YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

August 27, 2002

Report No. 2002-59

IMPORTANT:� The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Audrain, which do not have a county auditor.� However, to assist such counties in meeting federal audit requirements, the State Auditor will also provide 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 it 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 Audrain County included additional areas of county operations, as well as the elected county officials.� The following concerns were noted as part of the audit:

����� Formal budgets were not prepared or obtained for all county funds for the two years ended December 31, 2001, resulting in a significant omission from the county's financial statements.� No information regarding the increasing fund balance of the Special Law Enforcement Bond Fund was conveyed in the county's budget document.� Although many of the unbudgeted funds are not under the direct control of the County Commission, budgets are still needed to comply with the law. 

������ The County Treasurer's failure to adequately perform accounting procedures including� receipting, recording, and month-end reconciling resulted in some record keeping errors related to the county's two main bank accounts not being identified or corrected in a timely manner.� In addition, some known discrepancies have not been investigated and resolved.� As a result, the bank balances do not reconcile to the fund ledger balances.� 

������ The county does not have adequate procedures in place to track federal financial assistance for preparation of the schedule of expenditures of federal awards.� The county�s schedules for 2000 and 2001 contained several errors and omissions.� Without an accurate schedule, federal financial activity may not be audited and reported in accordance with federal audit requirements, which could result in future reductions of federal funds. 

���� Interest totaling approximately $127,000 earned from June 2000 to December 2001 has not been allocated to the various funds held in the county revenue checking account.

���� The county's procedures are not adequate to ensure fixed assets purchases are added to the property records.� In addition, the statutorily required periodic inventories and inspections� have not been performed and no reports have been filed with the County Clerk.

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