Findings against Bellaire revealed
By MICHAEL SCHULER, Times Leader Staff WriterOHIO STATE Auditor Mary Taylor released the most recent audit for the village of Bellaire Thursday with five findings based on the village's financial statements for 2007.
The audit did not have any findings for recovery that would require the village to pay back money, but did include three findings for noncompliance and two for material weakness.
The two material weakness findings as well as one of the noncompliance citations were for the water metering; billing and collection, which could help explain why the village's water department has been losing money.
The state auditor gave the village a noncompliance citation for reportedly having 29 percent of test residential water customers being billed on estimated amounts rather than actual meter readings, while 32-percent of tested commercial utility customers did not actual readings of the water meter. The auditor recommended all water customers should have an actual meter reading "at least quarterly" and all major used be read monthly.
Non-metered customers and problems with the water department's billing software have been two of the reported causes for the deficit in the village's water fund.
In 2007, village officials began looking into possible causes for an increased deficit in the water department that was later determined to be the result of a change that was made to the base rates in the computer system.
In May 2008, village council moved money from the water infrastructure, grant fund and utilities fund generated from a 20-percent water rate increase in 2007 to the general water fund to help cover the more than $154,000 deficit currently estimated for the fund. Council also approved an emergency ordinance in May that established a $3.50 surcharge for all water customers that is earmarked for water infrastructure improvements to replace the funds lost to cover the deficit.
According to the audit report for 2007, commercial utility customer accounts showed changes to the estimated amount of water used and changes in the placement on the water-billing rate. The report read no evidence was shown that the village administrator or village council's utility committee approved the changes.
In the same finding, the report claims that, "Of the 25 commercial accounts tested, we calculated possible lost water and sanitation revenues in the amount of $12,459 and $19,251, respectively, due to the unauthorized changes in these accounts billing methodology."
According to Vince Gianangeli and Paul Spigarelli, members of the village's audit committee, the village has taken steps to correct of the findings in the report.
The 25 commercial accounts tested did not include all commercial accounts and the loss of revenue as a result could be as high as $82,000.
"That is the biggest thing and she (Village Administrator Rebecca Zwack) has identified $82,000 that is ready to be collected," Gianangeli said. "The letters just have to be prepared."
The state auditor also reported ordinances establishing the rates charged to customers could not be readily located and that rate structure charts for village utilities included "unexplained and/or unused codes and corresponding charges. As a result of not having utility rates formally adopted by village council, questions could arise as to the legality of these charges, rates, being charged may not be in accordance with village council's intent and customers may be charged inaccurate amounts . . ."
The second material weakness was for the village's lack of a process to show that customers are billed upon correct actual or estimated usage. Because the village did not have this, the auditor reports that 46-percent of tested customer's water filed showed "zero usage" for the second and/or third billing period." The report shows that the estimates were in the utility departments computer system for the first quarter but did not carry forward, but was corrected for the fourth billing period, but also claims that 20-percent of tested customers estimated usage was less than the original estimate and continued for seven additional billing periods.
That finding further states that because of the lack of a "high/low billing report" several customers were billed for amounts lower than their previous billing history, which may have resulted in a loss of revenue for the village that cannot be recouped.
The village was also cited on a noncompliance citation for paying obligations without a statement attached indicating the purchase was lawfully appropriated or it the process of collection to the credit of the appropriate funding. The citation also states purchase orders "contained the certification language; however, they were not signed by the village clerk."
According to Gianangeli, this is the most common type of citation for a municipality from an audit.
Another noncompliance citation was given after the expenditures from the Tax Increment fund and the Commerce Park fund exceed the appropriated amounts from the funds.
A full copy of the state auditor's report can be found at the auditor's Web site at www.auditor.state.oh.us/AuditSearch/Reports/2008/Village_of_Bellaire_07-Belmont.pdf.
Schuler can be reached at shoe@timesleaderonline.com
