Audit reveals Lee County owed funds by Utilities Authority

LEESBURG — Lee County received an influx of cash Thursday as the Lee County Utilities Authority authorized the transfer of nearly $1 million to help clear up an internal clerical error related to county garbage collection fees.

At a joint special called meeting of both the Utility Authority board and the Lee County Board of Commissioners, the two entities agreed to the transfer of $984,406 from the authority’s operating account to the county’s cash reserves account as an up-front payment toward the $1,928,571 auditors discovered the authority owed to the county.

According to information from auditors Carr, Riggs & Ingram LLC, it was determined that money being collected on behalf of Lee County by the Utilities Authority for the past several years was not being transferred to county accounts and was instead accumulating in Utilities Authority accounts.

The $1.9 million figure consists of a beginning balance as of June 30, 2102, of $944,165, plus amounts of $238,335, $231,599, $237,161, and $277, 311 from years 2013 to 2016, respectively.

“Not all of our garbage revenue was being transferred to the county,” said County Commissioner Bill Williams, who also sits on the Utilities Authority board. “It was collected by the Utilities Authority and they just transferred it (to their own account).”

In discussing the matter Thursday, county and Utilities Authority personnel explained that because there was no mechanism in place to make the transfer of funds from one entity to the other, the funds were showing as cash in a Utilities Authority account and as a receivable on the county side.

Because the amount had been accounted for, the situation was not one of improper accounting or fund misappropriation, county leaders said.

“It was nobody’s fault,” said County Commission Chairman Dennis Roland. “It showed on the audit every time the audit was done. That was just an oversight on our part. Obviously, it’s been going up every year.”

Williams said when he first learned of the situation, he expected the matter would be cleared up by the Utilities Authority making a transfer to the county’s account for the full amount. However, the authority was unable to make a full amount transfer because part of the money that had accumulated in its accounts was used to purchase a belt press for the county’s wastewater treatment plant in 2016.

According to Chris Boswell, general manager of the Utilities Authority, the new belt press was needed to help turn wastewater into a dry product that could be properly disposed of and was replacing an older belt press that was being used when the county took over treatment plant operations in 1998.

“It had reached the end of its lifespan,” he said. “It’s a very expensive piece of equipment. The Utilities Authority used $200,000 it had left over from a bond issuance (to use toward the $1,141,000 price tag) and decided to pay the remainder out of reserves rather than finance it and pay interest.”

Boswell said the Utilities Authority, just like the county, had no idea the funds in the authority’s accounts shouldn’t have been there.

“We had no idea that that overflow money was in the account,” Boswell told the two boards. “We would have never used that money if we had known that. We would have never used it. Never.”

Williams immediately put Boswell and the authority board members at ease by saying no one with the county thought anyone had done anything intentionally.

“Nobody’s accusing anybody of doing anything wrong,” Williams said. “We just want to get this straightened out, and we’re going to move forward.”

Going forward, now that the Utilities Authority has paid $984,406 of the known $1,928,571 from 2012-2016, auditors will look at the books from prior years, likely going back to 2008 when the utility fee collections software was put into place, to determine if there are any other similar instances of funds not being transferred.

Additionally, the Utilities Authority, which is set to begin its budget meetings in the next few weeks, will crunch the numbers to determine a monthly amount it can transfer to the county for the remaining $944,165 it still owes.

“It’s just a matter of transferring from one entity to the other,” said Williams. “What we agreed to today, they’re going to give us the four years, which amounts to $984,406. Once the auditors do some more investigation on that $944,000 part, we’re going to work out a payment arrangement or something on the rest of it.”

While that will clear up the money owed to the county, it does not solve the root issue of the collected garbage fees accumulating in the Utilities Authority’s accounts.

County finance director Heather Jones said she is currently in discussions with the company that handles the billing and collections software the authority uses to collect the water and garbage fees from county residents in hopes that a software upgrade will fix the issue.