An audit of the city’s telecommunications services identified approximately $3,000 a year in savings for the city, according to City Administrator Jennifer Moody.
At the Jan. 14 meeting of the Tullahoma Board of Mayor and Aldermen, Moody publicly thanked Finance Director Sue Wilson and her staff for working her and the auditor on the audit, which will help the city save money each year.
According to Moody, a third-party company analyzed two months’ worth of telecommunications bills for the city, identifying where extraneous lines and features might be racking up expensive costs and double checking pricing guidelines to make sure the city was being charged correct amounts for telecommunications services.
The News was unable to confirm the name of the auditing company by press time.
“What they identified and recommended back to us amounts to about $3,000 a year in savings, just through either corrections on the bill or through better pricing on our services,” Moody said of the findings.
There was “no particular reason” for the audit, according to Moody, other than it was “just a good business practice.”
“The audit allowed us to look at all of the city’s existing phone lines, including mobile devices, and review their bills to validate that we still have a business need for all of those lines and/or add-on features,” she said.
The process involved the company calling each of the phone and fax lines the city owns and monitoring their activity. The company also looked at city cellular lines, Moody said.
“They took every single phone line we have and called it to see if it’s active,” she said, “and monitored the use.”
While the company did not find any savings as far as the number of phone or fax lines or calling features, Moody said, the company was able to identify a few billing discrepancies and extra costs tucked away in small amounts here and there.
One of the findings involved the billing formulas used by the city’s phone company, Moody said.
Because the city is tax-exempt, it does not have to pay sales tax on things like telecommunications services like the average customer.
However, some of the bills analyzed showed the city was being charged sales tax when it should not have been through those billing formulas.
“They [the auditors] were able to go back to those [telecoms] companies and get it broken out and find local and state and federal sales tax that we were being charged,” Moody said.
While the amount of sales tax per line per month was minimal, the number of phone and fax lines that the city utilizes means those charges add up.
“When you add it up over time, it’s a good savings,” Moody said.
The other finding from the audit was an extra expense on the city’s part in publishing its myriad phone numbers.
According to Moody, the city is required to publish the full list of its phone numbers at least once, perhaps in a phone book. Once those numbers have been published, the city then has the option of publishing the number in additional places.
According to Moody, the city was publishing its phone numbers in a few different places, meaning it was spending extra money on additional publications.
“That’s a cost that we didn’t even know that we had an option to incur or not,” Moody said, “but those additional publishing places we’ve been paying for, we can go back and review – do we want to continue paying for those, or is one telephone book enough? – So that’ll save us money.”
Moody said later that there is “no particular plan” for what to do with the funds saved as a result of the audit, but they would remain in the city’s general fund and could be available for other uses or could possibly put into the city’s reserves.
Additionally, Moody said if the city chose to cancel any particular services, that could be done “immediately,” though any money back-owed to the city would have to come differently.
“Refunds or rebates owed to us may come to us as credits on future bills or as a refund check, but I don’t have a definite date yet,” she said.
Moody said this wasn’t something she anticipated doing on an annual basis, but that the city could benefit from doing such audits “every few years” just as a check that the city is operating efficiently.
Erin McCullough may be reached at firstname.lastname@example.org.