Report No. 2010-34
March 2010
Complete Audit Report
The following findings were included in our audit report on the City of St. Louis, Department of Public Utilities.
The city does not pay the Water Division for water use at city owned facilities (approximately 300 structures). Water is also consumed, but not paid for, by the city for other purposes including parks, fighting fires, and watering right-of-way property. Most city water usage is not metered; however, usage for Forest Park alone was estimated to be $6.7 million annually.
The division has historically implemented large water rate increases infrequently, rather than smaller, more frequent increases, which potentially creates financial stress on individuals and families with low and fixed incomes. In addition, the division has not prioritized its list of system improvement projects to be funded with expected bond proceeds, and has not obtained and reviewed the City Collector of Revenue's settlement of fees to ensure excess water division fees have been returned to the division.
Monies received by the Water Division are not logged or receipted to allow reconciliation of monies received to monies transmitted to the City Collector of Revenue, and checks are not restrictively endorsed upon receipt. The duties of reviewing and approving customer account adjustments are not adequately segregated from the duties of collecting and receiving customer payments. Accounting duties and responsibilities for managing non-customer accounts receivable and water customer deposits are also not adequately segregated. In addition, collections are not adequately safeguarded when they are transmitted to the City Collector's office.
Inventory controls and procedures do not adequately ensure inventory balances and reorder quantities are maintained to provide only for current needs and prevent overstocking or stocking of obsolete items. Documentation is not maintained to show inventory balance adjustments are adequately investigated to determine the possible reasons for any inaccurate inventory balances. Procedures to monitor the pipeyard's fuel inventory and use reports are also not adequate. There are no procedures to reconcile the beginning and ending fuel balances to records of purchases and uses.
The division does not actively monitor the usage of the division's 180 vehicle fleet and, as a result, the fleet may be larger than necessary. An analysis of division records show of the division's 130 pickup trucks, service vans and passenger cars, 32 vehicles are used less than 6,000 miles per year. Such low annual mileage accruals may indicate some vehicles are not needed to accomplish required activities. In addition, based on division data, the division owns one pickup truck, van or car for every 2.7 employees.
Controls related to system access and data recovery are not adequate to properly protect the division's financial data from loss or unauthorized access, and backups of non-financial data are not adequately protected. Password controls of the general ledger system do not require active users to change passwords periodically. Backup tapes for the non-financial system are not stored at an offsite location.
Finally, the division paid approximately $1.7 million in overtime during fiscal year 2008, and has not performed a study to determine the optimum use of overtime versus hiring additional employees.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
