For many school districts, especially larger districts, reviewing the utility invoices can be a cumbersome process as schools have multiple accounts. We have noted that recently late fees have been added and are cropping up across the Island. Many districts have asked the utility company to have the late fees removed – some are successful, and some are not. The fees can be quite a lot of money, especially if this is happening on multiple invoices for multiple months. We have some recommendations.
1.) Assess the due date.
If that date does not work with your payment cycle, reach out and have the utility company set you up on a different due date.
2.) Pay the invoices as soon as you as can.
Per the NYS OSC, “The governing board of a local government or school district generally may, by resolution, authorize payment in advance for public utility services, postage, freight and express charges. However, these claims should be audited as soon as possible after payment and included on the next abstract as prepaid amounts. Public utility services generally include electric, gas, water, sewer and telephone services.” The resolution can be included in your purchasing policy or added as part of the annual reorg meeting.
In addition, we recommend that districts have a utility billing audit performed. This involves hiring a company that will have their experts examine the utility bills specifically looking for billing errors, overcharges, and identify opportunities for cost reduction. These companies are versed in the complexities of utility tariffs, regulations, billing practices, stuck meters, estimated reading errors, etc. They will scrutinize various utility bills such as electric, natural gas, water, and sewer to assess accuracy in billing. We have heard where school districts have used this service and received money back as hidden errors or incorrect rates were noted.
These companies will do the heavy lifting and know how to file the paperwork. They can go back several years, and the best part is most do not charge a fee but instead collect a percentage of any savings they obtain.
There are also companies who can audit your telecom invoices looking for similar items such as billing errors, incorrect taxes, misapplication of tariffs, and incorrect rate charges.
Lastly, any errors noted in the billing are then corrected going forward. This is win-win situation. Don’t delay and overpay!
Shari Diamond, CIA
Partner
Shari has been with Cerini & Associates, LLP since 2008 where she works primarily with the firm’s school district clients providing internal audit and claims audit services. She has over twenty years’ experience performing internal audits, risk assessments, and compliance reviews, as well as recommending processes to strengthen the internal controls environment while increasing efficiencies. Her prior experience at PWC and Northrop Grumman included performing Information Technology audits.