YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

The city does not prepare annual budgets.� State law requires the preparation of an annual budget which shall present a complete financial plan for the ensuing year.� A complete and well-planned budget, in addition to meeting statutory requirements, can serve as a useful management tool by establishing specific cost expectations for each� area.�  

The city receives a grant of approximately $117,000 each year from the state�s Division of Family Services (DFS).� The purpose of the grant is to provide office space for several DFS workers and for services related to job training and transportation for citizens in the Welfare to Work Program.� The city passes through all the monies received for this grant to the Bootheel Community Development Corporation (BCDC), which provides these services for the citizens.� There are potential conflict of interest concerns with the Mayor being president of BCDC.� Minutes of the Board of Aldermen indicate the Mayor was involved in some discussions for matters involving the BCDC.� City officials should avoid any type of involvement in city decisions that relate to themselves or businesses in which they have an interest.� In addition, the city does not have a contract with the BCDC and does not monitor the BCDC�s expenditures of grant monies. 

The city did not obtain appraisals prior to selling two separate parcels of land for a total of $12,500 to the Bootheel Community Development Corporation.� Considering the close relationship between some city officials and BCDC, there is a greater need to ensure both sides receive fair and equitable treatment in all transactions between the city and BCDC.� An independent appraisal would have provided better documentation that both the city and BCDC received fair and equitable treatment in these land transactions. 

The city received Community Oriented Policing Services (COPS) grants totaling $53,938. The city did not maintain adequate records to ensure grant reimbursements complied with the terms of the grant agreement and to ensure the city reported only eligible expenditures to the Department of Justice. 

The city has not made arrangements to have an audit performed of federal financial assistance for the year ended June 30, 2001.� Since the city spent over $300,000 of federal awards during the year, it is required to obtain a Single Audit of these expenditures in accordance with federal law. 

The city levies property taxes for parks and recreation, library, and public health services and collected $1,138 during the year ended June 30, 2001, for each of these three tax levies. �The city does not provide library and public health services and does not keep records to ensure parks and recreation taxes are spent to maintain the city park.� The city needs to review these tax levies and ensure it meets the statutory requirements related to these taxes or discontinue collecting these taxes. 

The city does not maintain records to document that its state motor vehicle-related revenues, totaling $18,311 for the year ended June 30, 2001, are spent for street-related purposes as required by the Missouri Constitution. 

The city does not prepare or publish semi-annual financial statements nor has the city obtained annual audits of its sewage system as required by state law.� In addition, although the City Clerk indicated she prepares monthly financial reports for the Board of Aldermen, some reports could not be located and some reports did not include all financial activity of the city.� 

The city does not have formal written bidding procedures and does not solicit bids for significant purchases.� Vendor invoices or their supporting documentation were not retained for some expenditures.� The board does not approve the payment of expenditures or review supporting documentation prior to disbursing city funds.� The city does not have a contract with the City Attorney and does not prepare IRS Forms 1099 as required.� Items purchased from the State Agency for Surplus Property (SASP) by a consultant who is not a city employee were missing and the city had to reimburse SASP the fair market value for the missing items. 

The audit also includes some matters related to salaries and payroll, board meetings and ordinances, segregation of duties, fixed assets, and the municipal court, upon which the city should consider and take appropriate corrective action.� 

Complete Audit Report