Amador County – Amador Water Agency last week heard an audit report from fiscal year 2010-2011 which showed $620,000 in cash, but internal fund transfers made up much of the money, and the board requested clarification of the report.

Auditor Michael Zizzi of Leaf & Cole gave a report on the audit of the fiscal year ending June 30, 2011, and said operating revenue was $8.6 million dollars and operating expenses were $12.7 million, leaving an operating loss of $4.07 million dollars. That was compared to the 2010 operating loss of $2.68 million, with $11.6 million in expenses and $8.78 million in revenue.

He said the agency has $619,000 in cash, which included cash and equivalents, investments and restricted cash and their equivalents.

In public comment, Bill Condrashoff questioned the cash amount on the audit report, saying it differed from a Government Code 66013 report, which listed $36,000 dollars in restricted cash funds. Condrashoff accused the agency of having one document for the public and one document for the auditor. He also questioned the propriety of using restricted funds in loans to other systems in the agency.

Agency Counsel Stephen Kronick said “fees that are subject to Government Code 66013 are considered restricted funds,” but “66013 does recognize that there can be loans from those fees.” He said the reports actually describe interfund transfers.

AWA General Manager Gene Mancebo said “there are no two sets of books. There is one set of books.” He said 66013 is a cash balance type of report and the audit is on an actuarial basis.

Zizzi and AWA Controller Marvin Davis conferred over the numbers during a break and Zizzi said they are derived from the same documents. Zizzi said the agency has a cash balance of negative $528,000, debt reserve funds of $535,000 and a participation fee sum of $612,000. Combined, the bottom line is “the agency has $618,000 in cash. The question is how we are using those funds.”

He said it loans money from restricted funds to operating cash. Director Robert Manassero said using restricted reserves was legal under Government Code 66013.

Board President Gary Thomas said the money was being used as interfund loans before he got on the board, and they have memorialized some of the loans but need to go back and do more. Thomas said “we’ve captured it for the most part on how those funds come out.” Director Paul Molinelli asked if the agency is using restricted funds for operating. Zizzi said it appears obvious, but it does need more study to see.

Mancebo said “we do show the interfund loans. We need to segregate them and figure out which is which.” Directors directed staff to clarify the amounts in the audit report. When done, Mancebo said he will consult with the President on how to proceed.

Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.