Audit Finds Persistent Financial Reporting and Asset Control Weaknesses at WhidbeyHealth

The Washington State Auditor’s Office released a report identifying two significant control weaknesses at the Whidbey Island Public Hospital District, which operates WhidbeyHealth. The audit focused on the 2021 fiscal year and repeated previous concerns about the district’s financial reporting and internal asset controls. Auditors found that those shortcomings remain unresolved and continue to limit public access to accurate and timely financial information.

The first finding centers on the district’s lack of internal controls to ensure annual financial reports are complete and submitted on time. The audit notes that the district provided incomplete data and filed required financial information late, including one instance of a 190 day delay for certain submissions. Auditors said those delays deprive citizens and oversight bodies of the prompt transparency needed to evaluate financial performance and stewardship of public funds.

The second finding addresses inadequate internal controls over theft sensitive assets, defined in the report as items valued between $1,000 and $4,999. Examples include computers, medical devices and televisions. Auditors concluded that the district’s tracking and monitoring practices for these assets were insufficient, increasing the risk of loss or misappropriation. The report further states that this issue was identified in previous audits and that revised policies had not been fully communicated across departments.

The audit places these findings in the context of recent financial difficulties at WhidbeyHealth, prior management changes, and concerns reflected in Moody’s ratings context. In response to the audit the district said it has been taking steps intended to address weaknesses, including hiring consultants and revising policies. Those steps aim to improve reporting timeliness and strengthen asset inventory controls, though auditors noted the changes had not yet been fully implemented during the period under review.

For Island County residents the audit raises practical concerns about oversight and the protection of taxpayer supported services. Timely and accurate financial reporting helps local leaders and the public track budgets, understand service priorities, and identify problems before they worsen. Weak controls over theft sensitive assets carry financial risks and can complicate replacement planning for clinical equipment and information technology.

Moving forward the district will need to demonstrate consistent implementation of revised policies and internal controls to restore confidence. Residents who want to follow progress can review the audit report and track district board activity as leaders work to address the longstanding findings and improve transparency and accountability.