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Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Carmel – Water Accountability (2012M-74)


Released: September 28, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine accountability over the water operations for the period January 1, 2010 to October 12, 2011.

Background

The Town of Carmel is located in Putnam County, and has a population of approximately 34,300 residents. The Town Board comprises four elected members and an elected Town Supervisor (Supervisor). The Town's total expenditures for the general and water funds for 2010 were $17.3 million including $14.2 million in the general fund and $3.1 million in the water fund.

Key Findings

  • Town officials do not reconcile the amount of water purchased to the amount of water treated prior to distribution. As a result, they cannot account for a 14 million gallon water loss that was purchased from New York City (NYC) for sewer district #2, from October 2010 to September 2011, with an estimated cost of as much as $42,000.
  • Because Town employees do not periodically read water meters, the Town routinely estimates up to 72 percent of all the water bills sent out. Consequently, Town officials cannot calculate the actual amount of water loss for the entire water system. Estimated usage per the water bills sent to customers appeared to be low when compared to data from the United States Environmental Protection Agency (EPA). This may indicate that the Town is not billing the customers for all of the gallons that they use.
  • The Board has not adopted performance measures and has not effectively planned for the acquisition and replacement of vital capital assets and infrastructure for the water districts.

Key Recommendations

  • Periodically reconcile the amount of water purchased with the amount treated and billed, and identify and remedy potential causes of significant discrepancies.
  • Consider periodically reading water meters. Periodically review water bills to ensure that all meters are registering usage accurately and that customers are properly billed.
  • Develop performance measures to provide a mechanism for overseeing the water operations. Develop long-term capital plans for water districts to include replacement of the water meter.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236