YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

A former city clerk of Sarcoxie negotiated a refund check due to the city and used the monies for personal use.� She also reimbursed herself from city funds for a personal business trip, and personal office supplies.� She pled guilty to misdemeanor stealing and paid $475 in restitution to the city.� Additionally, this former city clerk received several payroll checks in advance of pay periods.� While it does not appear that she was paid more than her weekly salary, there is no indication that these advances were approved by the Mayor or the Board of Aldermen. 

During the year ended April 30, 2001, the city paid more than $3,500 to provide cellular phone service to three city employees.� Several of the phone bills to support these costs were not retained by the city, and several of the bills seemed� excessive.� Also, there was no indication the bills had been reviewed by the individual assigned the phone (to identify personal calls) or reviewed and approved by the Board of Aldermen.� In addition to cellular phones, phone cards totaling $382 were purchased by city employees. 

Our review of city expenditures identified:

• Vendor invoices and other supporting documentation were not retained for numerous city expenditures.

• At least 23 checks totaling $10,485 were issued with only one signature.

• Some city officials are not properly bonded.

• Expenditures from the city's petty cash fund were not adequately documented.

According to the city's independent auditor, $22,504 in health fund money was being held in the general fund as of April 30, 2001.� The property tax revenues related to the health levy represent restricted revenues and are intended to be used only for health related purposes.� Additionally, the city has used water and sewer monies in previous years to pay for general operating expense and as a result the general fund owes the water and sewer fund $30,667. 

In April 2001, the board voted to increase water rates $1.00 per quarter until the rate increases from $3.50 to $7.50 for the first 1000 gallons of usage.� After the final rate increase, revenues will increase approximately $30,000 annually.� However, the board did not prepare a statement of cost to maintain the water system as required when increasing rates.� State law provides that fees may be increased if supported by a statement� of the costs necessary to maintain the funding of the service. 

Other issues related to the water and sewer system include: 

�        The city does not reconcile the total gallons of water billed to customers to the gallons of water pumped. 

�        Duties related to the utility system are not adequately segregated. 

�        There is no supporting documentation or independent approval of credit adjustments posted to the utility system. 

�        The balance in the water meter deposit fund on August 31, 2001 was $2,338 more than recorded utility deposits. 

�        During the year ended April 30, 2001, utility receipts were not always deposited intact, and the method of payment was not always recorded or correctly recorded in the computer system.� 

The audit also includes some matters related to expenditures, budgets and financial reporting, payroll procedures, city streets, ordinances and board meetings, city assets, and the municipal court, upon which the city should consider and take appropriate corrective action.�

Complete Audit Report