PORT ANGELES — City officials have corrected a handful of issues after a state audit found inadequacies in reports.

The state auditor noted problems with city financial reports and requirements for construction contracts using federal dollars in a report released Monday.

It identified “deficiencies in internal controls” that caused certain city fund amounts to either be underestimated or overestimated.

The audit also said city staff failed to check whether a contractor on a city project using federal funds had been suspended or disbarred.

Byron Olson, the city’s chief financial officer, said the issues have been corrected and have not affected actual amounts of money available.

“There’s no issue or question of any money missing or not being available,” Olson said Wednesday.

“[The Auditor’s Office] believes [the city’s] financial statements do represent the city’s finances in a proper manner.”

The audit, covering Jan. 1, 2013, to Dec. 31, 2013, reported that:

■   The city’s wastewater utility capital fund was underestimated by $10 million, and the city’s non-operating revenue in the general fund was overestimated by the same amount.

Olson said this issue, which city staff told the Auditor’s Office about once staff discovered it, stemmed from a $10 million loan for the city’s combined sewer overflow reduction project mistakenly being accounted for in the city’s general fund rather than the city’s capital projects fund at the end of 2013.

■   The city’s solid waste collection utility fund was understated by $522,239 due to a posting error.

Olson said this issue, which city staff also brought to the auditor’s attention, was the result of staff erroneously assigning the amount in question to the city’s water fund.

“The net affect was zero, and the bottom line is correct,” Olson said.

■   The amount of money set to come out of the city’s general fund was understated by $974,828, and the amount set to be taken in by the city’s capital improvements fund was overestimated by the same amount.

Olson said this was the result of an entry error on city staff’s part.

In its written response to the auditor’s report, the city pledged that staff will do more thorough investigations of individual budget line amounts to avoid similar mistakes in the future.

Craig Fulton, the city’s public works and utilities director, said the failure of city staff to check whether Carlsborg-based Primo Construction, the city’s contractor on the downtown esplanade installation, had been suspended or disbarred resulted from a miscommunication between public works and community and economic development staff.

The contractor had not been suspended or disbarred, Fulton said.

About $261,500 in federal grant money was used for lighting fixtures and poles on the project, which required the verification that was mistakenly not done, according to the auditor’s report.

“It just slipped through the cracks,” Fulton said.

He said the suspension and disbarment status of all contractors on city construction projects, not just those involving federal funds, will be verified in the future.

“[There will be] no additional cost to the city to do this,” Fulton said.

“We’re going to do it for every [construction] contract.

“It makes good sense.”

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Reporter Jeremy Schwartz can be reached at 360-452-2345, ext. 5074, or at jschwartz@peninsuladailynews.com.