Audit Finds Problems with Financial Operations of Jonesville's Utility Systems
The independent auditor could not provide an opinion on the financial operations of the Town’s business-type activities and its proprietary fund because he could not obtain sufficient information, the Legislative Auditor said in a report released today.
The business-type activities of the Town are those that charge a fee to customers for such services as electricity, water, gas, and sewer. Also included are interest payments on long-term debt. The Town maintains one proprietary fund to account for its combined electric, water, gas, and sewer operations. The auditor said that the Town’s internal controls for its business-type activities and proprietary fund were either ineffective or were not operating as designed, and that bank accounts and subsidiary ledgers were not being reconciled to the general ledgers.
Among its 12 findings, the report listed:
· Accounts receivable from utility customers were not reconciled to the general ledger.
· Some transactions entered into the utility billing system were not posted in the general ledger.
· Water and utility system transactions were not included in the proprietary fund’s financial statements.
· Transactions related to certain U.S. Department of Agriculture notes and bonds payable were not recorded in the general ledger.
· The Town was unable to provide a customer meter deposits report that was reconciled to the general ledger.
In addition, the Town’s audit report, which is for fiscal year 2015, was submitted after the statutorily required six-month deadline. As a result, the Town was placed on the Legislative Auditor’s noncompliance list, the state auditor said. The Town’s 2015 fiscal year ended on June 30, 2015, and the audit report was due by December 31, 2015.
The audit report also noted the findings of an investigative report released by the Legislative Auditor in January 2016. In the investigative report, auditors said they found utility payments totaling $93,841 were received and/or recorded but not deposited into the Town’s bank accounts between December 2014 and September 2015. The Town also did not have adequate financial management procedures in place for its utility systems.
For more information contact:
Legislative Auditor
225.339.3800