SPU Annual Financial Audit 2026-2032

This request is for a new contract to solicit an outside auditing firm to audit Seattle Public Utilities’ (SPU) financial statements. This work includes four bodies of work:

1. Audit of SPU's three funds: Water Fund, Solid Waste Fund, and Drainage & Wastewater Fund statements of net position, statement of revenues, expenses and changes in net position, and statements of cash flows;

2. IT audit of systems;

3. Review of the agreed upon procedures for wholesale contracts; and

4. Ship Canal Water Quality Project Joint Project Agreement partnership contribution and cost reconciliation and audit. This is a one-time joint audit of all costs associated with the Ship Canal project between King County and SPU.

There will be three issued statements, one for each fund. The audits and agreed upon procedures will be performed in accordance with Generally Accepted Government Auditing Standards (GAGAS). Seattle Public Utilities has identified an estimated budget of $3,500,000 over the course of seven (7) years for this work.

SPU’s rates, budget, construction and financing efforts are subject to review and approval by the Mayor and Seattle City Council. The Council, in effect, serves as the Board of Directors of the Utility. General administrative authority over SPU rests with the Utility’s GM/CEO who is appointed by the Mayor and confirmed by the City Council.

The City of Seattle’s financial information is processed using PeopleSoft, an Oracle suite of applications for financial reporting. SPU’s fund financial data is uniquely tracked within PeopleSoft.

The PeopleSoft modules include:

• General Ledger

• Project Costing

• Accounts Payable and Receivable

• Asset Management

• Procurement

Other major applications that interface with the PeopleSoft system are:

• the payroll processing system (Workday); the material inventory/management system (MAXIMO) and;

• the customer billing system (CCB).

It is anticipated that the following will occur during the term of this contract, which will impact SPU process and Financials.

• Implement an accounts payable invoice processing application
• An upgrade to the CCB system
• SPU will start deploying Automated Meter Inferstructure (AMI), which will interface directly into CCB, for purpose of customer billing.

The City’s IT group is responsible for the internal control framework of the key financial systems and ensures that the IT infrastructure is sound. The infrastructure encompasses database, operating system and network for all applications within the City system.

The Citywide Accounting and Payroll Services Division of the Office of City Finance (OFC) is responsible for producing and maintaining the City’s annual financial reports; coordinating all accounting related services; overseeing day-to-day operations and maintenance of the City-wide financial management system (PeopleSoft); managing the City’s overall cash flow; and managing the City’s financial structure. Changes in the relationship between SPU and the purveyors and wholesale customers may occur during the term of engagement. These changes may affect the contract’s scope of work.

The accounting policies and financial reporting of SPU are regulated by the Washington State Auditor’s Office, Division of Municipal Corporations and conform to accounting principles generally accepted in the United States of America as applied to government units. The Governmental Accounting Standard Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The Financial Accounting Standards Board (FASB) statements issued prior to December 1, 1989, are also used when no guidance is provided by GASB or when such standards are not in conflict with GASB.

Copies of SPU’s 2024 audited financial statements, wholesale customer statements and the Official Statements of the most recent revenue bond issues for the Water and Drainage and Wastewater funds are enclosed by attachment to this solicitation.