Water agency passes audit review

The Southern Nevada Water Authority's budget passed a performance audit, but reviewers warned about possible future problems and recommended six ways to fix inaccuracies, omissions and inconsistencies.

No major problems were found by Legislative Council Bureau auditors who spent 18 months poring over water plans, financial reports and forecasts, said Gary Crews, legislative auditor.

Crews released the audit's findings Thursday during a Joint Taxation Committee hearing in Carson City. The hearing was broadcast to Las Vegas by teleconference link.

"We saw a lot of areas with room for improvement," Crews said.

Lack of a formal policy for writing a budget and weak control procedures were the main concerns, Crews said.

In 2007 Southern Nevada faces long-term water supply issues that will be met by higher water prices, water restrictions and conservation. The auditors fear that in the long run, something could "slip through the cracks" if weaknesses are not corrected in the budget for the regional water agency, Crews said.

The Southern Nevada Water Authority, created in 1991 with seven entities as members, faced extraordinary growth. The authority's budget was $600,000 in 1992. That has increased to $150 million for 1999.

Some discrepancies in SNWA's budgeting process noted by auditors include:

Water Authority officials agreed with the audit and its recommendations in a written response. The weaknesses, SNWA General Manager Pat Mulroy wrote, "reflect some of our growing pains over the past several years."

The Water Authority paid $120,000 for the audit, as required by Assembly Bill 291 passed in 1997.

Assembly Taxation Committee Chairman David Goldwater, D-Las Vegas, said the audit shows that the public and the professionals can understand how the Water Authority is spending $2 billion in ratepayer and taxpayer dollars to supply the Las Vegas Valley with enough quality water.

Sen. Ann O'Connell, R-Las Vegas, praised the audit for its thoroughness. "I feel an awful lot better," she said. "I'm very happy with the information."

Senate Taxation Committee Chairman Michael McGinness, R-Fallon, said the audit shows the water agency is responsible. "It looks like the Southern Nevada Water Authority has been taking care of business," he said.

No SNWA administrators or staff spoke at the hourlong hearing.

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