SAUK VILLAGE FINANCIAL MESS - You can't pay? Village wants to charge more!

This is the seventh in a series of revelations of the 2014-15 Audit Report.  The Village was delinquent in filing their audit with the Illinois Comptroller (due December 26, 2015).  The Audit report (see attached link at the end of this report) reveals the status quo with the Village finances continues with 3 years into David Hanks’ Administration.

SAUK VILLAGE |  When it comes to the finances of the Village clearly there has been a lack of attention to detail, especially when it comes to investment, assets and the Village’s public utility.  At last night’s Village Board meeting David Hanks’ political lackey and Village Administrator J.W. Fairman recommended raising the reconnection fee for water when the Village shuts the water off due to nonpayment.   The reconnection fee currently is $25 if paid before 3pm or $75 if paid after 3pm according to Community Development Director Sherry Jasinski.  Fairman wants to raise this to $250.  “When people cannot afford their water bill in the first place, how in the hell can they afford an additional $250 to have it turned back on” Trustee Derrick Burgess said following the meeting.

With all that said, the Village seems to have its own problems managing the water fund receivables according to the Village’s audit management letter.  The following is an excerpt of that letter:

17.   Outstanding Utility Bills (Repeated from Prior Year)

We noted that various residents have long-outstanding unpaid utility bills, and that receivable balances are escalating.  We recommend that the Village review its policies and procedures with regard to the collection of utility receivables.  Implementing these policies and procedures on a timely basis could improve cash flow.

(Editorial Note:  Is increasing the water reconnect fee a way we have reviewed the policies and procedures regarding collections?  If people could not afford to pay their outstanding debts and the village allowed them to accumulate a “high balance” then logically, they need to work out arrangements with the user.)

16.   Capital Asset Capitalization Policy (Repeated from Prior Year)

The Village does not have a formal written capitalization policy.  We suggest that the Village develop, and the Board approve a form written capitalization policy.

(Editorial Note:  Really?  This is a repeated finding by the Auditors!  Way to take care of the Village’s Assets!)

18.   Investment Policy

The Village’s investment policy does not address interest rate risk, credit risk, concentration of credit risk, and custodial credit risk. We recommend that the Village update its investment policy to include, at a minimum, the foregoing risk considerations.

An expert on Illinois Municipal Finance, intimately familiar with Sauk Village’s financial history reviewed the Village’s audit and management letter and stated the following:   “I don't believe any of these are just normal issues.  In a well run environment, none of these issues should occur.  There should always be a system of "double-check" in order to eliminate any possibility of wrongdoing.  We have many of these safeguards in place to prevent fraud and provide transparency with taxpayer’s money.   What I don't get is the lack of attention being paid to account receivables.  What exactly does everyone working at Village Hall do?  Why is it that the Finance Director has no backup from existing staff? What does this so called Village Administrator or the Mayor do? (by the way the Finance Director  seems to have a lot of authority according to this report)?  This report is pathetic!”