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Fayetteville audit committee cites inventory improvements, aging pipes and budget pressure as audit priorities for 2025
Summary
The internal auditor reported inventory-count improvements for water and sewer, noted higher inventory value tied to rising copper prices, and described planned 2025 audits and follow-ups; members also discussed aging transmission lines, an $85 million project and tight general-fund revenues that limit new hires.
Aaron, the city's lead internal auditor, told the Audit Committee that the water and sewer inventory count showed meaningful improvement: the count variance fell to -0.2% from -3% the previous year after targeted monthly counts of high-value parts. "The count variance was down to a negative point 2% as opposed to negative 3% than it was last year," he said.
Aaron also noted inventory value rose about $170,000 year over year and attributed part of that increase to higher commodity prices: "Last year... it was $9.50 last year per foot, and this year it's $11.06," he said referring to copper pipe per-foot pricing. Committee members tied those inventory issues to broader infrastructure concerns after recent pipe failures at MLK and Razorback.
A committee member described the city's approach to aging transmission lines: the city is pursuing proactive capital work and adding two water-and-sewer teams to respond to leaks, and staff are pursuing a major new transmission project estimated around $85,000,000 to improve system resiliency. "That's an $85,000,000 project," the member said, noting the project would allow the city to take other transmission lines offline for repairs.
On staffing and budget, committee members discussed whether the internal-audit office needs an assistant auditor; Aaron said additional capacity would allow more audits but that current budget constraints make a new position unlikely this year. Separately, staff warned of soft revenues and projected general-fund pressure: one member cited possible losses "as high as $2,500,000" and later referenced a roughly $3,000,000 deficit projected into 2025.
Aaron laid out the 2025 audit plan: Q1 retirement savings plan review, parks-and-recreation fees and cash-handling review, Q2 Novatime time-clock and overtime spot checks (including sensitive-role assignments), and a Q3 uniform-and-boot policy review. He also said he will schedule fleet, airport-fuel and roll-off dumpster counts and consider surprise petty-cash counts when practicable.
Next steps: Aaron will proceed with scheduled counts, begin the 2025 audit calendar and return with findings; the committee asked staff to factor capital and staffing constraints into future audit priorities and to circulate draft financials earlier where possible.
