YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 30, 2003

Report No. 2003-102

IMPORTANT:  The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Nodaway, 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 Nodaway 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 has not established adequate procedures to track the amount of outstanding reimbursements due from the state for BRO projects.  The county had submitted reimbursement requests totaling $456,000 which were not received on a timely basis and no follow up action was taken.  The county paid approximately $4,700 to a check locator service and found approximately $93,000 was an outstanding check from the state.  This payment would not have been necessary if the county had adequate procedures in place to monitor reimbursement requests. Another reimbursement for approximately $322,000 was outstanding for five months before the county resubmitted an accurate request.
   
• The Schedule of Expenditures of Federal Awards prepared by the county was not complete or accurate.
   
• Salaries for the Associate Commissioners, Sheriff, and Coroner increased significantly in January 1999.  Section 50.333.13 RSMo, enacted in 1997, allowed salary commissions meeting in 1997 to provide mid-term salary increase 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 Nodaway County's Associate County Commissioners' salaries were each increased approximately $7,060 yearly, 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 $14,120 for the two years ended December 31, 2000, should be repaid. 

Increases for the Sheriff and Coroner were $7,000 and $6,000, respectively and were given during their term of office.  In light of the Supreme Court ruling, raises given to officials within their term of office should be re-evaluated for propriety. 

• The county's budgets and published financial statements for the years ended December 31, 2002 and 2001 excluded some funds required to be included by law.  In addition, the County Commission approved expenditures in excess of budgeted amounts for various funds.
   
• The Juvenile Office procured legal services from an attorney, who also serves as the county Prosecuting Attorney, but maintained no documentation to support how the attorney was selected.  No agreement exists detailing the services to be performed and the amount to be paid and no supporting documentation was available from the Juvenile Office to support the monthly payments of $1,000 per month in 2002 and $500 per month in 2001.  The Circuit Judge provided an opinion that this situation was appropriate because the payments to the Prosecuting Attorney were for work performed on Juvenile cases for the other four counties in the circuit and not for work performed on Nodaway County cases.  Considering that Nodaway County is responsible for 51% of the 4^th Judicial Circuit expenses, and there is no documentation to show which cases are charged for, the county may, unknowingly, be paying for work performed on Nodaway County cases.

The audit also suggested improvements to procedures over county bidding practices, the reconciliation of aggregate abstracts to tax books, and reporting and tracking of employee leave balances.  In addition, the audit included recommendations to the Sheriff, Health Center, Associate Division, and the Senate Bill 40 Board.

Complete Audit Report