Purpose of Audit

The purpose of our audit was to examine whether Village officials ensured that water, sewer and electric user charges were properly billed, collected, recorded and deposited for the period June 1, 2012 through January 30, 2014.

Background

The Village of Frankfort is located in the Town of Frankfort in Herkimer County and has a population of approximately 2,600. The Village is governed by an elected Board of Trustees, which comprises the Mayor and four Trustees. Budgeted appropriations for the 2013-14 fiscal year are approximately $592,000 for the water fund, $72,000 for the sewer fund and $2.1 for the electric fund, all of which are financed by user charges.

Key Findings

• Village officials have not adequately segregated the duties of billing, collecting and recording or provided oversight over the two account clerks, running the risk that billings could be inaccurate because of improper adjustments and discrepancies could go undetected.
• Village officials did not designate someone to approve adjustments and did not ensure that an audit log of the adjustments was maintained.

Key Recommendations

• Segregate the water, sewer and electric duties of billing, collecting and recording to the extent practical and provide oversight and an independent review of work when adequate segregation is not practical.
• Require a designated official’s prior approval for all billing adjustments and written documentation of the reasons for such adjustments, their amounts and the dates approved.