Report No. 2010-63
June 2010
Complete Audit Report

Findings in the audit of the Public Water Supply District #1 of Caldwell County

Surcharge
The district assessed a $5 monthly surcharge only to customers in the City of Cowgill, due to the city's non-payment of an invoice the city is disputing. Although the district indicated it did not have a valid written agreement with the city regarding a sewer system installation and work performed by the Water Commissioner, the city was billed for the services provided. The city did not approve payment of the bill and the $5 surcharge was enacted to recover the cost associated with the oversight work. The $5 surcharge and the contract are items in dispute. Whether the surcharge is illegal or allowed is not clear in state law.

Controls and Disbursements
The district does not require the Water Commissioner to maintain a vehicle usage log, concerns were noted regarding fuel purchases, and commuting mileage is not reported to the Internal Revenue Service. Receipts are not deposited on a timely basis. There is little segregation of duties or oversight of receipts and disbursements. The district did not advertise or competitively seek proposals or bids for dumping bio-solids. The Water Commissioner is paid $40 an hour to haul away bio-solids, with payments totaling approximately $6,200 during the year ended December 31, 2009.

Budget and Audit
While a budget was prepared and adopted, it did not contain all elements required by state law. The district budget did not include a budget message, actual receipts and disbursements for the 2 preceding budget years, or beginning and ending cash balances. Although budgeted and actual disbursements are monitored, a budget amendment was not prepared before actual disbursements exceeded the amount budgeted. The district did not obtain an annual audit as required by state law for the year ended December 31, 2008, and has not had an audit for the past several years.

Policies and Procedures
The district does not post an agenda for Board of Directors meetings. In addition, district bylaws indicate regular meetings can be held without notice. The district does not have current bylaws documenting its fee structure and various policies regarding meter deposits, shut off fees, reconnection fees, replacement meter book fees, late charges, non-sufficient fund charges, and any other fees or charges that may be assessed. The district does not have written rules regarding various personnel matters, such as vacation and sick leave policies, overtime and compensatory time policies, work hours, employee duties and responsibilities, lines of authority, and grievance procedures. District procedures regarding access to records are not in agreement with its bylaws.

Complete Audit Report
Missouri State Auditor's Office
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