Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
State audit finds $190,304 in missed utility charges for Cosmopolis; council presses for recovery
Summary
A State Auditor's Office review of Cosmopolis's 2022'2023 records identified inadequate controls over utility-billing tables and a material shortfall of $190,304 in uncollected charges from a large customer (about $215,000 including tax). Council members urged legal review and pursuit of recovery options.
City staff told the Cosmopolis City Council on Jan. 15 that a State Auditor's Office (SAO) audit covering 2022 and 2023 found process weaknesses in utility-billing controls that led to both underbilling and overbilling in some cases and one formal finding for inadequate controls.
A finance staff presenter said the audit cost the city $32,900 (higher than the $25,000 estimate) because auditors did a deeper review, including earlier years. The presenter told the council that the single largest effect was a longtime underbilling for one large customer: "Our largest customer... resulted in just the charge alone... of a $190,304 of revenue that the city did not collect," the presenter said, adding that including tax raised the figure to about $215,000.
The presenter said the underlying cause was poor management of rate tables in the utility billing software and a lack of secondary review or sample-bill testing when tables changed. "Those tables just not being managed or maintained and no secondary review on those tables as well," the presenter said, and described new procedures: when tables are updated they will be reviewed by a second person and the first bill run will be sampled and checked manually for accuracy.
Council members responded with frustration and concern about fiscal exposure. One council member called the shortfall "totally unacceptable" given the city's tight finances and urged the attorney to explore recovery options, including liens on properties that owe water bills. The council asked the city attorney and staff to pursue options to recoup funds where appropriate and to report back.
The presenter said the SAO issued recommendations and one formal finding; auditors also recommended clearer resolutions that state both the effective date of rate changes and the billing cycle affected, to avoid running a bill early and producing overcharges. The presenter encouraged that resolutions be updated to specify the billing cycle and described plans to keep audit evidence in a New Year folder for future reviewers.
No formal motions to file suit or to levy penalties were taken during the meeting; council members asked staff to coordinate with the city attorney and to report on legal and collection options at a subsequent meeting.
