In addition, the CRC did not always provide its electric power customers with accurate billings, resulting in overbilling and customer complaints. This situation developed, in part, because of a lack of documentation and written procedures for CRC's power billing process. Further, CRC does not independently verify the amounts of water diverted from the Colorado River by small water users.

• Has had difficulty providing its power customers with accurate billing statements, leading to overbilling and customer complaints. As of June 30, 1997, the CRC's power marketing fund held a surplus of approximately $250,000, with some of the surplus representing revenues that should not have been collected from power customers. This situation developed, in part, because of a lack of written procedures and documentation on CRC's power billing process. (page 9)

• Has not adequately segregated key duties, leading to management control weaknesses in the revenue deposit process, the payroll preparation process, the purchasing process, and the power billing process. (page 11)

 
• Has not properly accounted for certain financial transactions. Payments totaling $25,034 in fiscal year 1997 and $26,321 in fiscal year 1996 were credited to an expenditure account and then subsequently debited. This has resulted in revenues not being recognized and expenditures not reported at year end. (page 12)

• Has not independently verified the accuracy of reports by small water users on the amount of water they divert from the Colorado River on a monthly or annual basis. (page 13)

Recommendation
Number                                                                                     Accepted             Rejected

1     Document the power billing process and develop a
        manual to guide staff responsible for preparing
        power bills............................................................                 X

2     Develop methods or procedures to minimize the
        surplus balance in the power marketing fund........                   X

3     Seek Board of Examiners' approval for new types
        of collateral offered by industrial power
        customers............................................................                  X

4     Segregate key duties...............................................                X

5     Record third-party transactions in compliance with
        SAM 2730............................................................                X

6     Determine the feasibility of independently verifying
        the meter readings for small water users..............                    X

7     Cancel all credit cards that are still active and in the
        name of former CRC employees..........................                  X

8     Develop stronger controls over the issuance and
        monitoring of credit cards.....................................                  X

9     Obtain Board of Finance approval for any new bank
        accounts..............................................................                  X

10    Notify the State Treasurer and State Controller of
         the existence of bank accounts............................                  X

11    Ensure deposits are made timely............................                X

12    Restrictively endorse checks as soon as
         practicable...........................................................                X

13    Ensure that checks and other receipts are kept in
         an adequate safekeeping device..........................                  X

14    Prepare employee evaluations as required by
         statute.................................................................                 X

TOTALS                                                                                     14                               0