The Pine Cove Water District board approved a resolution agreeing to the financial assistance — loan and grant — from the federal Rural Utilities Service.

Last month, the U.S. Department of Agriculture agency notified the water district that its loan request for $292,000 and a separate grant for $40,500 had both been approved.

PCWD expects the final paperwork to be signed and funds available in October.

The loan money must be used before the grant money is available. District General Manger Jerry Holldber said the loan funds would be used to purchase additional pipe (more than 11,000 feet of pipeline) and new vehicles.

In other financial business, the board accepted its 2011-12 audit, which the San Bernardino firm of Rogers, Anderson, Malody and Scott recently completed.

PCWD ended the fiscal year with $2.9 million of net assets and revenues — water sales and property taxes — exceeded cost by almost $8,000 last year.

However, the firm had one concern about internal controls regarding the segregation of duties for financial transactions. But Rogers Anderson also acknowledged that “the district does an excellent job of separating duties with its limited resources, and unless more personnel are hired, there may be no practical corrective action possible for this inherent weakness other than strong management oversight.”

Holldber also acknowledged this problem and said he was providing the board with more information and increasing his financial reviews.

In water business, Holldber reported that August water production was only 3.1 million gallons. “That’s got to be one of the lowest August amounts, maybe since I’ve been here,” he noted.

It is the smallest amount produced since 2002. The second smallest was 3.4 million gallons last August and the greatest August water production was 5.0 million gallons in 2003.

Holldber attributed the production drop to the weather this year and the long-term decline in full-time population. He estimated full-time customers are about 20 percent less than a several years ago.

“Even with thunderstorms, this was like a good winter month,” Holldber said.

If production continues at the current pace, PCWD’s total 2012 production will be about 31.4 million gallons, the lowest total annual amount in the past decade. Nevertheless, he is not worried about overall revenues at this point. The minimum bi-monthly payment is nearly 85 percent of the water revenue, so the district’s revenue loss is not proportional to water consumption decline.

The water level for monitoring well no. 10 still dropped two feet during August.