Purpose of Audit

The purpose of our audit was to examine internal controls over the billing and collection of water and sewer rents for the period January 1, 2010, to March 15, 2013.

Background

The Village of Albion is located in the Town of Albion in Orleans County and has approximately 6,000 residents. The Village is governed by an elected Board of Trustees which comprises four Trustees and a Mayor. Budgeted appropriations for the general, water and sewer funds in the 2012-13 fiscal year totaled $6.5 million.

Key Findings

The Board did not establish adequate internal controls over the billing, collection and accounting for water and sewer rents.

• The Board did not properly segregate the duties of the water clerk. As a result, the water clerk billed, collected, recorded, deposited and made adjustments for water and sewer bills with only limited oversight.
• The Board also did not ensure that large meters were tested and calibrated on a regular basis to help ensure that bills, especially those for the Village’s largest customers (the correctional facility and other municipalities) were accurate.
• The water clerk did not deposit moneys intact or timely or issue duplicate receipts to provide accountability for set-up fees paid by new customers.

Key Recommendations

• Segregate the water and sewer billing, collection, recording, depositing and adjusting duties or implement compensating controls.
• Ensure that master meter is recalibrated periodically.
• Deposit all moneys collected intact within 10 days of collection and issue press-numbered duplicate receipts.