YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2000-01
January 4, 2000

The Nineteenth Judicial Circuit Court consists of Cole County. During our audit, we identified certain management practices which we believe could be improved.

At December 31, 1998, the Nineteenth Judicial Circuit, Cole County, Missouri, held assets for four receivership cases totaling $2.75 million. Three of the four receiverships involve utility companies for which the court has ordered the companies to make refunds to customers, and the other receivership involves an insurance company that is being liquidated. One of the four cases was placed in receivership in 1981 and its assets are $1.6 million of the $2.75 million total, while the other cases were placed in receivership from 1986 to 1994. The assets of the receiverships are invested, and the investment income is distributed based on orders from the circuit judges.

Although only $4,819 from these receiverships' assets was distributed to the claimants of the assets from 1996 through 1998, other parties as noted below have received more substantial amounts during the three years ended December 31, 1998:

The receivers' fees were paid to current or former court employees who serve as the court-appointed receivers. The receivers' duties and responsibilities include holding and administering the assets of the cases. In addition to their normal court salaries, the receivers are paid monthly compensation ranging from $250 to $430 from the receiverships' assets, and the receivers are to perform these duties outside of normal court working hours. Because there has been little activity in these accounts other than investment activity which is handled by the applicable banks, it appears the receivers' workload has decreased over the years while their compensation has remained the same.

The State Auditor recommended the circuit judges review these receivership cases and determine whether the receivership assets should be distributed to the state Unclaimed Property Section or should be disposed of in another manner.

Receipts handled by the Associate Circuit Division III from civil, criminal, traffic, and municipal cases, as well as applicable cash bonds totaled approximately $967,000, $925,000, and $833,000 for years ended December 31, 1998, 1997, and 1996, respectively. Our audit noted the following concerns related to these collections:

Some monies received for payment of traffic tickets are not recorded on the receipts ledger or deposited on a timely basis. All receipts should be recorded immediately upon receipt and deposited on a timely basis.

The court has not established procedures to follow up on checks which have been outstanding for a considerable length of time. If the payees cannot be located , the amounts should be disposed of in accordance with state law.

The Juvenile Office receives payments for restitution, care and maintenance, and drug test fees collected directly by juvenile officers. Receipts handled by the Juvenile Office totaled approximately $22,700, $12,500, and $14,500 for years ended December 31, 1998, 1997, and 1996 respectively. Monies collected by the Juvenile Office are transmitted to the Cole County Treasurer's office.

Receipts related to care and maintenance are not transmitted to the County Treasurer's office on a timely basis.

The Juvenile Office did not retain billing invoices, ledgers of account balances, and payment histories for care and maintenance cases for the years ended December 31, 1997 and 1996. In addition, these records were discarded for certain cases filed in 1998. These records should be retained to document the validity of transactions, provide an audit trail, and account for all monies received. In addition, all records should be retained in accordance with Supreme Court Administrative Rule 8.

Procedures to monitor and collect accrued costs could be improved. The Juvenile Office has established procedures to issue second billing notices when delinquent, issue court orders for hearings on payment of costs, and refer cases to the Deputy Juvenile Officer for possible garnishment of wages. Our review of accrued costs noted cases in which no court order was entered and no other follow-up action was taken to collect accrued costs. Three cases reviewed had outstanding balances totaling approximately $5,362 in which no pursuit of collection has been made since December 1998.

In addition, Juvenile Office personnel indicated that certain accounts were written off approximately two months after a second billing notice was issued and in some instances accounts were written off without the authorization of the Judge. Also, when authorization was obtained from the Judge to write off an account, the applicable documentation was not kept. To ensure the validity of account write-offs, all amounts written off should be approved by the Judge and documentation of this approval should be retained.

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