An ancient computer billing system and a lack of proper procedures have hindered the New Orleans Sewerage & Water Board’s ability to collect from its customers in a timely fashion, creating a situation where nearly half of its accounts were overdue in recent years, according to a new report by the city Inspector General’s Office.
The report, released Wednesday morning, slams the agency for using 30-year-old software that can’t provide detailed overviews of its accounts, billing policies that are inconsistently followed or largely unknown to its staff, and collection efforts that the report says do not yield returns in the short term.
Among the report’s findings are that 47 percent of the $21.8 million the agency was owed at the end of 2013 had been outstanding for more than 90 days, that the agency did not assess late fees on about 23 percent of bills that were paid more than four days after the due date and that nearly $190,000 in deposits had not been properly returned to customers.
S&WB Executive Director Cedric Grant responded that over a longer timeframe, the utility largely gets what is due to it. By the end of 2015, for example, the agency had collected 98.62 percent of the $136.5 million it billed in 2012, Grant said. In addition, he said, the agency is working to put a new billing system in place that will give its employees more information about delinquent accounts.
Officials with the Inspector General’s Office said the agency’s statistics amount to comparing apples with oranges and that the outside auditors had been unable to confirm Grant’s figures.
“He’s provided us with no evidence of how that (percentage) is being calculated,” Deputy Inspector General for Audits Erica Smith said.
The report cites issues throughout the agency’s billing procedures, largely attributable to problems with its computer system.
That system is due to be replaced by September at a cost of $5 million, including the price of the software, training and other costs associated with the changeover, S&WB officials said.
A look at the status of all the agency’s accounts at the end of 2013 found that $10.3 million was 90 days or more overdue on bills of $50 or more, according to the report. But the agency’s computer system could not produce reports specifying which accounts had not paid their bills — information the staff would need to track down those customers without clicking through each of the accounts individually, the report says.
It’s also not clear that delinquent accounts were being handled according to the agency’s own stated policies, which were not widely known among employees, the report says. Some of those policies were developed in the 1980s and include acronyms that are so out of use that the Inspector General’s Office could not find staffers who know what they mean.
A close look at 96 accounts found 18 that were past due, including 14 that had been sent to a collections agency for bills that in some cases dated back to 2010. Of the $6,988 owed by those customers, only $739 had been collected, according to the report.
At least one account, a bill for use of water from a hydrant, had been delinquent since 2008 and had an outstanding balance of more than $18,000 in 2014.
The S&WB also is failing to send customers refunds of the deposits they make when they open an account, according to the report. About $189,000 in deposits dating back to 1972 had never been returned to customers, and nearly 3,400 did not receive certified letters letting them know they were due money from the agency, according to the report.
The report says the S&WB should partner with a bank to collect and deposit checks sent in by customers so that it doesn’t have to do that work in-house — a change the report says could save the agency $83,000 a year.
Last year, the Inspector’s General’s Office took aim at the other side of the S&WB’s ledger, blasting it for $3 million in unauthorized overtime.
Grant defended the agency’s efforts Tuesday, arguing that it has dramatically improved its collections in recent years and the results are in line with other water systems throughout the country.
“There are real consequences when bills go unpaid,” Grant said, referring to the threat of having water shut off. However, he noted the agency has policies that are “flexible” to prevent creating unnecessary hardships.
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