Imagine being able to read your own water meter and computing your own water bill. Does that sound far-fetched?
According to the Indiana State Board of Accounts that’s exactly the type of practice that auditors have been warning the City of West Lafayette against for at least the last two audit reporting periods. According to audit reports, Purdue University, the largest consumer of water in the city, has been reading their own meters and calculating their own bills for the 358 water meters at the university. State auditors have warned city officials about the risks of engaging in this type of unusual practice, and cites it as “a deficiency in the internal control system.”
The 2013 audit report filed on November 26, 2014 noted the following:
“a deficiency in the internal control system concerning the billing procedures for the Wastewater Utility’s major customer that we believe constitutes a material weakness…This major customer [Purdue University], which provided approximately 39 percent of the Wastewater’s revenue for 2013, reads their own water meters and calculates their own wastewater bill (based on water consumption) for each of their 358 water meters. They calculate and present their total wastewater bill, along with their payment, to the Utility each month. The Utility has not implemented any internal control procedures to verify that accurate meter readings are used to calculate the customer’s wastewater bill…Controls over the receipting, disbursing, recording, and accounting for the financial activities are necessary to avoid substantial risk of invalid transactions, inaccurate records and financial statements and incorrect decision making.”
A follow-up letter was submitted by the City of West Lafayette stating they would fix the problem. Apparently, the problem was not fixed, because the City of West Lafayette continued to be cited by the SBOA for the same problem. Another letter was issued by the City of West Lafayette on October 20, 2016 with a plan of how they will address the problem going forward.
State Board of Accounts auditors have stated in the past that they are merely a reporting agency, and that they have no enforcement powers. The frustrations for auditors and taxpayers are that most audit reports get filed away and are rarely scrutinized by the general public. There seems to be an accountability factor missing.
Previous audit reports were not readily available online, so who knows how long this practice has been going on.
Read excerpts from the aforementioned audit reports below. Click on to enlarge.