Town of Warwick - Water and Sewer Fund Financial Condition (2018M-259)

Issued Date
April 12, 2019

[read complete report - pdf]

Audit Objective

Determine whether Town officials effectively managed the water and sewer funds’ financial condition to ensure the sustainability of current and future operations.

Key Findings

  • Four of the seven water districts experienced operating deficits during the audit period with totals ranging from $11,100 to $59,700, and are projected to have operating deficits in 2018. Four water districts also had deficit fund balances in 2017 ranging from $3,340 to $40,400.
  • The two sewer districts experienced operating deficits totaling $138,972.
  • Six water districts and one sewer district rely on general fund advances to finance operations, totaling $236,296 as of 2017.
  • Fairgrounds Sewer District had a 2017 deficit fund balance of $39,283 and a general fund advance with a balance of $45,662.

Key Recommendations

  • Develop reasonable revenue estimates for the water and sewer districts, and monitor and adjust budgeted revenues if needed.
  • Develop a plan to address the negative fund balances in individual water and sewer districts from prior fiscal years.
  • Ensure that interfund advances are made and repaid in accordance with statute.

Town officials generally agreed with our recommendations and indicated they have initiated, or planned to initiate, corrective action.