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November 17, 2010


DiNapoli Audit: More Than $1.3M in Billing Errors by the Binghamton-Johnson City Joint Sewage Board

Significant errors in the Binghamton-Johnson City Joint Sewage Board (Board) process led to more than $1.3 million in billing errors,according to an audit released today by State Comptroller Thomas P. DiNapoli.

“There’s a lot of focus on the benefits of shared services, and there’s a clear path to savings through these types of agreements,” DiNapoli said. “But it has to be done right.  The Board needs to straighten up its billing problems and deliver the benefits this partnership promised.”

Municipal users other than Binghamton and Johnson City (Owners) were over-billed by a total of $341,600.  Binghamton was over-billed $145,300 and Johnson City was under-billed $436,400 for the 2008 final billing. In addition, Frito-Lay North America, Inc. and Crowley Foods were under-billed by a total of $392,900 during the audit period

The Board, which is comprised of six members, is responsible for the daily management and operation of the plant, including setting sewage service charges for industrial users and septic haulers, billing, and collecting charges from all users. The plant provides services to the Owners and to nine other municipal users. The plant also provides services to several septic haulers and to various industrial users, including Frito-Lay and Crowley, which are charged industrial wastewater surcharges.

The audit generally reviewed the Owners’ and the board’s management of the joint sewage operations for the period of January 1, 2008 to June 26, 2009.  

DiNapoli’s audit found there were significant errors in the system’s billing process, and final billings may need further corrections because the Owners and the Board did not have a system to verify the accuracy of reported data and did not require users to follow a consistent method in reporting sewage flows,

DiNapoli’s report also found that Johnson City did not maintain adequate accounting records or a detailed budget for a capital project mandated by DEC.  While there was no indication that project expenditures exceeded authorizations, it is important that the Village improve its documentation and oversight of project expenditures to help ensure that the Owners pay for only legitimate project costs.

The audit recommends that Johnson City, as lead agency, should maintain adequate capital project records including a detailed budget and a list of expenditures over the life of the project.  

DiNapoli’s report also recommends that the Board and the Owners:
  • Develop a plan and set procedures to address the over- and under-billings identified in this report  and develop a system to ensure that reported final flows are accurate and equitable for all municipal users (including the Owners);
  • Amend worksheets to include the reported sewage flows from the Town of Fenton and Town of Conklin when determining the debt service unit costs;
  • Ensure that operating and debt service costs are accurate when determining unit charges for industrial users; and
  • Prepare an adjusted bill based on actual costs at the end of every fiscal year according to the agreement between the Board and Frito-Lay.

Officials from Binghamton and Johnson City and the Board generally agreed with the audit findings and noted that changes in the billing process were already under way.  

For a copy of the report, Click Here.



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