YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

August 28, 2001

Report No. 2001-68

IMPORTANT:� The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like St. Clair, which do not have a county auditor.� However, to assist such counties in meeting federal audit requirements, the State Auditor will also perform a financial and compliance audit of various county operating funds every two years.� This voluntary service to Missouri counties can only be provided when state auditing resources are available and does not interfere with the State Auditor�s constitutional responsibility of auditing state government. 

Once every four years, the State Auditor�s statutory audit will cover additional areas of county operations, as well as the elected county officials,� as required by Missouri�s Constitution.��

This audit of St. Clair County included additional areas of county operations, as well as the elected county officials.� The following concerns were noted as part of the audit: 

• The health center�s administration repeatedly ignored warnings and recommendations to improve controls and cut costs.� Because of its poor financial condition, the health center has used proceeds from tax anticipation notes to fund normal operating expenses including payroll.� The administration was advised in 1995 and subsequent years by their independent CPA firm to closely evaluate costs and monitor the rural health clinics operations, in addition to investigating the account receivable balances which had tripled in 1997.

In May 2000, two members of the five member Board of trustees, the administrator, assistant administrator, and almost two-thirds of the employees resigned.� An interim administrator and five employees were hired to replace those that left.� As a result, accounting controls, procedures, and records that were in place were abandoned.� The health center fell behind in billing several agencies for services provided which substantially decreased the health center�s ability to generate revenues.

Since the transition of the previous administration, the Board of Trustees has not been provided accurate financial information.� Numerous bookkeeping errors and concerns were noted related to the general ledger, the monthly bank reconciliations, the accounts payable and receivable listings, and the budgets prepared by the administration.�  

Other recommendations include improvements needed in the approval and documentation of expenditures and monitoring of compensatory time accrued by the health center employees.

• A state law, Section 50.333.13, RSMo, enacted in 1997, allowed salary commissions meeting in 1997 to provide mid-term salary increases for associate county commissioners elected in 1996 due to the fact that their terms were increased from two years to four.� Based on this law, in 1999 St. Clair county�s Associate County Commissioners salaries were each increased approximately $5,450 according to information from the county clerk.� 

On May 15, 2001, the Missouri Supreme Court handed down an opinion that holds that all raises given pursuant to this statute section are unconstitutional.� Based on the Supreme Court decision, the raises given to each of the Associate County Commissioners, totaling approximately $10,900, for the two years ended December 31, 2000, should be repaid.� In light of the ruling, any raises given to other officials within their term of office should be re-evaluated for propriety.

• Accounting controls and procedures are in need of improvement related to the inmate account handled by the sheriff�s department.� Bids are not obtained for food purchased for the county jail and records are not maintained to provide adequate control and accountability over food inventories.�� In addition, sheriff department employees are provided meals at� no costs from the jail.� 

• The Public Administrator deferred payment of $5,113 of fees until 2000 ($4,332 and $781 earned and approved by the Associate Circuit Judge in 1999 and 1998, respectively).� The Public Administrator indicated that he did this to reduce the amount of Social Security that would have been required to have been repaid in 2000 when he turned seventy and to increased the amount of compensation reported to the County Employees Retirement Fund during his last year of service to increase the amount of retirement received.

Also included in the audit are recommendations to improve bidding procedures, accounting� controls and procedures for the County Commission and the Prosecuting Attorney.� Several of these issues had been noted in prior audits.

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