Audit Objective
Did the Village of Churchville (Village) Board of Trustees (Board) provide adequate oversight of electric utility services billing and collections?
Audit Period
March 1, 2023 – October 30, 2025
Understanding the Audit Area
The Village provides municipal electric utility services to Village residential and commercial customers funded primarily though user fees. The Board should provide adequate oversight of electric utility services billing and collections to ensure financial stability, maintain operational transparency and protect residents and businesses from inaccurate billing or unfair practices. As electric utility services are critical for the health and welfare of residents, regular Board oversight acts as a check and balance to ensure accurate billing and revenue collection, compliance with regulations and helps prevent loss and misappropriation.
The Village has approximately 1,185 municipal electric customers with budgeted electric revenues of $2 million for the 2025-26 fiscal year.
Audit Summary
The Board did not provide adequate oversight of electric utility services billing and collections. For example, the Board did not request financial or electric utility services use, billing or collection reports or reconciliations to monitor operations. The Board also did not review and approve use and billing adjustments or develop and adopt electric utility services billing and collection policies to provide guidance to officials and employees completing billing and collection functions. As a result, officials and employees developed informal procedures that did not adequately segregate duties or include periodic reviews and reconciliations and significantly impacted the timely identification and correction of billing errors. For example, both the Clerk/Treasurer and electric utility services billing clerk (billing clerk) entered and modified billing rates and made use and billing adjustments without anyone reviewing or approving their work. These individuals made billing adjustments totaling $327,711 from March 1, 2023, through June 2025, which largely consisted of correcting the billing errors totaling $293,405 for demand customers.
In addition, we reviewed select billings associated with 14 of the 1,185 customer accounts and determined Village officials did not properly include sales tax totaling $5,665 on one customer’s bills from March 2023 through December 2024 and overcharged three commercial customers by a total of $86 because they used the winter rates in October 2023 and October 2024 instead of the approved summer rates.
While our review of electric utility services billing collections did not identify any instances of collections that were not deposited, the lack of accountability without separate cash drawers and user accounts could result in recording errors or misappropriations of cash without detection.
The report includes eight recommendations that, if implemented, will improve the Board’s oversight of electric billing and collections. Village officials generally agreed with our recommendations and their response is included in Appendix B.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s (OSC) authority as set forth in Article 3 of the New York State General Municipal Law (GML). Our methodology and standards are included in Appendix C.
The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of GML. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review in the Clerk/Treasurer’s office.