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Audit Objective

Determine whether the Village Board effectively managed the water service's financial operations.

Key Findings

• Complete and accurate accounting records were not maintained, the modified accrual basis of accounting was not used and interfund activity was not properly reported. As a result, the Board could not adequately monitor the water fund's financial operations.
• The Board did not properly segregate water billing and duties or establish compensating controls.
• Late penalties were not properly assessed on unpaid water bills.

Key Recommendations

• Maintain accurate accounting records including revenues and expenditures using the modified accrual basis of accounting.
• Segregate the Treasurer's financial duties or establish compensating controls, such as providing additional oversight of the Treasurer's work.
• Ensure billings comply with the Water Usage Law (WUL).

Village officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action. Appendix B includes our comment on an issue raised in the Village's response letter.