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Audit suggests dozens of BTU changes

Audit suggests dozens of BTU changes

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By MATTHEW WATKINS

matthew.watkins@theeagle.com

A soon-to-be completed outside audit of Bryan Texas Utilities will recommend nearly 30 policy changes and additional safeguards for the city-owned power company -- mostly related to financial oversight and "disconnects" with city government.

But the audit will not find any glaring issues with the security or structure of the utility, one of its lead authors said.

"We identified multiple internal control recommendations, but no gaps where a risk was not covered by a control," said Alyssa Martin, a partner in the accounting firm Weaver and Tidwell, which also conducts BTU's annual financial audits.

An overview of the audit was discussed during a Tuesday afternoon workshop session of the Bryan City Council. The report is still in draft form, meaning it isn't public information. City officials declined to provide a copy to The Eagle and said they didn't have details of the specifics surrounding the problems that were found.

But they did broadly discuss some of the recommendations that were to be made. They include placing more strict oversight over the company credit card, formalizing the policy that allows BTU General Manager Dan Wilkerson to spend discretionary funds and increasing cooperation with the city administration.

BTU is a part of the city government but operates under its own autonomous board. That board allows Wilkerson to spend up to $200,000 without approval, even though no written policy grants him that authority. The audit recommended adding such a policy.

It also said that Wilkerson should more closely guard the company credit card. Wilkerson said he keeps the card locked up, but that some of his trusted managers knew the number and used it to make purchases. The audit said that only Wilkerson should have access to it and be able to make purchases.

Wilkerson said he has changed the credit card number and will follow that suggestion.

The audit was ordered by the City Council in September after months of squabbling between BTU and former City Manager David Watkins.

Watkins said he needed to know the salaries of BTU's administrators and other financial details to compile a city-wide budget. Other de-partments had made difficult cuts to accommodate slowed growth in tax revenue and, he said at the time, he needed to make sure BTU was sharing in the sacrifice.

Watkins eventually resigned amid the scuffle. He was replaced by BTU executive Kean Register, who still holds the interim city manager position after 10 months.

Martin didn't discuss Watkins' concerns in her presentation. It's unclear whether they are addressed in the report. But she did suggest better communication and interaction between BTU and City Hall.

For instance, the city attorney's office is required to sign off on all BTU contracts, but auditors found one contract out of a sample of "12 or 13" that wasn't approved. Details of that contract are unclear. Wilkerson said he didn't know anything about it.

Martin said the problem arose because of a "disconnect" over what constitutes a contract. She recommended writing a formal policy to clear it up.

Auditors also found a "disconnect" between BTU and the city secretary's office about the storage of copies of deeds for BTU's land. City policy requires those deeds to be kept at City Hall, while Wilkerson said that deeds are kept at the county offices and that no copies need to be saved. Auditors sided with the city secretary's office.

Wilkerson said he thought the recommendations were "really good," though following them may mean more paperwork and formalities. They hadn't been implemented previously, he said, because of efforts to save money and increase efficiency.

He also noted that no alarming issues were found.

"People should be very comforted that they didn't find any problems or that they didn't find any losses," he said.

Councilmembers made little comment about the audit, other than to say that they learned from the process.

"I think it was very enlightening," said Councilman Mike Southerland. "When we started this, it wasn't such a friendly atmosphere, and I think it answers a lot of questions. You can be performing well, but there are always areas that can improve."

The audit reviewed employee compensation and made one recommendation, but Martin didn't discuss the details other than it was related to the monitoring of BTU's payroll provider.

In the time since last year's turmoil, more information has become public. BTU in December released the 2010 compensation of its 10 highest-paid employees, but declined to give the amounts for previous years. Wilkerson earned $245,588, the most out of any city employee.

And this month, a bill authored by Sen. Steve Ogden, R-Bryan, and sponsored by Rep. Fred Brown, R-Bryan, removed open records exemptions for public utilities passed through the Texas Legislature. Gov. Rick Perry signed the bill into law, and The Eagle has submitted a request for more details of BTU's past executive compensation.

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