Last night, auditors with Two Hills Accounting & Consulting presented the results of their performance audit of the city’s water, wastewater and storm drainage utility funds. In November, City Council approved a resolution awarding a contract to the firm to conduct a forensic audit of the city’s Utilities funds dating back to 2008. A draft copy of the report was released March 4.
View the final report here and the PowerPoint presentation here.
During the audit, Two Hills Accounting & Consulting completed the following objectives for the periods 2008 through June 2019:
Analyzed the source of Utilities’ funds revenue including operating or rate revenue and plant investment fees for the periods 2008 through June 2019. Confirmed that the source of funds tied to financial statement balances reported in the Comprehensive Annual Financial Report.
Analyzed the use of funds, including operating expenses in comparison to the growth or expansion expenses for the periods 2008 through June 2019. Confirmed that the source of funds tied to financial statement balances reported in the Comprehensive Annual Financial Report.
Analyzed the operating and capital budgets to determine if the uses of funds by year were authorized and expended in accordance with City Council’s appropriations.
Compared budgeted operating expenses to actual operating expenses and budgeted capital projects to the amount spent on capital projects by year.
Performed additional substantive testing: during analysis, Two Hills identified certain areas whereby they recommended additional testing. This testing involved the request and review of additional invoices and other purchasing records to determine the nature of specific transactions.
Presented their final report to the City Council at a Study Session.
The final report recommended the city improve the following: development of annual budgets, recording and reporting systems, and controls over the procurement system. The City has been diligently working to make process improvements in these areas since last summer as noted in the final report.