YELLOW SHEET Office of the State Auditor of Missouri |
December 14, 2000
Report No. 2000-124
Some problems were discovered as a result of an audit conducted by our office in response to the request of petitioners from the Lincoln Community Nursing Home District, Lincoln, Missouri.
The
district did not prepare a budget for the year ended June 30, 1998 and the
budget prepared for the year ended June 30, 1999 was not adopted by the
board.� State law requires the
preparation of an annual budget which shall present a complete financial plan
for the ensuing year.� In addition, the
approved budget for the year ended June 30, 2000, did not include a budget
message, a comparative statement of actual revenues and expenditures by budget
category for the two preceding years, or a budget summary as required by 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 each area of district
operations.� A budget can also provide a
means to effectively monitor actual costs by periodically comparing budgeted
amounts to actual expenditures.� A
complete budget should include separate revenue and expenditure estimations by
account, and include the beginning available resources and reasonable estimates
of ending available resources.� The
budget should also include a budget message and comparisons of actual or
estimated revenues and expenditures for the two preceding fiscal years.
For
the year ended June 30, 2000, the district approved expenditures in excess of
the budgeted amount by $35,809.� The
board did not receive periodic reports so that it could compare actual revenues
and expenditures to budgeted amounts.
The
district did not have a formal bidding policy.�
As a result, the decision of whether to solicit bids for a particular
purchase was made on an item-by-item basis.�
During the past several years, bids were either not solicited, bid
documentation was not retained, or the lowest bid was not always accepted.� Examples include, bid documentation could
not be located for a $3,341 folding door and the district spent $9,690 for
computers and the lowest bid (which was $9,290) was not accepted.� There was no documentation to indicate the
reason why the higher bid was accepted.
Formal
bidding procedures for major purchases provide a framework for economical
management of district resources and help ensure the district receives fair
value by contracting with the lowest and best bidders.� Competitive bidding helps ensure all parties
are given an opportunity to participate in the district�s business.
The
board conducted several closed meetings during the years ended June 30, 1999
and 2000; however, the minutes did not always document the related vote or the
reasons for closing the meeting.� State
law requires that before any meeting may be closed, the question of holding the
closed meeting and the reason for the closed meeting shall be voted on at an
open session.
The
board minutes did not always include sufficient detail of matters discussed and
actions taken at the board�s meetings.�
For example, in March 1998 the district approved a proposal to upgrade
the computers.� The minutes do not
indicate the bids that were submitted and which bid the district approved.� In addition, the minutes of the board
meetings did not always contain information required by state law.� When the minutes indicated a motion had been
passed, the minutes did not generally indicate the number of votes for and
against.
The
district did not have a formal policy regarding public access to district
records.� A formal policy regarding
access to district records would establish guidelines for the district 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.� State law lists requirements for making
district records available to the public.