CITY OF FRESNO – COLLECTIONS – UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX AND LICENSE DIVISION
REPORT ON INTERNAL CONTROL REVIEW
November 21, 2023
Prepared by:
Price Paige & Company
Certified Public Accountants
570 N. Magnolia Avenue, Suite 100
Clovis, CA 93611
www.ppcpas.com
(559) 299‐9540
November 21, 2023
To Ruth F. Quinto, CPA, Assistant City Manager
City of Fresno
2600 Fresno Street
Fresno, California 93721
RE: REPORT ON INTERNAL CONTROL – COLLECTIONS – UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX AND LICENSE DIVISION
Dear Ms. Quinto,
Attached is our report related to the review of internal controls over the City of Fresno Finance Department’s Collections in the Utility Billing and Collections Division & the Business Tax and License Division, including related recommendations. Should you have any questions, please feel free to contact us.
Very truly yours,
Fausto Hinojosa, CPA, CFE Osvaldo Gutierrez, CPA
Price Paige & Company Price Paige & Company
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX AND LICENSE DIVISION
REPORT ON INTERNAL CONTROL REVIEW
TABLE OF CONTENTS
Page
Independent Consultant’s Report .............................................................................................................................. 1
Mission Statement of the Finance Department ......................................................................................................... 3
Background ................................................................................................................................................................. 3
Consulting Objectives and Scope ................................................................................................................................ 3
Report Structure ........................................................................................................................................................ 4
Conclusion .................................................................................................................................................................. 4
Current Processes, Recommendations, and Operational Impact:
Section A: General Reporting and Operations .................................................................................................... 5
Section
B: Control Activities ................................................................................................................................ 9
Section C: Other Comments ............................................................................................................................... 13
Exhibits:
Exhibit A: COSO Internal Control – Integrated Framework Principles ............................................................... 17
1 INDEPENDENT CONSULTANT’S REPORT
November 21, 2023
To Ruth F. Quinto, CPA, Assistant City Manager
City of Fresno
2600 Fresno Street
Fresno, California 93721
RE: Internal Control Review over the City of Fresno Finance Department
Dear Ms. Quinto,
We have provided the following services to the City of Fresno (the City) as it relates to the collections processes in
the Utility Billing and Collections Division & Business Tax and License Division:
1) Performed an evaluation of internal controls, including the effectiveness of the controls, the reliability of financial data, and the safeguarding of assets.
2) Prepared written recommendations for areas of improvement identified as a result of the internal control review.
Our services were conducted using the following methods of information gathering and reporting: examination and inspection of books and records, interviews and inquiries with staff at various levels and different departments, and direct observation of the subject matter. Information received by City staff was reviewed using professional judgment and was subjected to professional skepticism.
The results of our services are
detailed in the following pages of this report. Due to the nature of the services provided, there may be additional recommendations and improvements to be made; however, we believe the proposed recommendations will significantly improve the City’s existing processes, policies, and procedures. This will result in more effective and efficient processes for City staff and management alike.
2 It is acknowledged that although there were various recommendations provided as a result of our review, the opportunity for improvement does not detract from the hard work and dedication of City staff. Many of the recommendations stem from training opportunities, availability of resources and monitoring of key activities, all of which are addressed in this report.
This report was prepared specifically for use by the City Manager’s Office, Department of Finance, City Council, and any other City staff (as directed by the City Manager’s Office) that would directly benefit from reviewing this information. It is not intended to be, and should
not be, used by anyone other than these specified parties.
Very truly yours,
Fausto Hinojosa, CPA, CFE
Price Paige & Company
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
3 MISSION STATEMENT OF THE FINANCE DEPARTMENT
To guide fiscal policy and advocate for sound business processes.
BACKGROUND
Price Paige & Company was engaged to perform an evaluation over the City of Fresno’s collections processes in the Utility Billing and Collections (UBC) & Business Tax and License (BTL) Divisions (collectively, the Divisions), with a key focus on effectiveness of internal controls, reliability of financial data, and safeguarding of assets. As part of this arrangement, we performed various interviews with key staff, along with members of management and those in departments supporting or working with the UBC and BTL functions.
Based on information gathered, interviews conducted, and processes observed, we identified various areas for improvements and opportunities to implement best practices that we believe will equip City staff and management to more effectively and efficiently meet its desired objectives as it relates to the aforementioned processes.
CONSULTING OBJECTIVES AND SCOPE
Our first objective was to gain an understanding of the City’s processes and procedures for the aforementioned subject matter. Key to this understanding included the following:
1) The City’s structure, including reporting hierarchies and other defined reporting rankings/groupings. This includes an evaluation of duties, with a focus on adequate segregation of duties.
2) The City’s process for identifying and assessing potential risks within the aforementioned subject matter, whether financial or operational, including those steps taken to reduce identified risks.
3) The City’s control activities, specifically related to the City’s processing of activity under the purview of the Divisions.
4) The City’s methods and tools and defined lines of communication between departments, with a focus on interactions with the Finance Department.
5) The City’s methods and processes used to monitor control systems specific to the aforementioned subject matter to ensure errors are identified and corrected timely.
Our consideration of the City’s internal control structure and related recommendations are based on the guidelines of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which are widely used guidelines for organizations to consider for internal controls, risk management, and other fraud deterrence activities (see Exhibit A for the Integrated Principles of Internal Control as defined by COSO).
The second objective was to prepare a summary of written recommendations for improvement based on the understanding obtained in the first objective. Those recommendations follow in the subsequent pages of this report.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
4 REPORT STRUCTURE
On the following pages, we created a structure by subject area which details the following components:
Current Process
o This section details how the process is being conducted with the current staff and resources available.
Additional information is added as needed to provide context to users of this report.
Recommendations
o Each subject area item will have one or more recommendations which are the result of our examination and inspection of books and records, interviews and inquiries with staff at all levels and different departments, and direct observation of the subject area.
Operational Impact
o This section details the benefits and potential positive outcomes of implementing the recommendations.
There may be exhibits at the end of the report, which are either examples of the subject matter or are worksheets that we created to support our conclusions. They are referenced as detailed in the “Recommendations” section noted above.
CONCLUSION
There are many recommendations as a result of this review. Although some of them may not seem attainable due to cost, time, or other available resources, implementing them will significantly improve the operations of the Finance Department. That is why the recommendations need to be evaluated by the key staff involved in these functions, such that a plan can be made for successful and timely execution of the recommendations. Note that the cost (which could include payroll, non‐payroll, and other indirect charges) of internal controls should not exceed anticipated benefits. We took this into consideration when providing the recommendations, however management should also consider this when deciding on the implementation of any recommendation.
It is important not to attempt to implement all recommendations at once. It is more critical to make an organized plan with a clear path and goal for successful implementation of all the recommendations in stages.
Lastly, there should be a system and level of accountability for the structure and timing of how and when these recommendations will be implemented. This report is not useful unless there is internal follow‐up for the implementation of each stage of the process.
5 SECTION A:
GENERAL REPORTING AND OPERATIONS
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
6 ITEM 1 – POLICIES AND PROCEDURES
Current Process:
The Finance Department has various policies and procedures related to collections for the Divisions. Currently, the City’s Finance Department does not frequently rely on or provide training on written standards on the adopted policies and procedures for the various functions related to collections. Additionally, while policy and procedure documentation does exist, it is not comprehensive, and there is opportunity for refinement.
Recommendation(s):
We recommend the City adopt a General Policy for collections. Key areas for inclusion and consideration are listed below:
Receipting & Cash Handling – Policy should encompass areas of cash receipts, e‐receipts, and cash handling, including internal controls and best practices that would be tailored to the needs of the City based on the current structure and resources available to the Divisions.
Roles & Responsibilities – Documenting these will allow for continuity of service and procedure should there be turnover of key staff.
Write‐offs – Policy should include formal guidelines for how and when accounts should be written off. This should include the thresholds for what dollar amounts require supervisory approval, the length of time that the City will try to collect before sending to a Collection Agency, the timing of when and what reports will be reviewed internally by management, and what to do with unprocessed accounts receivables and the handling of future receivables. The policy should be reviewed periodically to ensure compliance with all applicable laws and regulations.
A cost‐benefit analysis needs to be performed over what type of evidence should be gathered when determining whether an account should be written off and how this evidence should be retained and noted on the account within Naviline or other digitized space. UBC staff currently document write offs via a “comment” and status change on the Customer account in Naviline. If the process remains status quo, management and/or internal audit should build in reoccurring checks to ensure the validity of the write‐offs. Customer Account Adjustments – Establishing clear protocol over who can adjust a customer account, who reviews, and what documentation/evidence is necessary for this. Other key areas to consider – Process and protocol for creating/adjusting/terminating customer accounts, training, reporting, reconciling, monitoring, budgetary review, data security, and compliance review.
Operational Impact:
Incorporating these key points allows the City to enhance accountability, reduce risks, and promote the efficient and effective use of internal controls. The City would remain proactive – with clear policies and procedures in place to mitigate the challenges of staff turnover and the loss of institutional knowledge. This also allows management to have clear guidelines to follow and enforce as deemed necessary. Lastly, staff will have a resource that is comprehensive, easy to understand, and easily accessible.
ITEM 2 – ENHANCEMENT OF STAFF TRAINING FOR UBC
Current Process:
UBC is currently organized by five sections: Administration, Customer Service, Collections/Special Billings, Special Billing & Payments, and Training. Much of the training after the initial on‐boarding is done by each individual group, and can involve weekly training sessions, one‐on‐one check‐ins, and various on‐the‐job training opportunities. In addition, UBC management/supervisors meet weekly to go over various topics and concerns. Cross training is provided to certain roles so they can assist with other duties if needed.
The Division’s training supervisor focuses on training new and existing staff on customer service best practices and servicing the solid waste function. There are opportunities for UBC to improve and enhance the current training structure currently in place.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
7 ITEM 2 – ENHANCEMENT OF STAFF TRAINING FOR UBC (Continued) Recommendation(s):
UBC staff at all levels should have continuous training that is timely, effective and role specific. UBC management should decide on the type of training needed based on the role, focus area, section, and on the frequency in which training occurs. A training plan should be documented and include specialized technical training based on an employees assigned section, as well as material to develop leadership skills and management techniques. Key trainers within each group should be identified so the training can be as effective and uniform as possible.
Additional cross training amongst different roles and responsibilities should be given on an on‐going basis to ensure knowledge and skills sets are not key person dependent. The team should create opportunities for staff to provide input on training materials, content, or other desired topics which may currently be overlooked. This will help ensure staff continually receive relevant training and will make allowance for modifications based on the needs of staff.
To cut down on training time and maximize the effectiveness of overall training, web‐based instructional videos providing step‐by‐step process guides can help reduce time spent conducting on‐boarding sessions for every new employee or group of employees. This is especially important given the volume of new hires and staff transitions within the department. Creating instructional videos and other training mediums will allow trainers to focus their time refining current processes and strengthening controls.
Operational Impact:
The revamping of the UBC training program and process would require time and resources, but the overall intent is that, once it is up and running, the City would ultimately save costs as training becomes more efficient and effective. This allows trainees to fulfill their job responsibilities with fewer errors over time. Continuous training will strengthen the department’s “control environment”, which is the set of standards, processes, and structures that provide the basis for carrying out internal control. As a byproduct, the other principles noted within the COSO framework will also be improved (see Exhibit A).
ITEM 3 – CENTRAL SQUARE (NAVILINE) SOFTWARE
Current Process:
There is only one staff member in UBC that has an intricate understanding of Naviline and how to troubleshoot the system. There is a counterpart in the Information Services Department (ISD) that can assist with troubleshooting if the system goes down or does not work as expected; however, this individual is not a subject expert on how to utilize and maximize the system from a business operations standpoint. Although ISD is able to assist with troubleshooting system issues, there have been instances where Naviline’s support team has been called to assist. In addition, there have been some instances in the past where Naviline’s support team was unable to provide effective service while working with ISD.
Recommendation(s):
We recommend that UBC management analyze and assess the risk of what would happen should key staff leave their position(s). To mitigate these risks, management should engage in robust succession planning, ensure that there are current, up‐to‐date instructions to fulfill this role and provide cross training on an ongoing basis across multiple roles to ensure that several staff members within the department, including management, have a strong understanding of Naviline and how to troubleshoot various issues. In addition, the UBC staff responsible for overseeing Naviline should schedule periodic meetings with ISD to discuss any ongoing issues or suggestions to ensure maximum performance.
Operational Impact:
Having individuals who are cross‐trained and knowledgeable to trouble shooting the system, running unique system reports, and other critical functions would be advantageous to UBC. There is enormous exposure to risk should this person no longer work at the City as a result of being key person dependent.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
8 ITEM 4 – IDENTIFYING CUSTOMERS WHO ARE PAST DUE ON BILLINGS Current Process:
The UBC Collections/Special Billings group has various methods and pathways to look up customer information in Naviline that allow them to review and investigate past due accounts. However, there currently is no intuitive general “lookup” screen that would otherwise allow the process to be more fluid. This makes it challenging to identify customers who are requesting new service and who may also be past‐due on other accounts (dependent if they were the primary user or a resident of the same address with the past due account).
Recommendation(s):
The City can research and request Central Square to add a functional “lookup” screen to make it easier to identify customers for investigative purposes. Having a more efficient way to connect current and past primary, secondary, and additional customers will allow the City to identify customers who owe the City money and collect accordingly more effectively.
Operational Impact:
Having the ability to identify these customers will allow the UBC Collections/Special Billings group to increase their efficiency by spending less time doing research (especially when it comes to the use of Naviline). As a result, new or existing customers would be prevented from adding on new service if they were indeed identified as owing money to the City. The City would then work with those individuals to put them on a payment plan or take other action in order to make the best decision for all parties at the approval of the City Controller/Assistant Controller. The overall goal is to reduce internal staff time, while increasing the ability for the City to collect past due amounts.
9 SECTION B:
CONTROL ACTIVITIES
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
10 ITEM 1 – INTERNAL CONTROL MONITORING
Current Process:
The Collections Division has various monitoring processes in place that assist in the continual evaluation of internal controls over collections. As part of our observations, interviews with various staff, and inspection of related documentation, we have various recommendations below that will strengthen and enhance current procedures:
Recommendation(s):
The Collections Division should implement specific monitoring controls that are performed, ideally by appropriate levels of management at regular intervals. Development of Key Performance Indicators and reports (such as summary by billing/service type, aging of accounts by billing/service type, number and dollar value of accounts sent to collections, and revenue collections by month/quarter) should be provided to management timely so that actions can be taken to optimize performance. These reports will also allow management to identify trends and patterns and recognize any anomalies that could be the result of fraudulent activity.
Formal written procedures should be created for the current process of monitoring account adjustments, write offs, etc.
Although there are appropriate procedures in place for UBC and BTL, having documentation will allow for clarity and improvements for future use. The Collections Division should consider monitoring adjustments by account number (regardless of dollar amount) and look for trends and patterns that may indicate fraudulent activity. Management should consider reviewing the accounts of every UBC and BTL employee on a periodic basis (possibly every quarter) as they would be in the best position to make such changes go unnoticed.
Management should hold “roundtable” discussions with various staff members in different roles and levels of the division to gain insight into how to continue meeting the needs of all staff members of the Division and identifying areas that may need targeted training or support.
Operational Impact:
There are many tangible and intangible benefits to implementing the items above:
Control Environment will be strengthened – includes maintaining a baseline of integrity, ethics, and safeguarding of both assets and time.
Receiving periodic information allows a continuous level of monitoring to take place, and if needed, timely action on certain decisions. Allows the City to stay as proactive as possible to make timely corrections and decisions.
ITEM 2 – BUSINESS TAX & LICENSE – VARIOUS ITEMS
Current Process:
This Division performs many detailed functions to gather revenue related to business taxes, licenses, and permits. Various systems and processes are in place to fulfill these functions. Below are processes identified and observed that have related recommendations:
The previous business day’s cash receipts are reconciled using transaction reports from the BLWeb system, the individual payments processors’ hard copy documentation, and the Heartland credit card processor’s transaction reports. When the reconciliation is complete, the reconciled payment data from the previous business is exported via a “text” file pulled from the BLWeb to the Tyler Munis accounting system through a CFTI interface. During the tax seasons of April, July, and October, there are three to five employees opening mail every day, with others assisting as their schedules allow. The time of our walkthrough fell outside of the tax season and we observed mail being opened by only one employee.
The cash receipts records, Heartland credit card and e‐check transaction reports, and bank deposit logs are scanned and saved to a shared network drive. A copy of the imported .txt file is also saved. These records are accessible to all BTL staff and the City is looking into saving a backup of this folder daily moving forward to provide safeguards to prevent manipulation or deletion of the data.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
11 ITEM 2 – BUSINESS TAX & LICENSE – VARIOUS ITEMS (Continued) Recommendation(s):
There are various recommendations noted here in relation to the items noted in the previous section:
Reiterate that the BTL supervisor should continue to review, question, and investigate variances that result in deposits not fully being reconciled as the text data used to reconcile these records can be manipulated. Note that the text file is not uploaded until the bank deposit reconciliation is complete, however reconciling items need to continue to be reviewed by the employees performing this function. Consider having two employees involved in the mail‐opening process and/or build in a control that would mitigate the potential for manipulation or misuse of payments received by check/cash. Information on the shared drive can be viewed and potentially manipulated by multiple staff within the department. Other processes need to be put in place to maintain security over who has access to these items/documentation. Information on the shared drive should be reviewed periodically. Access to certain folders in the shared drive should be reviewed and only certain roles should have access to manipulate folders containing information related to receipt and reconciliation records. There is a standing rule that prohibits staff from working on business accounts in BLWeb if they are related somehow to the business (family, friend, etc.). To prevent this, the BTL should evaluate adding additional controls to ensure that changes to business accounts are appropriate. However, this can be challenging, as the City will only know of these types of relationships if they are disclosed to management.
Operational Impact:
Incorporating additional checks and monitoring of these key areas will improve accuracy and continue to strengthen existing controls and new processes as they are implemented as needed.
ITEM 3 – CASH HANDLING AND COLLECTIONS
Current Process:
The City has various methods for receiving payment across the Collections Division, including paying online via various methods, paying by phone, or paying in person at City Hall via the customer service window or using the drop box (UBC customers only).
Through observation, inquiry, and inspection, we have formulated various areas to improve and enhance the existing controls in place over cash handling.
Recommendation(s):
The following recommendations have been grouped by topic for ease of review:
Dual Custody
Always ensure dual custody of cash, such as walking the cash drawer to the safe and back. Two employees physically go to drop box to pick up the deposit (dual custody). This allows less risk for misappropriation of cash at that physical point. It is understood that there are cameras in place, however, having a secondary person will greatly increase the security and completeness of the deposit. Continue to ensure pickups are done daily at a specific time because having scheduled pickups ensures predictability.
Consider updating the actual drop box so that it can be transported in a secure container back to Collections as opposed to the employee emptying the container and then walking back to UBC.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
12 ITEM 2 – BUSINESS TAX & LICENSE – VARIOUS ITEMS (Continued) Recommendation(s): (Continued)
Counting of cash
Ensure there are always two employees performing the counting of all deposits and cash drawers. This would ideally be done by staff members and a supervisor can perform appropriate monitoring of the process. Verification of this process from receipt to the bank deposit (via review of the log sheet to what is in the cashiering deposit in the system) would ideally be performed by a supervisor. Note that the supervisor would not re‐perform the cash count, but would serve as a reviewer of the process.
Documentation
A summary log sheet is ideal for the full process to ensure the appropriate checks and balances are in place and to verify information related to the date, amounts of the day’s deposit to the bank, the reconciliation backup, and any other useful information that would strengthen the deposit process.
Rotation of Staff
We recommend periodically rotating staff for the processes noted here when it comes to the direct handling of cash. This allows for reduced opportunity of collusion and, as a benefit, cross‐trains others to serve as backups.
Monthly analysis and general review
Consider utilizing someone not associated with the processes noted here, to perform a monthly analysis of deposits by day to flag any anomalies and investigate as deemed necessary. This analysis should be performed by someone knowledgeable of the overall deposit process, and not able to be influenced by those involved in the actual deposit process. For example, if it is known that there is around $7,000 of expected cash receipts on the 10th of each month, but the actual deposit for that day was only $3,000, this individual would investigate and determine whether the internal control process was circumvented and/or if there is a reasonable explanation for why this pattern is occurring.
A formal policy defining the acceptable error rate between reconciling actual cash and the system is needed and this policy should be reviewed and updated by UBC and BTL periodically and approved by the City Controller/Assistant Controller. Note that errors are expected when someone is new and still being trained, but after a certain point, those errors should be reduced to a minimum. If errors still exist, appropriate disciplinary action should be taken and the employee should be put on a corrective training plan. Consider the risk/benefit of who has access to the safe and lockbox. Management should implement a system of review and accountability to minimize potential for misappropriation if various employees need access to it for operational purposes. This could include the Finance department or internal audit providing periodic oversight over the cash reconciliation process.
Operational Impact:
The ultimate goal for all of this is to ensure appropriate segregation of duties over key areas. Internal controls can by nature be “preventative” or “detective”. For processes where segregation (normally a preventative control) is not feasible, there should be a review and/or reconciliation on a timely basis to mitigate the risk of fraud, error, or noncompliance (detective control).
There are many benefits to keeping the processes over cash handling tight, secure, and monitored, such as: increased security and safeguarding over cash, better accuracy of cashiering and performing necessary reconciliations throughout the process, and ensuring appropriate segregation of duties, which reduces the potential for misappropriation due to fraud.
13 SECTION C:
OTHER COMMENTS
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
14 ITEM 1 – ONLINE APPLICATIONS (UBC)
Current Process:
Customers can setup service online via the UBC website. Certain information must be provided for the application to be processed; however, some of the questions that a Customer Service Representative would normally ask a customer during the account setup process are currently not in the online application.
Recommendation(s):
The online application should mirror exactly what Customer Service Representatives would normally ask a customer in‐ person or over the phone. This will alleviate the need to perform additional follow‐up with the customer, which could lead to frustration, and reduce the amount of time needed to process a new setup request that will save resources.
Operational Impact:
Having any type of discrepancy between the online and verbal application process can lead to a potential increase in errors, inefficiencies, and internal back‐and‐forth questions. Reducing these items will allow UBC staff to have increased time to perform additional responsibilities to help the department.
ITEM 2 – PROMOTION OF
ELECTRONIC PAYMENTS FOR UBC
Current Process:
The City uses various methods for customers to pay their bills, including paying in person, by phone, online, eCheck/ACH, Text‐to‐Pay, or using “Paygo”.
Recommendation(s):
Consider performing a cost/benefit analysis for accepting e‐payments or Paygo and take into consideration the costs incurred in order to promote and/or incentivize the use of e‐payments or Paygo more direct and clearly to customers.
Operational Impact:
This can reduce the potential opportunity for fraud or misappropriation to occur since there would be less physical cash handling. This could also reduce costs for the City and free up staff resources.
ITEM 3 – AUTOMATIC METER READING (AMR) ANALYSIS
Current Process:
The City’s UBC division works in conjunction with the City’s Department of Public Utilities (DPU) to provide general service and maintenance for the utilities offered. Throughout the City, there are various AMR Transmitters that transmit data electronically to UBC so that the division can collect the water usage for each customer/location.
When a meter malfunctions or the transmission is blocked, the UBC department does one or more of the following depending on the history of that account:
1. Estimates the usage
2. Sends staff (utility service representative) to do a physical meter reading
3. Requests for the meter to be repaired or replaced by DPU Ultimately the customer will have a revised bill once the physical read is done and/or the meter begins working correctly.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
15 ITEM 3 – AUTOMATIC METER READING (AMR) ANALYSIS (Continued) Recommendation(s):
The City should consider performing a cost/benefit analysis over the process of addressing the faulty meter reads. The following items should be considered (if not done so already):
Consider phasing in the rollout of installing groups of transmitters City‐wide. The City did a rollout of transmitters ten‐plus years ago that are starting to currently fail in a relatively short time frame. This will prevent this type of issue from recurring in the future if transmitters are installed and replaced through a phased approach instead of all at once.
Consider the cost of replacing a transmitter versus spending time and labor to do physical meter reading and/or repairs to it. This would include the time, labor, fuel, and depreciation costs covering staff in both the UBC and DPU, including the time spent assisting the Customer.
Operational Impact:
The City would ultimately have a more reliable system in place that puts less time and resources into manual meter reads and ensuring that transmitters are not all failing within the same time period. This will reduce the risk of error due to fewer reconciliations being made, less time spent dealing with internal departments and external users, less chance of billing errors being made, and less opportunity for potential problems to fly under the radar.
Once the true cost/benefit analysis is performed, management will be able to decide what path to take to ultimately save time and resources over a period longer than one year.
ITEM 4 – CALL TRACKING REVIEW FOR CUSTOMER SERVICE CLERKS Current Process:
The City currently utilizes a service from Cisco called Finesse. This service provides data related to the tracking of all inbound/outbound calls along with average talk times and hold times. The Clerks perform their normal customer service duties and code their time to the appropriate category for tracking and review.
Every day, the system will automatically send an email to key supervisors and leaders that oversee these staff with the aforementioned data. At that time, any immediate action may be taken for underperformers or anomalies noted.
Recommendation(s):
We recommend UBC and BTL look into the following items:
Investigate if the software can generate the data in an excel format and consider reviewing different time intervals versus doing it only daily (by week/month/quarter could be beneficial). If that is not possible, consider making it the responsibility of one person to convert that data into excel for ease of use (which may vary dependent on the needs of UBC or BTL). In either situation, it would be ideal if this data is captured in a master excel workbook that can summarize the data and show a trend analysis over time. This tool would be used to review performance and identify any key areas to improve by person or group. Develop KPIs and metrics in the policy so the Clerks have a general baseline for what the expectations are for all inbound/outbound calls.
o Depending on the type of call, consider the use of these metrics: how long it should take, how long someone should be on hold, and how long they should remain on standby until their next call. o It is important to create realistic expectations as well as accounting for administrative time (emails, breaks, etc.), but generally there should be reasonable and clear metrics.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
16 ITEM 4 – CALL TRACKING REVIEW FOR CUSTOMER SERVICE CLERKS (Continued) Operational Impact:
There are various benefits to implementing some or all of these recommendations. These include increasing usability and utility of the data so that management can make more meaningful decisions. Also better efficiencies are gained when reviewing the data in a format that can be sorted, analyzed, and manipulated (for example ‐ use of excel versus manually reading a chart via email). This will also increase the speed of the review to help maximize the use of technology to better review trends and help with appropriate performance reviews.
CITY OF FRESNO – COLLECTIONS
UTILITY BILLING AND COLLECTIONS DIVISION & BUSINESS TAX & LICENSE DIVISION REPORT ON INTERNAL CONTROL REVIEW
17 EXHIBIT A