Electric Board hears report from auditor

September’s meeting of the Russellville Electric Board was held Sept. 20. At that meeting, REB general manager Charles Canida requested the next meeting be moved forward a week to Oct. 25, and the board approved.

Before the Oct. 25 meeting, the board held a special called meeting at noon Oct. 4. REB executive assistant Sherry Smith explained the agenda included a 12-minute executive session and adjournment. Smith said no actions or votes were taken.

Canida was not present at the board’s Oct. 25 meeting. REB Chairman Nick Willis – formerly vice chairman, selected as chairman during the Sept. 20 meeting – presided.

The board approved the September 2022 bills and the minutes for the Sept. 20 and Oct. 4 meetings.


Willis introduced Chasity Sweatmon as the REB’s auditor. Sweatmon explained she’s a partner and CPA with Fricke, Sweatmon & Co. in Cullman.

She said she appreciated the opportunity to be at the meeting and to have performed the REB audit for this year.

“I’d like to talk about what our responsibilities are and what an audit is for us,” she added. “Our responsibility as an auditor is to make sure that the financial statements are fairly stated in all material respects.”

Crucially, the audit is meant to ensure REB has no material misstatements.

“If you’re looking at those, and there was something in those that would change your mind if it wasn’t adjusted, and it’s not reported accurately, we’re supposed to find those things,” explained Sweatmon. “So, that’s what we’re looking for. We’re going through, we’re verifying, but it doesn’t give you absolute assurance that those financials are accurate to the nth degree.

“It means you have reasonable assurance that the financial statements are fairly stated in all material respects,” she added, explaining that while the agency does consider the internal controls of the organizations they audit, they don’t issue an opinion on those.

Sweatmon said they pull a sample of cash disbursements, payroll disbursements and rate testings for revenue then do analytical testing and look at “all of the assets and liabilities and the subsidiary ledgers and the underlying documents to see that there’s information there to support the numbers and the information that is provided in the financial statements.”
She noted they “can’t look at everything” because it wouldn’t be cost-effective. “We’d be here all year,” she added. “But we do try to get a really good glimpse and look at the risky areas more and try to make sure that they are fairly stated.”


Sweatmon said she obtained permission in advance of the meeting to talk about a couple of questions that had been presented to her, including customer deposits.

“I know that’s a big issue for you right now,” said Sweatmon, who explained that the customer deposit policy is a policy that’s adopted by the Russellville Electric Board. “They get to decide what their policy’s going to be, but it has to fall within the parameters of TVA,” she continued.

She also explained in TVA’s rules and regulations and in their contract with the Russellville Electric Board, it’s stated the REB “cannot be discriminatory against any of their customers.”

“There’s two types of customers under TVA and under the board,” added Sweatmon, “and that’s residential and commercial. It doesn’t matter if you’re a church, a not-for-profit or a retail industry, those are all grouped under the commercial customers, and so that deposit is calculated the same for commercial customers across the board.”

She explained REB thus has no right to say they want to exempt churches, noting she’s had “a couple of calls from churches, and I tried to explain a little bit about that.”

She said since the REB contract with TVA says they can’t discriminate in how deposits are charged, her firm recommended “that they come up and be compliant and everybody’s treated the same.”

“If you’re on the end where you’re being asked to understand, that’s not fun, but at the same time, the ones who’ve already paid their deposits, they want you to be treated just the same as them,” she added. “So, our recommendation was that they make sure everybody’s treated the same so that they’re compliant with their contract with TVA.”


Sweatmon said she had also had a couple of questions about accounts that were closed during the year. She initially said she would not go into details due to being bound by confidentiality as an auditor, unless she has received prior approval to talk about it in detail.  

“But it is a public entity,” she added. “You can always ask. The one account that was asked of me, I did go back, and we did look at that account in detail as part of our audit. The account was closed, and the money was deposited to the general account. We did trace those funds between the accounts.” 


Sweatmon said her firm found the financial position of the board has improved over the past year.

“One of the ways that we look at it is the cash flow statement, and the cash flow for the entity increased $1.3 million last year,” she added, noting that represented “a major improvement over prior years.”

She said if looking at an income statement for the board, it should be noted that “depreciation’s over $800,000,” adding the number represents taking “the cost of all their plant and their capital assets, and it’s averaged into the cost of the entity over a number of years.”

She noted the REB has a new substation.

“There’s the equipment and plants all there, so that’s going to have to play into the income statement,” she remarked, “but overall, the board has improved as far as its financial condition.”


Sweatmon asked if there were any specific areas the board wanted her to talk about, and the board said if she wanted to go back and say more about the account she mentioned, to do so, after which she clarified with the board that the account in question was at Alabama Central Credit Union, adding it had represented “about $16,000,” noting the firm “did see where the account was closed.” 

“In discussions with the accounting staff and management when we were there, it was closed just to consolidate,” she added. “They wanted things at the same bank, and we did go trace where it was deposited in their general account, so it was out of one account and into another account owned by the entity,” Sweatmon remarked.

The board asked its attorney, Jeff Bowling, if he would like to make any comments, and he said he had no comments to make.


Two members of the public spoke following the auditor’s report.

“It has come to my attention that the letter that was written from the Russellville Electric Board concerning deposits made that were required by TVA was miswritten or lied about,” said Ricky Young, “because, technically, three people I talked to from TVA basically were asked the same question: ‘Does TVA require a deposit for electricity each time?’”

Young said, “That answer was no, no and no,” adding the TVA employees he referenced also stated that if the Russellville Electric Board requires a deposit for electricity connection each time, “they must be within the framework of the guidelines of TVA.”

He stated that TVA thus does not require a deposit.

“(The letter) was written by the Russellville Electric Board, and when you read the letter, it said basically there was a requirement by TVA,” he added, noting his understanding was that the agreement between TVA and the REB “was approved Sept. 19.”

Young said his question for the REB then was what the time and date of the meeting was prior to that where the guidelines were put together.

“Was that a part of a meeting hearing, and who all was involved in that process?” he asked. “The second question posed is basically going to deal with my company because I’ve had several people ask me different questions across the board and try to get this across.”

Young explained he had said he would use his company as an example.

“In ‘95, we made a deposit for $100 for electricity,” he added. “We came from 106 W. Limestone to where we are today. A $100 deposit was refunded to us 10 years later.”

Young said the company hadn’t missed a bill in the interim.

“We never had anything threatened to be cut off,” he added. “We never had anything that had to be reinstated. Now, it goes from $100 to $350, and I understand times change,” he noted.

“Why can’t you go back and say, ‘Hey, instead of charging a deposit, we just make it all even? We’ll just give it all back to everybody and just keep them running like it is,’” Young said.

“Now you’re in an inflationary period,” he said, “and you’re turning around and charging people at least two to two and a half times their power bill to cover this.”

Young said the requirement “hurts churches just as much because they’re the ones that are actually out here doing the benevolence work for the citizens in the area.” He added that his company sees the books for companies every day where “it’s literally hand and mouth between paying employees, paying power bills, cost of goods sold and turning around and making a profit.

“These are just some things you might want to kick around and look at,” added Young. “If it’s an issue with a substation that we owe money on or something like that, you know, bring it forth, put that out there. Be open with it. That’s the biggest request.”

He continued, stating, “You’re living in an area where it’s not easy. The state of Alabama’s a depressed area to begin with, and you want to add this to everybody’s bill. You know, nobody’s going to forget this. That’s the biggest thing. So, you know, you’ve got an opportunity as a board to sit around and kick it around and re-think the process. I don’t know if you can reach out to TVA and re-do the deal or not, but, you know, something’s got to give, and this ain’t it. Thank you for your time.”

The other member of the public who spoke during the meeting was Teresa Nelson.

“The local power company has the ability to create policies that best serve the needs of their consumers and communities,” Nelson said. “Are y’all really doing what serves the needs of the community? I don’t think so, by going back and doing this,” she added in reference to the aforementioned deposits.

Nelson referenced an example of her church moving locations.

“Whether the church paid a deposit or not, I don’t know,” she added. “I don’t have the records. We have paid over $70,000 in power bills since 2007, and we haven’t missed anything. Now, we’ve got a letter (asking) for $900. Well, we don’t know why.”

She said she’s the church secretary.

“I can tell you when we bought our other building, I went down to the power company to pay the deposit,” she added, noting she was told churches were not charged a deposit.

Nelson added someone from the Russellville Electric office told her there used to be no charge (deposit requirement) for churches.

“The letter from TVA says you have the right to make the policies however you want to make them,” said Nelson. “I think y’all really need to look at the community and what it’s doing to the people here because they don’t make $200,000 plus and have all expenses paid.”

“Some of the churches have been here for 70-plus that they’re doing this to now,” added Nelson. “There’s no way for no one sitting at this table or even in this room unless you’ve got it on a piece of paper somewhere to show if that church made a deposit back then, or if that deposit was ever refunded,” she added, stating that “even over the past couple of years, y’all have been refunding deposits. Now, you’re asking them to give (the deposits) back, more money than what it was originally.”

Willis thanked the commenters for their time, stating, “We’ve made notes on everything that you’ve asked about here, both of you, so we appreciate it.”

Nelson brought a letter dated Sept. 27 from REB accountant Tiffany Holt, addressed to Heritage Fellowship, the church where Nelson is secretary.

It states, in part:

“Per our regulator, Tennessee Valley Authority (TVA), we are required to obtain and maintain a standard deposit equal to twice the average monthly bill for the previous twelve months for all of our commercial/industrial customers.”

“Our auditors, Fricke, Sweatmon & Co., P.C., are conducting an audit of our customer deposit records, and it has been discovered that we do not have a deposit on file for your company.”

“Acceptable forms of deposit include cash for deposits less than $10,000, a letter of credit from a financial institution or a utility security bond for deposits greater than $10,000. If you have documentation showing that you do have an acceptable form of deposit with Russellville Electric Board and/or Russellville Utilities, please contact us immediately with this information so we can update our records; otherwise, we need you to obtain an acceptable deposit with us as soon as possible.”

The letter then lists the amount of the “required deposit amount calculated for your entity.”


The next meeting of the Russellville Electric Board is scheduled for Nov. 15 at 6 p.m. in the conference room of the Electric Board Warehouse on 1012 Jackson Avenue S. in downtown Russellville. The warehouse is located across the street and just past the Russellville Utilities main office on South Jackson Avenue, by Russellville Fire Station 1.

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