Office of the City Auditor

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Issued: July 2004

SUMMARY

This report presents findings and a recommendation from our audit of the Planting for the Future fund.

Austin Energy’s collection and transfer of Planting for the Future fund revenues is complete and timely. Utility payment processing controls are in place and functioning adequately to ensure that contributions by customers through the check-off function on their utility bills are captured accurately. These controls focus on ensuring that the correct amount of each contribution is credited to the appropriate account.

We identified one step, “stacking,” prior to payment processing where a contribution might not be captured for processing. In this event, the amount of the contribution appears as a credit on the customer’s next bill, presenting a minimal effect.

Austin Energy processes contributions with utility payments on the day received, and then runs batch totals which post overnight to the appropriate accounts.

While the Parks and Recreation Department has spent Planting for the Future Funds largely in conformance with Council intent, fund accounting lacks appropriate transparency. With few exceptions, the Parks and Recreation Department has spent contributions to this fund in accordance with the fund’s purpose. And accounting for revenues has complied with accounting conventions with one notable exception.

However, the department has not consistently handled accounting for this fund in accordance with governmental fund accounting principles. Financial reporting for uses of funds lacks transparency. Expenditures from this fund, identified after research, are erratic from year to year and expected correlations do not exist. For example, there is no correlation between the money spent to purchase trees and the number of trees planted in any given year. The lack of steady trends and expected correlations makes the data unhelpful on a year-by-year basis to assess the efficiency of the uses of the Planting for the Future funds.

An estimate of unit costing can be accomplished using data spread over the life of the fund. By this method we calculate the following estimated unit costs charged to the fund per tree planted:

• average purchase expenditure per tree: $31.05;
• average labor expenditure per tree: $55.46; and
• average total fund expenditure per tree is $89.55.