Comptroller audit focuses on village water operations

Gwen Chamberlain

New York State Comptroller Thomas DiNapoli's office has completed an audit of the Penn Yan Village water operations between June 1 and Oct. 11, 2012. The scope of the audit was expanded back to 2007 to review fund balance and budgeting trends.

According to the press release that accompanied the final report, auditors found the village board has not adopted appropriate policies and did not receive or review sufficient financial information to appropriately monitor water financial operations. "The board has consistently adopted budgets containing inaccurate water plant expenditure estimates, which resulted in large adjustments to municipal billing," it says.

Penn Yan Mayor Robert Church said the audit reflects the fact that while the board and village employees do have procedures, they aren't in written form. "We have no problem with what they (auditors) are doing. We just have to get our corrective plan in writing and submit it," he said Monday morning.

Penn Yan Village officials have 90 days to prepare a written plan of corrective action.

While the auditors did not find any material errors or irregularities in billing and collection of water rent from customers, they did find that village officials had not establish formal regulations to define and allocate water plant costs.

The village sells water services to other municipalities — Jerusalem, Benton, Milo and Dresden.

The auditors say that Penn Yan is inappropriately billing other municipalities for unknown future capital costs, holding this money in a reserve fund that was not legally created.

This resulted in the village billing other municipalities $104,900 for potential future capital costs without an agreement or approved plan.

The audit report details an instance in which auditors noted an inconsistency in allocating employee benefit costs to municipal water customers. When the clerk/treasurer at the time, Shawna Wilber, was informed of the inconsistencies, she updated budget calculations without notifying or obtaining board approval.

The clerk/treasurer made other unapproved adjustments as well, and sent bills significantly late (three to seven months after the end of the quarter).

Also, the village did not test master meters for accuracy. Church explains Penn Yan officials assumed checking the meters was a responsibility of the other municipality, since the equipment is owned by the other town or village.

In his reply to the auditors, Church said village officials agree with the report.

"In particular, we recognize the importance of written policies and procedures consistent with the terms and conditions of the inter-municipal water agreements. While steps have already been taken in recent months which address some of the recommendations, we will ensure that these are adequately covered as we develop our corrective action plan," he wrote.