YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

April 4, 2003

Report No. 2003-31

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

• Problems with county financial records and procedures have been noted in past audit reports; however, little or no improvement has been made.  The accounting records prepared by the County Clerk and County Treasurer for the years ended December 31, 2001, and 2000 did not reconcile.  Additionally, the County Clerk and the County Commission did not maintain supporting documentation for various county expenditures, and did not maintain lease agreements and records documenting payments made and balances due on lease agreements.
  
• Numerous inaccuracies and deficiencies were noted in the information presented in the county's budget documents for 2001 and 2000.  Such inaccurate financial information did not provide the County Commission with sufficient information to make informed decisions for the county and did not provide the citizens of Shannon County with reliable information about the county's finances. 

• As similarly noted in prior audit reports, the financial condition of the county's General Revenue Fund remains weak.  Also, the county has not taken into consideration the additional liabilities of the General Revenue Fund resulting from errors made in past and current audits.  The county's current General Revenue Fund balance is not sufficient to pay back these amounts owed.  In addition to the General Revenue Fund, the County Commission approved expenditures in excess of available monies which resulted in deficit fund balances at December 31, 2001 and 2000 for various county funds.  

�        Controls and procedures over county expenditures are in need of improvement.  Bids were not always solicited or advertised by the county nor was bid documentation retained for various purchases.  Invoices were not always noted as paid or otherwise canceled upon payment.  The county distributed Special Road and Bridge Fund property taxes pertaining to the applicable cities in the county without a written agreement and without monitoring the cities' use of these funds.  Additionally, the County Clerk failed to include three federal grants on the schedule of federal awards.

�        The county paid performance awards totaling $30,500 to various road and bridge employees during the years ending December 31, 2001 and 2000.  These performance payments or bonuses appear to represent additional compensation for services previously rendered and, as such, may violate the Missouri Constitution and an Attorney General's Opinion. 

�        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 years.  Based on this statute, in 1999 Shannon County�s associate county commissioners salaries were each increased approximately $8,110 yearly, according to information provided by the County Clerk. 

On May 15, 2001, the Missouri Supreme Court handed down an opinion that all raises given pursuant to this statute section are unconstitutional.  Based on that decision, the raises given to each of the associate county commissioners, totaling $16,220, should  be repaid. 

�        The Sheriff maintained an account outside the county treasury for various accountable fees which were used to purchase a vehicle and to pay monthly access fees for a law enforcement system.  Sheriff fees are not remitted to the County Treasurer on a timely basis, receipts are not deposited timely, and prenumbered receipt slips are not issued for some monies received. Adequate controls over seized property have not been established.  Neither the Sheriff nor the County Treasurer routinely compares prisoner board billings to subsequent payments, and there are no written agreements with cities for boarding of prisoners. 

• Prior audit reports have addressed the inadequacy of the county's property tax books and procedures.  While the County Commission and the County Clerk previously responded that recommendations would be implemented, conditions have not improved.  In addition the County Collector is responsible for collecting and distributing property taxes for most political subdivisions within the county.  Many significant problems were noted in the control procedures used by the County Collector to account for property tax collections, including the lack of appropriate reconciliations and timely distributions.  Although many of these problems were noted in several previous audits, little attempt has been made to implement these prior recommendations.

Also included in the audit are recommendations related to county expenditure and budgetary practices, published financial statements, personnel policies and procedures, salary commission meeting minutes, general fixed assets, and recycling services.  The audit also suggested improvements in the procedures of the County Clerk, Circuit Clerk and Ex Officio Recorder of Deeds', Prosecuting Attorney, Associate Circuit Division, County Treasurer, Health Center, and Senior Citizen Services Board.

Complete Audit Report