By Cain Madden

The Natchez Democrat

Clayton — An independent auditor recommended that Clayton consider raising utility rates, but Mayor Rydell Turner said he believes that can be avoided for now.

The Vercher Group of Jena, in auditing the budget cycle ending June 30, 2015, found Clayton has been running a negative cash flow from operations during the past two fiscal years.

Total revenues for the town’s enterprise funds including water, sewer and gas were $235,643 and expenses were $399,795, which is an operating loss of $164,152.

Revenues decreased by $317,919 from the previous year due to a decrease in capital contributions in the amount of $279,339, auditors reported.

The Vercher Group recommended that the town do a study on raising the rates. However, Turner did not think Clayton should do that at this time.

“That is something we might have to look at later on,” he said. “But right now we are not going to raise the rates.”

Turner said the problem is that when people get behind on their utility bills, it can quickly become unaffordable for some town residents.

“I think if we can get people to pay on time, it will be OK,” he said.

Factoring only the town’s 273 water customers in the deficit, Clayton lost $600 per customer.

The last time the water rates were increased was in March 2013, and Turner said it has been longer since the gas and sewer rates increased.

It is $18 for the first 2,000 gallons of water and $3.20 for each additional 1,000 gallons used by the town’s residential water customers.

The sewer rate is $15 per month.

The residential gas rate is $22.80 for the first 2,000 cubic feet used and at a decreasing rate starting at $19.26 for the next 1,000 cubic feet.

Turner thought the rest of the audit, which was released by the Louisiana Legislative Auditor this week, went pretty well.

“There were some minor things, but we can make some adjustments and proceed from that point,” he said.

In the governmental funds, the town’s assets exceeded its liabilities by $1,065,604. This is a $125,219 decrease from last year.

The town had a total revenue of $343,523, which is a decrease from last year. The main reason was the loss in grant monies by $25,000.

Total expenditures were $409,796, which is a $41,999 increase from last year.

Other issues in the report included two internal control problems and three compliance violations.

4The small size of the town combined with a lack of separation of duties of employees is conflicting with elements of good internal controls to ensure protection of the town’s cash. Without adequate oversight, an employee has an opportunity to embezzle.

The town responded that management would continue to provide the necessary oversight, specifically in the area of cash receipts, collection receipt activities, recording cash receipts, depositing of funds collected and review of checks written.

4The town failed to amend its budget to account for an unfavorable expenditure variance of $191,013. Law requires government bodies to amend their budget when revenues fall by more than 5 percent.

4The town used restricted cash from the public works fund to pay for maintaining ditches for drainage and general fund expenses. The response from the town was that council had requested an attorney general’s opinion to determine how the road tax funds could be used legally.

By ordinance, it is restricted for constructing, hard surfacing, improving and or maintaining public roads and streets in the district.

4Because of insufficient funds to pay the auditor, the town did not file its financial statements with the legislative auditor on time. The town claimed it would correct this going forward.

4Finally, the auditor discovered that $700 in travel and training expenditures was not fully documented. The town reported it would have better oversight of travel expenses moving forward.