LISBON - A routine audit of the Buckeye Water District resulted in nine citations for failing to follow mandated bookkeeping procedures and other recommendations on how to do things better.
The non-compliance citations resulted from a routine state audit of BWD books for 2010 and 2011. The following is a list of citations for failing to comply with state bookkeeping procedures:
- In 2010, the BWD purchased a crew cab truck from America's Body Work for $42,915, which would have required competitive bidding since the dollar amount exceeded $25,000. "The District was unable to provide support that this purchase was properly bid, with the lowest and best bidder being awarded the contract," according to State Auditor David Yost, in the management letter that accompanied the audit.
BWD Director Al DeAngelis said there was no reason to seek bids because the company was the only one in the area that sold the particular truck with the specifications being sought.
- The BWD failed in 2010 to create funds for bond payments, which are used to pay for specific construction projects, with debt payments instead being recorded in the water operating fund. Yost said a bond payment fund needs to be established for each bond series. "This would ensure debt activity is accurately accounted for and the terms of debt covenents (sic) are met," he said.
DeAngelis said they had a reserve account into which they deposited money to cover bond payments, but the state insisted there be a separate bond payment fund.
- The BWD failed to file its 2010 annual financial report in the prescribed form established by the state.
- In 2011, BWD officials charged $250 for meals on a BWD credit card without attaching the necessary documentation showing who was in attendance and why the meal was necessary. They included meals at Casa DeEmanuel in East Liverpool, Dee Jays in Weirton, W.Va., and three meals at McDonald's.
Two meals were purchased with a BWD credit card in 2010 at Casa De Emanuel that failed to include the required supporting documentation, but this did not result in a non-compliance citation.
"That was my fault," DeAngelis said of the lack of accompanying documentation. "I just probably handed over the receipts and forgot."
These meals, described by DeAngelis as "work sessions," involved staff and/or board members and often occurred during long work days when they were involved in a particular project, he said.
- Funds were transferred several times from the general fund without the BWD board's authorization, and enterprise debt service funds were created without board approval.
- The BWD failed to submit annual financial information about its two revenue bonds to the Electronic Municipal Market Access system.
- In 2011, the BWD was required to maintain a minimum reserve of just over $2 million for revenue bonds, but the current reserve was $1.89 million because of some equipment purchases.
The reports also contained a series of recommendations based on what was found during the state audits. One of those recommendations addressed cell phone usage policy, which the state audit found deficient, resulting in the BWD paying for "coverage costs on cellular phone bills for text messages in excess of the district's plan allowance" in 2010, Yost wrote.
The audit report noted this occurred again in 2011, with the district again paying for text messaging in excess of policy allowances.
DeAngelis disputed this, saying the cell phone plan they have has unlimited text messaging, so no additional costs were incurred.
The state also issued a number of bookkeeping recommendations regarding spending transactions and how they were recorded. The state found that amounts paid did not always agree with the invoice, that some invoices were paid twice, interest payments were incurred for late payment of bills, and the vendor name on record failed to always match the check.
The audit also found the signature cards on file at Huntington National Bank included the names of past BWD board members, overtime payrolls reports were not always approved by a supervisor, and the board meeting minutes failed to reflect detailed financial information that should be included.
Huntington National Bank is no longer their main depository and the only account they have at bank is less than $1,000, DeAngelis said. As for the late payment penalties, he said this occurred just once and during the transition period after their fiscal officer resigned and a new one was hired.
DeAngelis said much of what is in the audits are items the BWD is made aware of at monthly finance committee meetings, which is when they go over budgetary items in detail. He said there is no need to go into the same detail during the financial report at regular BWD meetings unless a member has a question.
DeAngelis noted there were no findings for financial recovery, which are the most serious citations that can result from a state audit. "I thought, overall, the audit went rather well, and they always have to come up with something," he said.