​SUD to Retain TUA to Verify Financial Transactions

by Leslie Lytle, Messenger Staff Writer

At the April 24 meeting of the Board of Commissioners of the Sewanee Utility District of Franklin and Marion Counties, the board resumed discussion about hiring a third party to verify financial transactions to avoid an audit finding of “inadequate segregation of financial duties.”
“That’s been on the audit every year since I’ve been here,” Beavers said. The finding is typical of small utilities such as SUD, which only has three office employees counting Beavers. For financial duties to be adequately segregated would require six office employees, Beavers noted. SUD cannot justify hiring three additional employees.
As a possible way of circumventing the criticism, the SUD board investigated employing an independent contractor to verify financial transactions, but just prior to the meeting the board learned from the SUD auditor third party verification would not eliminate the finding.
Commissioner Art Hanson pointed out the comptroller might not agree with the auditor’s conclusion in the event SUD showed due diligence by retaining a third party to review finances.
Following much discussion about hiring a local person, the board agreed with Beavers’ recommendation to retain Tennessee Utility Assistance (TUA), a firm approved by the Tennessee Association of Utility Districts (TAUD).
“The comptroller would more likely be satisfied with the TAUD recommended person,” Commissioner Randall Henley said in support of Beavers suggestion.
The board voted to engage TUA for six months and revisit the decision if the rate increases. Engaging TUA will cost $500 for the first two months and $300 per month after that.
In other business, Beavers updated the board on plans to replace deteriorating cast iron waterlines on South Carolina and Florida avenues. In keeping with the University’s request, SUD will also include Clara’s Point Road in the rehab project. Replacing the cast iron pipe will reduce water loss and increase the flow to fire hydrants. Beavers hopes to have bids for the job by mid-June.
Addressing landowners concerns about possible tree removal, Beavers said landscaping would be “returned to acceptable according to the determination of the Domain Manager.”
“The University has been very helpful and wants to stay engaged,” Beavers noted.
The board revisited the discussion about SUD’s Cross Connection Policy, which requires backflow prevention devices to prevent SUD drinking water from contamination by fluid from outside sources. Beavers said he and another SUD employee would attend a certification class in June and recommend updates to the 10-year-old policy consistent with state requirements.
Although not widely known, circumstances requiring backflow devices include drink machines and sprinkler and irrigation systems.
Beavers said he would also compile a list of customers who would be in violation under the new rules. Before recommending penalties and the time frame for compliance, he wants “to get input from people who will be affected.”
Turning to the long anticipated Midway pressure boosting station, Beavers said the system was expected to go live in the very near future and customers would be notified of the exact day and time. Pressure increases of 15-20 psi or greater are anticipated and leaks could result.
The board elected the following slate of officers to serve in 2018: Charlie Smith, president; Randall Henley, vice-president; Art Hanson, secretary.