YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 16, 2002

Report No. 2002-91

IMPORTANT:� The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Lincoln, 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 Lincoln 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 county does not have adequate procedures in place to track federal awards for the preparation of the SEFA.� The county prepared a SEFA for the years ended December 31, 2001 and 2000; however, some program expenditures were omitted, most notably, $191,700 passed through the State Highway and Transportation Commission.� In addition, expenditures reported for the Department of Social Services - Child Support Enforcement were understated by $48,154 for the two year period.
  
  
• 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, Lincoln County�s Associate County Commissioners salaries were each increased approximately $5,780 in January 1998 ($7,100 in 1999 and 2000), 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 $19,980 for the three years ended December 31, 2000, should be repaid.

• The County Collector does not have adequate procedures to monitor and ensure monies in his various bank accounts are sufficiently collateralized.
  
• The County Collector accepts partial payments from taxpayers who are unable to pay their bill in full.� The Collector does not adequately monitor these partial payment accounts to ensure proceedings for the sale of land is properly commenced, and to ensure partial payments of personal property taxes are applied to the oldest amount due.� In addition, the Collector does not perform a reconciliation between the partial payment ledger and the reconciled bank balance.

The County Collector did not correctly compute Proposition C commissions and fees withheld from property taxes for the Elsberry R-II School District.� As a result, approximately $10,000 was over withheld from this district and deposited to the General Revenue and Assessment Funds.� This amount should be reimbursed to the Elsberry R-II School District and future Proposition C ratios should be computed correctly.

• Approximately $600 and numerous accounting records could not be located for the Record Check account maintained by the former Sheriff.� In addition, the Sheriff's office needs to improve controls over the commissary account.

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