Purpose of Audit

The purpose of our audit was to evaluate the financial condition of the water and sewer funds for the period June 1, 2007 through March 15, 2013.

Background

The Village of Bolivar is located in Allegany County. The Village is governed by a Board of Trustees consisting of a Village Mayor and four Trustees. For the fiscal year ending May 31, 2013, budgeted appropriations totaled $444,000 for the general fund, $168,000 for the water fund, and $183,000 for the sewer fund.

Key Finding

• The Board has not adequately monitored the financial condition of the water and sewer funds. Adequate financial reports were not provided to the Board on a monthly basis. Therefore, the Board has not ensured that adequate cash balances are available to fund expenditures as they come due. Prior to May 31, 2008, the sewer fund borrowed a total of approximately $64,000 and the water fund borrowed a total of approximately $54,000 from other funds, principally from the general fund. The water and sewer funds do not presently have sufficient resources to repay the full amount of these interfund loans without affecting their operations.

Key Recommendations

• Adopt policies and procedures for monitoring the financial condition of the water and sewer funds to ensure recurring revenues, including user rates, are adequate to fund recurring operating expenditures.
• Use financial reports to monitor the Village’s operations.
• Develop a plan to repay outstanding interfund loans or authorize interfund transfers to repay all or a portion of these loans.