Purpose of Audit

The purpose of our audit was to assess the water fund’s fiscal health and operations for the period January 1, 2010, to December 31, 2011.

Background

The Town of Ballston is located in Saratoga County and has a population of approximately 8,000. The Town Board is the legislative body responsible for managing Town operations. For fiscal year 2012, appropriations totaled $5.9 million, including appropriations of $1.1 million for the 12 water districts.

Key Findings

• The Town’s accounting records and records were not properly maintained. As a result, officials have not received the accurate and timely information necessary to evaluate the water fund’s fiscal health and take appropriate corrective action. Specifically, at the end of the fiscal year 2011, the Town reported a fund balance of $520,771 in its water fund. However, upon reviewing the general ledger trial balance and supporting documentation, we found the water fund balance was overstated by at least $271,264. The majority of this overstatement was the result of $242,581 of capital project funds that were recorded in District 2. At the end of 2011, the Town recorded a fund balance of $285,936 for District 2. However, after all adjustments, the District’s fund balance was a deficit of $209,317.
• Weaknesses exist in the internal controls over the billing and collection of water user charges. While our testing only identified concerns over the lack of assessing of fees for estimated billings, which could have generated an additional $22,500 in revenue for the water districts, the lack of adequate segregation of duties and independent verification or review increase the risk that errors and irregularities could occur and go undetected.

Key Recommendations

• Develop a plan to address the condition of the Town’s accounting records and ensure that the Supervisor properly maintains the Town’s financial recordkeeping system. Develop a plan to eliminate the fund balance deficit in Water District 2.
• Develop a procedure to determine when to assess or waive the $100 estimation fee. Reassign duties in the Water Department so that incompatible duties are not performed by the same employee.