The Ottumwa Courier

Local News

November 14, 2012

State says no to sewer reaudit

OTTUMWA — The state auditor’s office said there was no reason to conduct a reaudit of Ottumwa’s sewer department after a councilman filed a petition last fall.

Councilman Mitch Niner filed a petition with the State Auditor’s Office last fall to perform a reaudit of the sewer department.

At several council meetings, Niner has said Ottumwans wouldn’t be able to afford the cost of the sewer project if sewer rates were to increase, while other council members and Public Works Director Larry Seals have insisted the change in rates all depended on what grants the city received.

While sewer rates did increase this year, city staff have said the increase would have been much greater had the city not been awarded a $16.2 million FEMA grant and had voters not passed the extension of the 1 percent Local Option Sales Tax last week.

Susan Battani, director of the financial audit division with the State Auditor’s office, said the office determined they were not going to do a reaudit.

“We didn’t find a basis to perform a reaudit based on the requests we received from the petitioners,” Battani told the Courier. “Based on this review and other information available, we determined we were not going to perform a reaudit.”

The petition included requests to reaudit the city sewer department, including sewer projects and potential sewer rate increases.

As a result, the state auditor’s office reviewed the city’s fiscal year 2011 audit report, as well as copies of paperwork from the independent auditors’ audit of Water Works and Hydro, including the sewer department.

“The projects and rate increases are within the scope of the council’s authority, to determine whether rates need to be adjusted, and which projects, if any, should be performed,” Battani said. “So it was really beyond the scope of the reaudit.”

Niner said he’s not surprised.

“I figured it was going to go that way, but I was just trying to make a point to make sure everything was above board, that sewer money was used how it should have been,” he said. “Several years ago, they did a loan out of the sewer department to buy golf carts.”

He said he wants to know that everything is on the right track with both the sewer department and Anderson, Larkin and Co., who performs the city’s annual audits.

“My opinion is that some of the [Ottumwa Transit Authority] problems should have been stopped with Anderson, Larkin,” Niner said. “Some of the stuff the state found wrong probably should have been caught by Anderson, Larkin.”

In September 2011, Brad Barnes, senior accountant for Anderson, Larkin and Co., said a reaudit of a specific city department would have gone into more detail than the city’s regular audit, which is more “broad-scope.”

“All they do is just check a few figures and if they jive, they don’t go any farther,” Niner said.

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