YELLOW SHEET

Office of the State Auditor of Missouri
Claire McCaskill

 

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 requestsfor access to records.State law lists requirements for making district records available to the public. 

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