YELLOW SHEET

Office of the State Auditor of Missouri
Claire McCaskill

Report No. 2000-12
February 29, 2000

Some problems were discovered as a result of an audit conducted by our office in response to the request of petitioners from the Jefferson Township, Linn County, Missouri.

The township did not establish a separate debt service fund to account for tax collections and the payment of the bond principal and interest. As a result, the township had no record of the amount of debt service revenues on hand each year. When computing the annual debt service tax rate, the township underreported the amount of debt service funds on hand, which resulted in an overcalculation of the required debt service tax rate. The township levied and collected $29,681 in excess property taxes for the 1994 bond issue which remain in the township's general fund. Future debt service tax levies should be reduced by this amount.

The township did not properly pay, report compensation, and withhold payroll taxes for compensation paid to township officials.

The township board does not prepare formal budgets. The township prepares a schedule of the prior year's actual expenditures to use as a guide for monitoring current year's expenditures; however, this schedule does not contain all information required by state law. A complete and well-planned budget, in addition to meeting statutory requirements, can serve as a useful management tool by establishing specific cost and revenue expectations for township operations. A budget can also provide a means to effectively monitor actual costs by periodically comparing budgeted amounts to actual expenditures.

The township board does not publish annual financial statements and inventory listings as required by state law. At a minimum, the published financial statements should contain the beginning cash balance, actual receipts by source for the year, actual expenditures by major category for the year, and the ending cash balance.

State law requires the township to file annual financial reports with the State Auditor's office. The township did not prepare or file financial reports for the years 1993 through 1997. The 1998 financial report was not filed with the State Auditor's office until October 12, 1999. The financial reports are to be filed within four months after the end of the township's fiscal year (the requirement is six months after the end of the fiscal year if an audit report prepared by a certified public accountant is filed).

The township does not have a formal policy regarding public access to township records. A formal policy regarding access to township records would establish guidelines for the township to make records available to the public. This policy should establish a person to contact and an address to mail requests for access to records.

The Township Trustee was not bonded from April 1993 to April 1999, even though a bond is required by state law. On August 23, 1999, a bond was obtained in the amount of $250,000, retroactive to April 1, 1999, and effective until March 31, 2000. In addition, the other two board members are co-signers on the bank account but are not bonded. Failure to bond all persons with access to assets exposes the township to risk of loss.

Complete Audit Report


Missouri State Auditor's Office
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