Issued Date
January 21, 2022
Audit Objective
Determine whether the Town of Highlands (Town) Board (Board) and Town officials effectively managed the financial condition of the water and sewer funds.
Key Findings
The Board did not effectively manage the Town’s financial condition of the water and sewer funds.
- The Board did not monitor and amend the budgets as necessary.
- The water fund had a negative unassigned fund balance since 2016. As of December 31, 2020, the unassigned fund balance was negative $370,229 and the water fund owes $490,922 to other funds.
- Loans from other funds were not repaid by the end of the fiscal year, as required.
- For 2016 – 2020, officials budgeted for non-existing debt payments and reserve transfers that were not made totaling $430,000.
- Multiyear financial and capital plans have not been developed.
We also released Town of Highlands – Receiver of Taxes and Assessments (2021M-120), which reported water and sewer parcels were not properly billed and late payment penalties were not properly assessed.
Key Recommendations
- Make accurate estimates based on the most current and accurate information available for revenues and expenditures to ensure the water and sewer funds remain self-sufficient.
- Monitor and amend the budget as needed.
Town officials generally agreed with our findings and indicated they plan to initiate corrective action.