YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-29
April 27, 2000
Some problems were discovered as a result of an audit conducted by our office in response to the request of petitioners from the City of Gainesville, Missouri.
The city improperly claimed and received reimbursement of approximately $22,000 from a federal grant to which it was not entitled.
The city received federal assistance form the U.S. Department of Justice under the COPS program for three additional full time officers which increased the number of city officers to four.
In February 1999, the city received reimbursement totaling $43,393 for the period April 1997 through December 1998. During this period, the city employed only two or three officers (including the original officer) but included the salary of the original officer in the reimbursement request. Because the grant agreement required the city to fund 100 percent of the first officer, excess disbursements of approximately $22,000 were claimed.
City ordinance 97-301 requires all purchases over $100 to be bid. The City Clerk indicated that a $500 threshold is used, rather than the $100 requirement. Although the city did solicit bids for some purchases, bids were either not solicited or bid documentation was not retained in some instances. Examples include $26,928 for asphalt, $26,462 for trash service, $2,600 for a sewer pump and basin, $1,938 for surveying, $1,872 for health insurance, and $1,410 for water tower inspection and treatment. In addition, the city did not document the proposals received for auditing services.
The city returned funds reserved for the repair of the city's gazebo to an original donor without the consent of all donors. The Mayor and the board of Aldermen do not always review related invoices and supporting documentation prior to signing checks and some invoices did not contain an indication of receipt of goods or services. Mileage or maintenance logs are not maintained for any of the vehicles and equipment owned by the city.
The city purchased a sewer pump and basin for $2,600 for a citizen to use at his home and allowed the citizen to reimburse the city for the purchase. By purchasing the item in this manner, the citizen may have received it at special city prices and avoided paying sales tax. The city should not allow such expenditures to be incurred using its sales tax-exempt status. Doing so violates the terms of the city's sales tax exemption letter. A similar comment was made by the city's auditor during the previous annual audit.
Board minutes are not always prepared for closed meetings. Documentation of notice for several of the board meetings could not be located and board minutes were not always signed by the City Clerk and Mayor. The city has not established a formal policy regarding public access to city records.
Budgets were not prepared in accordance with statutory requirements and the city approved expenditures in excess of budgeted amounts.
The city has not published semi-annual financial statements as required by state law. Section 79.160, RSMo 1994, requires the Board of Aldermen to prepare and publish semi-annual financial statements.
An annual maintenance plan for city streets has not been prepared. A formal maintenance plan should be prepared in conjunction with the annual fiscal budget and include a description of the roads to be worked on, the type of work to be performed, an estimate of the quantity and cost of materials needed, the dates such work could begin, the amount of labor required to perform the work, and other relevant information.
Procedures have not been established to ensure expenditures are properly allocated among the various funds benefiting from the expenditures and to ensure restricted revenues are expended only for their intended purposes. The city pays wage and retirement benefit expenses from the general fund, street fund, water fund, and sewer fund. In addition, the city pays health insurance and worker's compensation benefit expenses from the general fund only. No documentation is available to support the method of allocation used. A similar comment was made by the city's auditor during the previous annual audit.
Law enforcement training fees are not accounted for separately or maintained in a separate fund.
The city maintains twenty-nine bank accounts. Except for separate accounts for Sewerage System Revenue Fund, Bond Reserve Fund, Replacement and Extension Fund, and Sinking Fund accounts required by the revenue bond covenants, it appears that the remaining bank accounts could be consolidated to help simplify the city's records and reduce the number of accounts that must be monitored and controlled. A similar comment was made by the city's auditor during the previous annual audit.
The city does not reconcile the total gallons of water billed to customers to the gallons of water pumped. The City Collector prepares monthly utility cards for each customer which reports the number of gallons billed and the maintenance supervisor records meter readings of the city's four water wells, so information is available to perform such reconciliations. A formal review of the city's water and sewer rates has not been performed since 1986.
The city's ordinances are not complete and up-to-date, and ordinances have not been established in all instances where needed.
Controls over receipts of the municipal court are not adequate. Neither the police department nor the municipal division adequately accounts for the numerical sequence and ultimate disposition of parking and traffic tickets issued. Records of convictions on traffic offenses are not always forwarded to the Missouri State Highway Patrol. Court costs due to the state are not disbursed on a timely basis and have not been remitted for the Peace Officer Standards and Training Commission fees. Accounts receivable records are not adequately maintained.