An Audit Report on Bexar Metropolitan Water District Expenditures
October 2008
Report Number 09-010
Overall Conclusion
The Bexar Metropolitan Water District's (District) Board and its management did not establish adequate management and financial controls to safeguard the District's assets and ensure that the District's expenditures were reasonable and necessary. The District does not keep an official, Board-approved budget and overspent its fiscal year 2007 operating budget by $8.8 million without amending the budget.
Although the District's procurement policies comply with state law, the District did not consistently implement these policies in fiscal years 2007 and 2008. The District also did not adequately track and monitor its contracts, and it was unable to provide auditors with the total number and value of all current contracts. The District lacked adequate controls over its expenditures, and it made a number of unnecessary or questionable expenditures in fiscal years 2007 and 2008, including $2.4 million in legal service payments and settlement claims.
Although the District's external auditor identified significant control weaknesses in the District's procurement, inventory, and payroll functions since at least fiscal year 2006, the District did not develop a formal plan to address these weaknesses. The District's Board should establish an audit committee and an internal audit function. This should include hiring an internal auditor who would report directly to the audit committee and monitor the correction of weaknesses identified to ensure the financial integrity of the District.
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