Purpose of Audit

The purpose of our audit was to determine if Town officials are adequately monitoring water loss for the period January 1, 2012 to August 12, 2013.

Background

The Town of Friendship is located in Allegany County. The Town is governed by an elected Town Board composed of a Town Supervisor and four council members. Budgeted water fund appropriations for the 2013 fiscal year totaled $193,819.

Key Finding

• Neither the Board nor the Department of Public Works Superintendent has taken adequate steps to identify and reduce the amount of water loss within the Town’s system. Town officials failed to periodically compare the amount of water produced with the amount billed for, and were not aware of the extent of water loss until we brought it to their attention. We compared water production reports with water billing registers for six consecutive quarters and found that the Town’s water loss over that period totaled approximately 63 percent of water produced. Water loss was more than 57 million gallons over the six quarters, or an average of 9.5 million gallons per quarter. The cost to produce this water for the period totaled approximately $176,000.

Key Recommendations

• Implement procedures to determine the causes of water loss and take steps to address the causes as they are identified.
• Periodically reconcile water produced to the amount of water billed and otherwise accounted for to determine