By KIM SMITH DEDAM
---- — JAY — An audit of town accounts took issue only with water and sewer billing procedures.
But some of the procedures challenged were related to damage recovery from severe flooding in 2011.
State Comptroller Thomas P. DiNapoli released the findings this week based on an auditors’ review done on all town records kept from Jan. 1, 2011, through March 31, 2012.
The sole critique found “the town did not have comprehensive written policies and procedures to provide adequate guidance and internal controls over water and sewer user charges, and the (town) board provided only minimal oversight,” the report said.
Auditors said 34 of 35 user-fee adjustments, totaling $5,706, were not affirmed by a resolution by the Town Council.
Auditors also found that $2,397 in water rent deposits were not dated properly, even though all water and sewer monies collected were intact.
The state audit recommended that town officials establish written policies and procedures for internal controls over water and sewer billing, collecting, adjusting and reconciling.
Town Supervisor Randy Douglas said the auditors spent nearly 10 weeks in Jay town offices.
“We were right in the middle of recouping from Irene. We’re $3 million in debt, balancing 52 worksheets worth millions of dollars in remediation projects; if that’s the only thing they can find, we’re doing well,” he said.
“What they found was a process we used for damaged homes. If somebody got flooded in their home and asked for a reduction in their water rent because they can’t live there, the Water and Sewer Committee would approve a reduction. They presented the request to me, and I would go back to the biller, and we lowered their rate.
“The only thing we didn’t do is bring it to the full board for a resolution.”
At first, it was an effectual response to water and sewer user needs, Douglas said of the two flooding events in May and August 2011.
Officials were also working to provide water to users during part of that audit period; the water system was severely damaged during Irene, forcing the town to use hoses to supply water.
Since the audit, water-service arrangements have become more formal and therefore take more time, Douglas said.
“We require now, when someone wants a water turn-on or a water turn-off, they used to be able to go to the water billing person and ask. Nowadays, if someone comes in, I require that they put it in writing, and I take that request, bring it to the next town board meeting, where we approve it, then send a letter to the user that their request has been approved. It takes a lot more time. We are following the protocol now.”
Overall, he added, the audit process was helpful.
READ PAST AUDITS
But Jay officials have done their town-accounting homework.
“I read every audit released by the Comptroller’s Office. I read them on Saturday morning,” Douglas said.
“I’ve learned from other people’s mistakes how to better manage and organize the town’s financial procedures. We do internal audits to a standard recommended by State Comptroller’s Office.”
Over the years, the Town Council has implemented ongoing inventories of assets, time and attendance policy and segregation of duties.
In the official response in the audit report, Douglas said they are also working with the water/sewer software programmer to develop multiple types of user-fee data.
“We can now generate penalty reports, journal entry reports by district, unpaid balance reports, receivables reports by date, district, etc., and adjustment reports by billing cycle. The system now automatically (versus manually) applies penalties to unpaid balances after 30 days,” Douglas said in a reply letter to the comptroller.
The audit covered all aspects of town accounts, specifically “control environment, accounting records, financial condition, budgeting, cash receipts and disbursements, deposits and investments, purchasing and claims processing, payroll, capital projects and information technology.”
Water/sewer user fees drew the only criticism.
If there was one point of feedback, Douglas said, he hoped the comptroller would find a way to add kudos to the process.
“Even a one-liner,” he said. “They looked at 18 different things in our accounting process. Why couldn’t they put in one line that says — we looked at everything and then did a full audit on water and sewer; overall we found Jay in full compliance except for this one thing. They audited everything that we do in this town, and they focused on the negative.”
Nonetheless, Jay officials remain grateful for the review.
Douglas said the process can bring weak points in any town accounting procedures to light.
“The day they came and did the exit interview, the auditor came up here and told us how exceptional our office is. He said, ‘your people really, care and it really shows.’ Out of an A-plus through an F grade, we got an A. And I think the comptroller’s audit process is a tremendous asset for town government.”
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