptions

$1,544

Changes in proportion and

differences between contributions

and proportionate share of

contributions

$25,594

$(42,728)

Contributions subsequent to the

measurement date

$15,505

Total

$70,593

$(115,429)

At September 30, 2019, the Washington Counties Risk Pool reported deferred outflows of resources and deferred

inflows of resources related to pensions from the following sources:

PERS 1

Deferred Outflows of

Resources

Deferred Inflows of

Resources

Differences between expected and

actual experience

Net difference between projected

and actual investment earnings on

pension plan investments

$

$(12,347)

Changes of assumptions

$

Changes in proportion and

differences between contributions

Page 32

October 1, 201ꢀ Thru September 30, 2020

and proportionate share of

contributions

Contributions subsequent to the

measurement date

$8,904

TOTAL

$8,904

$(12,347)

PERS 2/3

Deferred Outflows of

Resources

Deferred Inflows of

Resources

Differences between expected and

actual experience

$17,276

$(12,964)

$(87,773)

$(25,300)

Net difference between projected

and actual investment earnings on

pension plan investments

Changes of assumptions

$1,544

Changes in proportion and

differences between contributions

and proportionate share of

contributions

$19,979

$(52,080)

Contributions subsequent to the

measurement date

$14,816

TOTAL

$53,615

$(178,118)

Deferred outflows of resources related to pensions resulting from the Washington Counties Risk Pool’s

contributions after the measurement date will be recognized as a reduction of the net pension liability in the year

ended September 30, 2020. Other amounts reported as deferred outflows and deferred inflows of resources

related to pensions will be recognized in pension expense as follows:

Year ended

September:

PERS 1

$ (4,527)

PERS 2/3

$ (27,950)

2021

2022

2023

2024

2025

$ (142)

$ 1,381

$ 2,291

$ (1,232)

$ 8,664

$ 16,221

Thereafter

TOTAL

$ (998)

$ (4,297)

Deferred outflows of resources related to pensions resulting from the Washington Counties Risk Pool’s

contributions after the measurement date will be recognized as a reduction of the net pension liability in the year

ended September 30, 2019. Other amounts reported as deferred outflows and deferred inflows of resources

related to pensions will be recognized in pension expense as follows:

Year ended

September:

PERS 1

$ (2.726)

PERS 2/3

$ (30,414)

2020

2021

2022

2023

2024

$ (6,456)

$ (2,304)

$ (861)

$ (50,130)

$ (25,060)

$ (15,773)

$ (13,037)

Page 33

October 1, 201ꢀ Thru September 30, 2020

Thereafter

$ (4,906)

TOTAL

$ (12,347)

$ (139,319)

NOTE 9 – QUALIFIED PENSION PLAN

The WCRP also participates in a defined contribution pension plan created in accordance with Internal Revenue

Code Section 401(a). This plan is with the International City/County Management Association (ICMA).

Employer contributions to the Qualified Pension Plan for the years ended September 30, 2020 and 2019 were

$48,820 and $43,572, respectively. There are no employee contributions to this plan.

NOTE 10 – DEFERRED COMPENSATION PLANS

The WCRP offers its employees a choice of two deferred compensation plans created in accordance with

Section 457 of the Internal Revenue Code. The plans are with the International City/County Management

Association (ICMA) and the Washington State Department of Retirement. The plans, available to all

eligible employees, permit them to defer a portion of their wages until future years. The deferred

compensation is not available to contributing employees until their termination, retirement, death, or

unforeseeable emergency.

In 1998, the ICMA Deferred Compensation Program plans’ assets were placed into trust for the exclusive

benefit of participants and their beneficiaries. Pursuant to Governmental Accounting Standards Board

(GASB) Statement 32, and since the WCRP is not the owner of these assets, these plans’ assets and

liabilities are not reported in the WCRP financial statements.

NOTE 11 – LONG TERM LIABILITIES

During the year ended September 30, 2020, the following changes occurred in long-term liabilities:

Beginning

Balance

9/30/2019

Ending

Balance

9/30/2020

Due Within

One Year

Changes in Long -Term Liabilities

Additions

Reductions

Claims Reserves

Corridor Reserves

$8,519,996

$8,039,657

$5,817,158

183,012

$14,337,154

6,775,559

183,012

$2,622,266

3,225,166

183,012

(1,264,098)

Property

Quota Share

ULAE Reserve

Compensated Absences

Net Pension Liability – GASB 68

Total Long-Term Liabilities

$0

$955,274

$53,165

(71,652)

883,622

72,796

19,631

18,681

14,560

$245,110

263,791

$17,813,202

$6,038,485 $(1,335,750)

$22,515,935

$6,045,004

During the year ended September 30, 2019, the following changes occurred in long-term liabilities:

Beginning

Balance

9/30/2018

Ending

Balance

9/30/2019

Due Within

One Year

Changes in Long -Term Liabilities

Additions

Reductions

Claims Reserves

Corridor Reserves

Quota Share

$2,437,378

$8,574,454

$60,000

$6,082,618

$8,519,996

8,039,657

$0.00

$1,143,330

$3,232,620,

(534,797)

(60,000)

Page 34

October 1, 201ꢀ Thru September 30, 2020

ULAE Reserve

$976,598

$78,627

$364,469

(21,324)

(25,462)

(119,359)

$955,274

$53,165

$245,110

Compensated Absences

Net Pension Liability – GASB 68

Total Long-Term Liabilities

$9,575

$12,491,526

$6,082,618

$(760,942)

$17,813,202

$4,385,707

NOTE 12 – UNPAID CLAIMS LIABILITIES

As discussed somewhat in Notes C.6 and C.9, WCRP establishes a liability for both reported and unreported

insured events that include estimates of both future payments of losses and related claims adjustment expenses.

The following represents comparative changes in those aggregate liabilities for WCRP’s SIR Reserves,

reinsurance’ Corridor Deductibles, and Quota Share during the past two years:

2020

2019

$8,519,996

$2,437,379

SIR - Unpaid claims and claim adjustment expense/claims reserve at beginning of the year

SIR - Incurred Claims & Claims Adjustment Expenses:

$9,804,000

(1,967,593)

$16,356,403

$7,269,000

(230,518)

$9,475,861

Provisions for Insured Events of the Current Year

Increase (Decrease) in Provision for Insured Events Prior Years

SIR - Total Incurred Claims & Claims Adjustment Expense

SIR - Payments:

$32,005

$144,533

$811,330

$955,863

Claims & Claims Adjustment Expenses Attributable to Insured Events of the Current Year

Claims & Claims Adjustment Expenses Attributable to Insured Events of Prior Years

$1,987,245

$2,019,250

SIR -Total Payments

$14,337,153

$8,519,996

SIR - Total Unpaid Claims & Claims Expense Reserves at End of Year

$8,039,657

$8,574,454

Corridor - Unpaid claims and claim adjustment expense/claims reserve at beginning of the year

Corridor – Incurred Claims & Claims Adjustment Expenses:

Provisions for Insured Events of the Current Year

$1,739,000

$940,802

$(235,075)

Increase (Decrease) in Provision for Insured Events Prior Years

$7,804,582

$11,254,256

Corridor - Total Incurred Claims & Claims Adjustment Expense

Corridor – Payments:

Claims & Claims Adjustment Expenses Attributable to Insured Events of the Current Year

Claims & Claims Adjustment Expenses Attributable to Insured Events of Prior Years

$1,029,024

$6,775,558

$3,214,599

$8,039,657

$60,000

Corridor – Payments

Corridor - Total Unpaid Claims & Claims Expense Reserves at End of Year

Quota Share 10% – Unpaid claims and claim adjustment expense/claims reserve at beginning of the year

Quota Share 10% – Incurred Claims & Claims Adjustment Expenses:

Provisions for Insured Events of the Current Year

$(60,000)

Increase (Decrease) in Provision for Insured Events Prior Years

Quota Share - Total Incurred Claims & Claims Adjustment Expense

Quota Share - Payments:

$(60.000)

$0.00

$0

$0.00

Quota Share - Total Unpaid Claims & Claims Expense Reserves at End of Year

Property Program Balance at beginning of year

$725,000

$(325,000)

216,988

Provisions for Insured Events of the Current Year

Increase (Decrease) in provision for Property Program

Claims & Claims Adjustment Expenses Attributable to Insured Events of the Current Year

Page 35

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Property - Total Unpaid Claims & Claims Expense Reserves at End of Year

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$883,622

$16,559,653

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The schedule presented in Note 12 presents the changes in claims liabilities for the past two years

for the WCRP’s one type of contract, liability insurance.

Page 40

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Page 41

WASHINGTON COUNTIES RISK POOL

DES Schedule of Expenses

Schedule T-2

MCAG NO. 0774

For Fiscal Years Ended September 30, 20ϮϬ and September 30, 201ϵ

09/30/2020

09/30/2019

Insurance Premiums/Reserve Expense

ULAE Expense

Adjustment to Prior Years' "1st/2nd Layers' Corridor" Reserves

Adjustment to Prior Years' "SIR" Reserves

Adjustment to Prior Year' "10% (8x2 Layer) Quota Share

$18,536,661

(71,652)

(235,075)

(1,967,593)

0

$17,020,577

(21,324)

940,802

(230,518)

(60,000)

Contracted Services:

Actuarial

State Audit Expense

State Risk Manager Expenses

Legal Fees

80,200

15,820

11,720

514,517

30,780

68,875

61,014

5,884

227,400

14,210

17,581

253,520

28,392

72,355

74,077

9,481

IT Consultants

Property Appraiser

Temporary Staffing Agency

Independent Adjusting Expense

Investment Advisor

Other Consulting Fees

20,804

19,845

12,282

8,352

General Administrative Expenses

Employee Salaries and Benefitsꢀ

Communication

Supplies

Dues and Membershipsꢀ

Travel - Employee

Committee and Board Meetingsꢀ

Depreciation

Building and Auto Insuranceꢀ

Operating Leases

1,031,441

18,601

19,289

7,178

847,909

18,347

29,801

5,541

54,890

124,603

73,244

22,540

23,250

56,507

75,102

26,493

7,371

Utilities/Building

44,259

268,405

13,734

99,773

40,886

293,652

29,781

Member Services - Trainingꢀ

Member Services - Scholarshipsꢀ

Miscellaneous Expenses

174,492

Total Operating Expenses

$18,783,206

$20,082,872

Page 42

ABOUT THE STATE AUDITOR’S OFFICE

The State Auditor’s Office is established in the Washington State Constitution and is part of the

executive branch of state government. The State Auditor is elected by the people of Washington

and serves four-year terms.

We work with state agencies, local governments and the public to achieve our vision of increasing

trust in government by helping governments work better and deliver higher value.

In fulfilling our mission to provide citizens with independent and transparent examinations of how

state and local governments use public funds, we hold ourselves to those same standards by

continually improving our audit quality and operational efficiency, and by developing highly

engaged and committed employees.

As an agency, the State Auditor’s Office has the independence necessary to objectively perform

audits, attestation engagements and investigations. Our work is designed to comply with

professional standards as well as to satisfy the requirements of federal, state and local laws. The

Office also has an extensive quality control program and undergoes regular external peer review

to ensure our work meets the highest possible standards of accuracy, objectivity and clarity.

Our audits look at financial information and compliance with federal, state and local laws for all

local governments, including schools, and all state agencies, including institutions of higher

education. In addition, we conduct performance audits and cybersecurity audits of state agencies

and local governments, as well as state whistleblower, fraud and citizen hotline investigations.

The results of our work are available to everyone through the more than 2,000 reports we publish

each year on our website, www.sao.wa.gov . Additionally, we share regular news and other

information via an email subscription service and social media channels.

We take our role as partners in accountability seriously. The Office provides training and technical

assistance to governments both directly and through partnerships with other governmental support

organizations.

Stay connected at sao.wa.gov

Other ways to stay in touch

 Find your audit team

 Main telephone:

(564) 999-0950

 Request public records

 Search BARS manuals (GAAP and

cash ), and find reporting templates

 Learn about our training workshops

and on-demand videos

 Toll-free Citizen Hotline:

(866) 902-3900

 Email:

 Discover which governments serve you

— enter an address on our map

 Explore public financial data

with the Financial Intelligence Tool

webmaster@sao.wa.gov

Page 43

Office of the Washington State Auditor

sao.wa.gov