by Leslie Lytle, Messenger Staff Writer

At the March 27 meeting of the Board of Commissioners of the Sewanee Utility District of Franklin and Marion Counties, Paul Evans was sworn in to serve a four-year term as commissioner. Determining what financial transactions needed review in order to avoid an audit citation for “inadequate segregation of duties” dominated the discussion during much of the meeting.

In November, the board decided to hire an independent contractor to provide third-party verification of financial transactions. Like the many other small utilities in Tennessee, SUD’s audit routinely cites the utility for “inadequate segregation of duties.” SUD’s small office staff of three employees is insufficient to provide the level of financial oversight required by the state comptroller.

SUD Board President Charlie Smith estimated reviewing financial transactions would take four to five hours a month. The 2018 SUD budget allocated $150 per month to compensate the person or firm hired to perform the review.

Based on information from the comptroller and a recent Tennessee Association of Utility Districts (TAUD) commissioner training, Smith compiled a list of duties for the person providing oversight.

“There seems to be uncertainty as to whether the description of duties meets the comptroller’s requirement,” Evans observed. Evans suggested SUD consult their accounting firm for verification.

Smith said SUD did not employ an accounting firm, only an annual auditor.

The board discussed asking the auditor’s advice. SUD manager Ben Beavers pointed out that the auditor was interested in the job.

“They couldn’t be our auditor if they were doing the monthly review,” Smith noted. But he said he preferred “to keep the CPA bunch for potential auditors” and hire a local individual to perform the review.

“You don’t need a CPA for this,” Evans agreed.

Smith will seek the opinion of SUD auditor Mark Allen on what financial transactions needed review to satisfy the comptroller’s segregation of duties requirement.

A TAUD recommended service, which satisfies the requirement, charges $300 per month to review a utility’s financial transactions.

“That’s not an insurmountable amount,” Beavers said. “It’s well worth getting it taken care of if it costs no more than that. Getting this off our audit is what I want.”

Commissioner Randall Henley introduced a discussion about portable drinking machines requiring backflow prevention devices to keep foreign fluids and contaminants from entering the water supply. “A lot of places with drinking machines need backflow devices and don’t have them,” Henley observed.

Beavers said he didn’t believe drinking machines were included in the SUD backflow policy’s list of circumstances requiring a backflow prevention device. He noted the state routinely added new circumstances to the list, and the SUD policy hadn’t been updated in several years.

Beavers will check on the most recent state requirements and recommend review of the 40-page policy.

Scenarios requiring a backflow device include irrigation systems, wells, and any system with chemical feed. A loss of pressure can result in foreign and contaminated fluids being sucked into the drinking water supply.

In his manager’s report, Beavers commented on recent wastewater collection overflows at the Bob Stewman Road and Alto Road pumping stations. “Both overflow’s occurred due to check valves’ sticking,” Beavers said. “The system wasn’t overload,” Beavers stressed. “The overflows occurred due to mechanical failure. That’s an important distinction.” The valve at the Bob Stewman road site was repaired. The valve at the Alto Road site is being replaced.

The SUD board meets next on April 24.