A Performance Audit of the Utah Telecommunication Open ...

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Manual, which describes how local agencies should organize andmanage their finances. These manuals identify the fiscal proceduresrequired of all local governments in Utah. They also describe somebest practices for overseeing local government finances.UTOPIA would be well served to consider the fiscal practicesdescribed in these manuals. They contain a number of practices thatcould facilitate the board’s ability to oversee and control UTOPIA’sfinances. For example, the Little Manual states: “Deposits anddisbursements should be reviewed by a governing board at leastquarterly. Board members should ask questions if something is unclearor looks unusual.”The members of UTOPIA’s board of directors should be familiarwith the financial practices described in the Little Manual and theUniform Accounting Manual. UTOPIA’s board is comprised of citymayors, council members, and administrators who should befollowing these procedures in their own jurisdictions. We recommendthat they rely on these same procedures and financial controls to carryout their fiduciary responsibilities for UTOPIA. Though thefollowing controls are commonly used by local governments, wefound no evidence they are being implemented by the UTOPIAboard.UTOPIA’s entire boardshould receivemonthly financials andoperational datacomparing targets toactual performance.The board should receive monthly or quarterly financialstatements comparing actual versus budgetedexpenditures.The board should require staff to seek approval forchanges to the budget if the agency is expected to exceedauthorized spending limits.The board and the public should receive operationaldata comparing actual performance against boardapprovedbenchmarks.The board should review and approve individualexpenditures over a certain dollar amount.These are practices commonly used by local government boards andshould be followed by UTOPIA’s board of directors as well.- 50 -A Performance Audit of the Utah Telecommunication Open Infrastructure Agency (August 2012)
UTOPIA’s Board of DirectorsCan Provide More Effective OversightUTOPIA’s board of directors should take steps to improve itsoversight and control of the organization. Although we have nodoubts concerning the board’s level of commitment to the success ofthe organization, we do question whether the current board structureprovides the most effective oversight possible. We also questionwhether the meetings of the executive committee are held incompliance with the Utah Open and Public Meetings Act.Considering the challenges it faces, and the need for strong oversight,we suggest the board consider increasing its reliance on thecommittees that have been formally created but are no longer meeting.UTOPIA’s board maybe more effective if itchanges boarddeliberation practicesand its committeestructure.The UTOPIA Board Has Delegated Many Responsibilitiesto the Executive CommitteeUTOPIA’s board of directors is comprised of one representativefrom each of UTOPIA’s 16 member cities. The board members aretypically a mayor, council member, or administrator in the cities theyrepresent. Only those representing the 11 pledging member cities mayvote on matters related to the construction and financing of thenetwork. Five members of the board also form an executivecommittee. The Utah Infrastructure Agency (UIA) has a similar boardof directors with an executive committee of its own.We observed several board meetings and found that the businessconducted during those meetings is generally quite brief. Typically,matters put before the full board receive little discussion beforedecisions are made. The majority of meetings we observed lasted nomore than 25 minutes. A few lasted longer because they went into aclosed session.Although the agency faces considerable financial and operationalchallenges, we were surprised by the lack of discussion of such mattersduring the board’s regular monthly meetings. The board minutes alsoindicate that the board has received little information concerning thechallenging problems faced by the agency. Apparently, the board ofdirectors has delegated much of its oversight responsibility to itsexecutive committee.We also observed several meetings of the board’s executivecommittee. We found that although the full board holds its meetingsOffice of the Utah Legislative Auditor General - 51 -
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REPORT TO THEUTAH LEGISLATURENumber
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DigestA Performance Audit ofUtah Te
Page 9: Table of ContentsDigest ...........
Page 12 and 13: will be funded through UIA financin
Page 14 and 15: the organization’s general manage
Page 16 and 17: UTOPIA Did Not Reach Its Goal to Bu
Page 18 and 19: UTOPIA did notachieve its goal toco
Page 20 and 21: Figure 2.4 Summary of the Agencies
Page 22 and 23: efinancing, the maximum amount pled
Page 24 and 25: One consequence of the slow growth
Page 26 and 27: factors in deciding where to build.
Page 28 and 29: completed in a timely fashion and h
Page 30 and 31: Figure 2.10 Seven Years of Operatin
Page 32 and 33: Figure 2.11 By 2010, UTOPIA Had Spe
Page 34 and 35: plan did not anticipate the difficu
Page 36 and 37: end of 2010, 3,698 former subscribe
Page 38 and 39: Uncollected revenuesfrom retail pro
Page 40 and 41: agreed to provide UTOPIA with a $66
Page 42 and 43: As problems mounted, the board deci
Page 44 and 45: The data in Figure 3.2 shows that,
Page 46 and 47: As stated previously, two possible
Page 48 and 49: This Page Left Blank Intentionally-
Page 50 and 51: UTOPIA Has a New Development PlanAi
Page 52 and 53: Centerville and in its legacy areas
Page 54 and 55: UTOPIA shouldidentify specific area
Page 56 and 57: e applied. Not surprisingly, we fou
Page 58 and 59: act in its entirety. Also, the agen
Page 62 and 63: in public, the executive committee
Page 64 and 65: separate public body that must comp
Page 66 and 67: public entities that are subject to
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Page 78 and 79: Five‐Year Plan Summary 2Agency (U
Page 80 and 81: Five‐Year Plan Summary 4cities’
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