Audit Division
Audit Summary

Southern Nevada Water Authority
LA00-01

RESULTS IN BRIEF

The information we reviewed was sufficiently valid and reliable for purposes of making decisions and assessing accountability. Although much of the information we reviewed was based on estimates and forecasts, we found no evidence to indicate SNWA used illogical, unreasonable or unsound assumptions and methodologies. Therefore, the information was suitable for purposes of making decisions. Furthermore, the information was substantially complete and accurate to allow for adequately assessing accountability.

Although we found no significant limitations in the information reviewed, we noted several areas where internal control procedures should be improved. For instance, SNWA has not established comprehensive written procedures for compiling and preparing some of its budget and water management information. As a result, we noted instances where information contained discrepancies or where SNWA deviated from established policies. We do not consider these instances to be significant in relation to SNWA's total operations. However, improved control procedures will provide reasonable assurance that errors or omissions that could be significant to SNWA's operations will not occur in the future.
 

PRINCIPAL FINDINGS

• SNWA is the entity responsible for regional water resource planning and conservation issues. These responsibilities were assumed by SNWA in 1991 as the result of a cooperative agreement among water and wastewater agencies in southern Nevada. In addition, SNWA operates and maintains the Southern Nevada Water System. SNWA is faced with the considerable challenge of meeting current and future water needs of a rapidly growing southern Nevada. To help meet this challenge, SNWA and its stakeholders must have complete, accurate, and logically correct information. Such information is necessary for planning purposes and is fundamental for making sound decisions. (page 5)

• Although we found no significant limitations in the budgetary information reviewed, we noted several areas where internal control procedures should be improved. For instance, we noted some differences among related budgetary information and supporting schedules. In addition, we noted departures from established SNWA budget presentation and reporting policies. Although these instances were not of sufficient magnitude to affect validity and reliability of budgetary information, they indicate a need to improve internal controls. (page 17)

• SNWA routinely monitors budgetary performance; however, several areas of the process should be improved. Although department managers are held accountable for budget variances, we noted instances where information used in this process was not completely accurate. Furthermore, we noted instances where required budgetary information was not presented to the Board for its review and approval. By improving the accuracy of its budgetary reports and providing required information, SNWA will enhance the budget monitoring process. (page 26)

• Ongoing improvements to the Southern Nevada Water System are currently projected to cost $2 billion by the year 2017. The detailed aspects of this capital improvements program are outlined in SNWA's Capital Improvements Plan (CIP). We noted instances where the information generated by the program's data reporting system was not always accurate. Although not considered significant in relation to the total program, we found minor errors, inconsistencies, and omissions that could easily be eliminated by strengthening existing controls. (page 30)

• SNWA produces two key documents for water resource planning purposes--the Water Budget and the Water Resource Plan. We found the information in these documents to be reasonable and reliable for purposes of planning future strategies and estimating short and long-range water resource needs and supplies. However, we found some weaknesses in the way the underlying data is compiled and presented. The lack of policies and procedures to ensure timely and accurate collection of data needed to prepare the information resulted in some delays and minor errors. In addition, SNWA has not established a formal review process to ensure mistakes are detected and corrected. Although the soundness of this information was not significantly affected, if left uncorrected these weaknesses could become problems in the future. (page 35)

Southern Nevada Water Authority's
Response to Audit Recommendations

Recommendation
Number                                                                                                                 Accepted                       Rejected
 

1 Establish comprehensive written procedures for
compiling and preparing budget information............                                               X
 

2 Prepare reconciliations to facilitate comparison,
analysis, and review of budgetary information.........                                              X
 

3 Consider preparing additional budget information
to enhance review of SNWA's financial operations..                                             X
 

4 Review SNWA Board budget policies and revise as
needed...................................................................                                                        X
 

5 Establish policies and procedures for timely collection
and accurate reporting of water management
information.............................................................                                                       X
 

6 Establish a formal review process to ensure policies
and procedures for preparing and reporting
information are followed, and errors are detected
and corrected.........................................................                                                       X
 

TOTALS                                                                                          6                                           0