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State audit finds fault with Carnation utilities oversight

A state audit found the city of Carnation lacked sufficient oversight of its utility billings and collections due to insufficient staff.

Though state auditor's office investigators found no mishandling or loss of taxpayer money, it determined that, "Without sufficient oversight, the city cannot ensure the accuracy of utility billings and that all revenues due are received. This increases the risk that a loss or misappropriation could occur and go undetected."

The state recommended Carnation officials establish and follow controls over the utility billing and receipting process to include more oversight.

"[Changes to the process] were put into place when the auditor first brought it to our attention," said Carnation City Manager Candice Bock, who was hired in September 2006.

The audit covered the years 2004 and 2005. The state presented the city with a preliminary draft in October and the city immediately took action to correct the problems, Bock said. The final draft of the audit, including the city's response, was released Dec. 1.

"All-in-all it was a really good audit for us," Bock said. "It's always good to have them come in and take a look at what we're doing."

She noted that the audit didn't find anything wrong or illegal with the way the city handled business, just that without additional oversight the potential that money could be lost or mishandled existed. It found that:

* Reviews of meter reading were only performed if unusual readings are found;

* No one independent of the billing process reviews or monitors the process;

* No one independent of the adjustment process reviews or approves adjustments;

* Five city employees have full access to the billing system software but only one is involved in the billing process;

* The city relies on an automated utility system but employees don't understand how it works.

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