Auditor Barbara Boyd of Purvis Gray & Co., a certified public accountant firm, describes problems with Bronson utility billing practices in 2019 during an appearance before the town council Monday.
By Terry Witt – Spotlight Senior Reporter
Bronson mailed some of the largest utility bills in its history last year, all by mistake.
Barbara Boyd of Purvis Gray & Co., the town’s auditor, told the Town Council Monday the city was forced to adjust $1.2 million in utility bills in 2019. The errors were corrected after customers received the bills.
“There were some $50,000-utility bills that went out,” Boyd said Monday.
Mayor Beatrice Roberts later said Councilman Aaron Edmondson received a bill for more than $530,000.
Boyd said someone should have noticed the inaccurate numbers on the utility bills before they reached the homes of customers.
She was discussing the town’s audit report at a town council meeting.
“What this is saying, those bills should have been reviewed before they ever went out,” Boyd said. “You shouldn’t have a $500 customer getting a $50,000 bill without somebody noticing beforehand.”
In the meeting, Roberts said the problem resulted from a handheld device an employee was using to read meters. She said the bills were being sent out by the former public works director. He is no longer working for the city.
Boyd’s audit report also pointed out a problem common in many small governments including Bronson, which is the lack of employees to separate duties associated with handling money, making deposits, and in this case billing customers.
She said the adjustments to inaccurate utility bills in Bronson Town Hall were handled by the same person that allowed the bills to reach Bronson utility customers.
“The other issue, because of the (lack of) segregation of duties, the person who authorized those adjustments and who posted the adjustments also can collect cash and post cash receipts; that creates an opportunity for fraud and when you have $1.2 million in adjustments it really makes it difficult to identify which of those are legitimate adjustments and which may not be legal,” Boyd said.
The audit report also criticized the city for keeping the water and sewer utilities under one account. She said the town’s sewer loan with USDA requires the city to maintain separate accounts for water and sewer. She said the town is currently keeping water, sewer, and garbage collection under one account.
The audit report also identified $3,000 in Christmas bonuses that were given town council members and city employees in 2019 without deducting federal income tax. She said the bonuses should have been taxed.
There was a bright spot in the audit. In September of 2019, when the previous fiscal year ended, the city had $336,000 cash in unrestricted reserves that could be spent for any legal purpose. The cash reserves placed the city in a good position if it needs to access money for an emergency.
Bronson’s audit report recommended raising water and sewer rates to ensure the city can pay its debts connected with utilities. The report said the city’s operating revenues exceeded expenses, excluding depreciation, by $67,539 last year, but it wasn’t enough to meet annual debt payments.
“We recommend the town increase water and sewer rates to a level that will recover all operation expenses and pay annual debt service,” the report said.
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Town of Bronson Regular Meeting August 24, 2020; Posted August 26, 2020
