Some Grand Coteau employees and officials aren't paying their utility bills on time - but they aren't being charged late fees, and their power isn't cut off, even though the policy requires that it is, an audit found.
Among other issues listed in the audit, the town did not pay its bills on time, didn't reconcile its bank accounts, didn't keep proper financial records and didn't follow state budget law, overspending its TIF budget by more than 8 percent. The town also failed to publish its meeting minutes as required by law, and didn't advertise its proposed budget, also as is required by state law.
The town promised in every case to follow these rules in the future.
The annual audit of the town of Grand Coteau found several issues with the way business was handled there. It was the town's regular auditors doing the usual audit of finances, for the fiscal year that ended June 2021. The audit was reported to the Legislative Auditor, as all annual government audits are, and the LA released the audit today.
If you'd like to read it for yourself, click here.
According to the state agency, the audit report had 13 findings, two of which were repeated from the previous year. Here are some of those findings:
- The auditor found that the Town lacked proper controls over the maintenance of personnel files and employee records, and the purchasing system.
- The Town did not prepare all bank account reconciliations for all months, failed to reconcile the general ledger with the detailed utility customer listing, and paid several invoices late, incurring late fees.
- The Town lacked complete and accurate records for customer meter deposits, and that some utility accounts, including those for Town employees and officials, were not being paid in full or timely, yet continued to receive service in violation of the Town’s cut-off policy and were not charged late fees.
- The auditor also found that the Town had an improper segregation of incompatible duties of accounting functions, failed to maintain accurate financial accounting records, failed to publish minutes in a reasonable time period, and did not comply with the Budget Act.
On the utility issue, the town provides gas, water and sewer services to residents. In reviewing those operations, the auditor wrote:
"The utility cut-off policy requires the Town terminate services to customers when an account becomes 30 days delinquent. The Town’s policy also requires that a late fee be charged if payment is not received by the 15th of the month. The Town has not properly followed its written policies and procedures regarding past due accounts and proper cut-off procedures to disconnect services relating to nonpayment by customers."
To fix that, auditors said the town "should consistently comply with its written policies and procedures in the future and cut-off utility services of customers, including employees and Town officials, who do not pay within the time limited stated in the policy."
The town's response was that it "will adhere to its cut-of policy."
The audit noted that the city's water and sewer system was operating at a loss, which is not legal for publicly-owned systems. That's not good news for city customers, because the recommendation was to consider raising rates to pay for the costs of the system.
"Failure to make a profit on utility sales could result in the Town not having resources to pay current expenses. The Town should consider increasing utility rates and/or decreasing expenses in order for the utility system to operate on a profitable basis," the auditor noted.
Combined, the water and sewer funds lost almost $100,000 during the fiscal year, about $43,000 in the water fund and about $77,000 in the sewer fund, the audit found.
On the issue of meeting minutes, a quick internet search indicates the town did live stream council meetings and budget discussions on its Facebook page during the fiscal year audited. You can see those live streams here.