Red Flags Near Tonasket: State Audit Warns Local Irrigation District is at 'High Risk'
The Office of the Washington State Auditor released an accountability audit report last month, detailing the practices and financial health of the Aeneas Lake Irrigation District.
Located in Okanogan County near Tonasket, the District is governed by a five-member Board of Directors and provides irrigation to over 1,300 acres.
The audit covered multiple administrative areas from 2022 through 2024. Findings highlighted significant concerns regarding the District’s long-term financial stability.
Audit Findings: A Deteriorating Financial Position
The State Auditor identified that the District’s financial condition places it at a high risk of being unable to meet operating demands and existing debt service requirements while maintaining basic service levels.
Key issues identified in the report include reliance on county loans, fluctuating operating gains and losses, and $106,928 in past due accounts.
To address cash-flow shortages and pay for daily operations, the District has relied heavily on “registered warrants” from the Okanogan County Treasurer since 2021.
Additionally, financial data from 2021 to 2024 shows significant volatility. In 2021 and 2023, the district ended the fiscal year with deficits of $137,710, and $52,733, respectively.
However in 2022 and 2024, the district ended their fiscal years with gains of $71,783 and $140,532. It’s unclear from the report if this fluctuation is related to having better and worse outcomes from collecting fees due, or if there is a different cause.
In addition to findings, the Auditor’s report suggests causes and effects of the current issues troubling Lake Aeneas Irrigation District. Of proximal concern is the more than $100,000 in uncollected water fees. Although District policy states water delivery should be suspended for delinquent accounts, in practice, water is not being physically shut off to properties that have outstanding balances.
Furthermore, the report voices concern that the district’s board had not implemented a formal plan to reduce spending or to find another way to eliminate its reliance on daily-operation loans from the county.
Recommendations for Improvement
To safeguard public resources and ensure the District’s future, the State Auditor recommended the board develop a comprehensive financial plan, improve collections, enforce existing water shut off policies, and raise rates to allow for replacements and upgrades to equipment and infrastructure.
The District’s Perspective and Response
District management acknowledged the challenges, noting that their primary hurdle is a seasonal cash flow issue; the district only receives payments twice a year, while expenses like PUD electricity bills, which is their largest expenditure, are 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 spread out large expenditure payments (like PUD) throughout the year.
Improved Collections: The District has already seen progress, with past-due accounts dropping significantly by late 2025. They have retained legal counsel to send 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, though they maintain that delinquent users are currently not using irrigation. The district appears to be using some combination of having employees manually check the delinquent properties for irrigation water use, and the honor system.
The District expressed optimism that these changes will allow them to build up sufficient cash reserves to be entirely free of the need for county warrants by 2028.