YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 17, 2002

Report No. 2002-92

IMPORTANT:� The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Ozark, 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 Ozark County included additional areas of county operations, as well as the elected county officials.� The following concerns were noted as part of the audit:

• In April 2000 the county separated its road and bridge operations into two districts, East and West.� Road funds are split evenly between the two districts, and each district maintains separate records, separate employees, and separate equipment.� In 2001, the Eastern District did not have an adequate cash balance to pay for rock and borrowed $49,000 through a tax anticipation note, incurring interest expense of $1,240.

The county's reasons for dividing the Special Road and Bridge Fund into two separate districts is not clear.� In addition, the county's method of dividing the funds is questionable, as no consideration was given to road quality at the time of the split, assessed valuations of the two districts, etc.� Further, if the county had not separated the Special Road and Bridge fund, it appears it would not have been necessary for the county to borrow funds and incur interest expense.

• The county has not established cash management procedures to ensure the minimum time lapses between its receipt of federal project monies and the disbursement of such monies to contractors.� Federal project monies were held for longer than the two day maximum allowed by the Cash Management Improvement Act.
  
  
• The county does not have procedures in place to track federal awards for preparation of the schedule of federal awards.� The information presented by the County Clerk contained numerous 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.

�        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 Ozark County�s Associate County Commissioners salaries were each increased.

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 the Associate County Commissioners, totaling approximately $7,800 for the two years ended December 31, 2000, should be repaid.

• The County� Commission does not maintain adequately detailed minutes of its meetings.� Minutes do not reflect voting, abstaining from voting, phone bids solicited or sole source procurement.� In addition, as of July 17, 2002, the last entry in the official record book was for July 1, 2002.� 

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