Auditor Seal


Office of the State Auditor of Missouri
Claire McCaskill


July 30, 2003

Report No. 2003-76

The following problems were discovered as a result of an audit conducted by our office of the City of Branson, Missouri.

The city has expended approximately $29 million for the development of a waterfront project and a convention center on lakefront property in the downtown area.There has been extensive controversy over the development, and the city is currently involved in two pending lawsuits.Our review of the project noted work was performed on the development prior to entering into written contracts, some costs were questionable due to the lack of documentation, bids were not solicited for some services, and an independent feasibility study was not obtained prior to committing to the project.

The city has expended over $1.7 million to subsidize the principal and interest payments on bonds for the Branson Meadows Development Project as of September 30, 2002.While in 1995 the city initially estimated a gain of approximately $19 million, this project has fallen short of meeting original estimations and it appears unlikely that the city will break-even on the project.

The city does not adequately monitor tourism tax collections.Our review noted several business licenses were renewed even though delinquent tourism taxes were owed, and penalties and interest were not consistently applied to delinquent accounts.In addition, concerns were noted regarding the marketing portion of the city's tourism tax funds.

Large payments were made to city administrators and directors for "special leave", unused vacation and sick leave, and deferred compensation with no evidence of prior board approval.In addition, payments made during 2001 and 2002 to select city employees totaling $56,733 for "special leave" appear to be in violation of the Missouri Constitution. Further, the City Administrator received $19,263 for unused vacation and sick leave; however, leave records maintained by the city were unreliable.

Financial information prepared by the city to inform city residents and the Board of Aldermen of the city's financial position was often incomplete, inaccurate and lacked adequate detail.For instance, $4 million in reserve funds were not reflected in the city's budget, and a $1.3 million transfer was omitted from the city's Tourism Tax Fund budget. In addition, there was a $2.8 million difference between the ending and beginning fund balance reported in the city's published financial statements.

The city pays for approximately seventy-seven cellular phone plans for various city departments and employees.Cellular phone expenditures totaled approximately $21,800 for the year ending September 30, 2002.The city has not established a written policy regarding cellular phones, and confusion exists among city employees as to whether personal calls are allowed and should be reimbursed to the city.

Several weaknesses were noted with the Board of Aldermen's procedures for closed meetings.Open meeting minutes were not always maintained or signed attesting to their accuracy. In addition, it is not evident if the city is complying with the Sunshine law regarding public requests for information.

The audit also includes some matters related to city vehicles and contractual agreements.

Complete Audit Report

Missouri State Auditor's Office