State Auditor flags financial instability at Aeneas Lake Irrigation District
The Washington State Auditor’s Office has released an accountability audit examining the operations and financial health of the Aeneas Lake Irrigation District. The district, which serves an area near Tonasket in Okanogan County, is overseen by a five-member board and supplies water to more than 1,300 acres.
The review covered administrative functions for the period spanning 2022 through 2024. Investigators concluded that the district’s long-term financial stability is a matter of significant concern.
Audit Findings: A Deteriorating Financial Position
State auditors determined that the district's current financial standing poses a high risk regarding its ability to cover operating expenses and meet debt service obligations while continuing to provide basic services.
The report highlighted several key issues, including a dependency on county loans, volatile operating results, and $106,928 in outstanding receivables. Since 2021, the district has utilized registered warrants issued by the Okanogan County Treasurer to manage cash flow and fund daily operations.
Financial data from 2021 through 2024 reveals significant fluctuation in fiscal outcomes. The district recorded deficits of $137,710 in 2021 and $52,733 in 2023. Conversely, fiscal years 2022 and 2024 yielded gains of $71,783 and $140,532, respectively. The report does not specify whether these swings stem from variable collection rates or other factors.
The report further identified a lack of a formal strategy to reduce expenditures or eliminate reliance on county loans for daily operations. A primary issue cited was more than $100,000 in uncollected water fees. Although district policy mandates the suspension of service for delinquencies, water has not been physically shut off at properties with outstanding balances.
Recommendations for Improvement
To protect public resources and ensure the district's future, the State Auditor recommended that the board develop a comprehensive financial plan, improve collections, enforce existing shut-off policies, and raise rates to fund equipment and infrastructure replacements.
District Response
District management acknowledged the challenges, identifying seasonal cash flow issues as the primary hurdle. The district receives payments only twice a year, while expenses, particularly electricity bills from the PUD, remain constant.
In response to the audit, the district outlined several corrective steps:
Budget Restructuring A formal budget plan was implemented at the start of 2025 to distribute large expenditure payments, such as those owed to the PUD, throughout the year.
Improved Collections The district reports that past-due accounts dropped significantly by late 2025. Legal counsel has been retained to issue certified collection letters.
Infrastructure Constraints The district explained that a lack of lockout mechanisms on their outdated system makes shutting off water difficult and costly. While the district maintains that delinquent users are not currently using irrigation water, it appears to rely on a combination of manual checks by employees and the honor system to verify this status.
The district anticipates that recent adjustments will enable it to accumulate enough liquid assets to eliminate its reliance on short-term borrowing from the county by 2028.