Bookkeeping issues raised with Colyell Community Water Bookkeeping issues raised with Colyell Community Water Robert Stewart| Florida Parishes bureau July 22, 2013 Comments The Louisiana Legislative Auditor’s Office has told the Colyell Community Water Association in Livingston Parish that the nonprofit corporation’s bookkeeping practices need tightening. Officials from the association, though, say they are working to resolve the issues and have already fixed some of them. A letter from the Legislative Auditor’s Office, dated July 3, says state officials began investigating the water association’s books after an audit of the nonprofit’s 2011 financial statements found several issues. The issues, outlined in the letter, include bank accounts not being reconciled for the last six months; water services not always being cut off on accounts past due; and a lack of collection efforts on accounts past due totaling $6,686. “We encourage you to consider the seriousness of these issues and their potential to cause major problems for the operations of the association,” Legislative Auditor Daryl Purpera says in the letter. Allen Brown, an assistant legislative auditor, said the letter is merely a warning and not meant to serve as a form of punishment. “We have no indications of dishonesty — just some management issues that need to be strengthened,” Brown said. Mike Battle, a manager in the Legislative Auditor’s Office’s advisory services division, said state officials visited with the water association in May and June to discuss the issues. “They heavily considered what we were saying, and we had a lot of discussion about it,” he said. The Colyell Community Water Association is a nonprofit corporation formed in May 1973 to provide water distribution services to the Colyell community in Livingston Parish. It served 980 customers as of December 2011. The letter is addressed to Carlton Edwards, office manager for the Colyell Community Water Association, as well as the group’s board members. Edwards declined comment, referring all questions to Phil Hebert, an independent auditor who performed the 2011 audit of the association. Hebert said the association has been working on the issues ever since the 2011 audit was finalized. The association has “greatly reduced” its outstanding collections on accounts after sending letters last year to its customers telling them to resolve any payments past due, Hebert said. He said the nonprofit has begun formally writing business policies and procedures and recently switched to a new utility billing software to better track accounts. Hebert’s 2011 audit indicates that Edwards at times was the only employee handling financial transactions. That practice is frowned upon in accounting circles because it means no extra checks and balances are in place to catch errors — a philosophy known as “segregation of duties.” Hebert said it’s common for small organizations such as the Colyell Community Water Association — it employs four people — to have issues with segregation of duties. Hebert’s audit recommends that the association’s board president review bank statements before turning them over to the office manager so more people could check the books. Battle said state officials also recommended more involvement by the group’s board members.