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Schell City receives clean audit, but needs improvements
Nevada Daily Mail
Schell City received a fair, clean audit as reported by Renda Armstrong, DSWA auditor, at the Schell City Board of Aldermen meeting Wednesday.
"In our opinion the financial statements present fairly in all material respects the financial position of the city as of Dec. 31, 2013, on the cash basis," Armstrong said. "Overall the city had $57,622 cash in the bank, and your cash balance increased $6,914."
Armstrong strongly suggested the town increase its water rates to pay for the water project to connect to Consolidated Public Water Service District No. 1 of Vernon County to provide the town with water by constructing water lines, a 300,000-gallon water tower, well house, aerator and electronic controls.
"You have $266,000 of outstanding debt now with Rural Development," she said. "Since the financials have not been closed out, we don't know the final terms of what your monthly payments will be on principal and interest. The preliminary estimates of your payments is about $1,000 a month until it's paid in full. If you continue operating the way you are here, you're not going to have enough money in a couple of years to sustain those debt payments."
Armstrong also gave recommendations on documentation and state statute compliance. While the town's deficiencies were not earth shattering, they are important issues to address, she said.
"We found material weakness, lack of controls to find and correct errors on a timely basis, in the segregation of duties," she said. "The clerk does everything except read meters. What I would highly recommend is you have somebody outside of the clerk review original bank statements, review bank reconciliations, review the checks that clear the bank and review payroll."
She suggested computerizing the town's books and utility billing to minimize errors and increase efficiency as well.
"You had a significant deficiency, less serious problem but still needs attention, on written internal control documentation and risk assessment," she said. "We highly recommend you document your procedures for handling monies. Then you calculate the risk for theft or fraud. If something were to happen to the clerk and somebody had to step in, then you have written procedures for them to follow. Having those things written, protects the assets and the city clerk."
State statutes Schell City needs to adhere more closely to include passing a budget, following tax levy hearing regulations and making sure all minutes are recorded properly.
In other business, the aldermen set the tax levy hearing for 6 p.m. Aug. 19, billed properties for mowing and discussed who to choose for the Fall Festival's Citizen of the Year.