YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 26, 2003

Report No. 2003-95

IMPORTANT:  The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Harrison County, 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 Harrison 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 Commission has not adequately carried out its fiduciary responsibilities related to the jail building project.  A professional appraisal was not obtained prior to purchasing a construction site for the jail project and no county inspection has taken place during construction of the jail to ensure compliance with building codes and building plans and specifications.  In addition, an agreement was negotiated with the financial company prior to beginning the bid process.  During May 2002, the county entered into an agreement to lease county land to a financial company on which to construct a county jail.  A twenty year lease agreement was simultaneously entered into with the financial group for the county to lease the jail and make annual lease payments equal to the amount due to purchase the building at the end of the lease term.  The principal amount of the lease is approximately $1.6 million and will be funded by the county one-half cent law enforcement sales tax. 
   
• The County Commission did not adequately monitor the selection process of various design and construction services, such as architectural services and construction contractor, for the nursing home project.  The County Commission responded that they will become more involved in the nursing home building project.
   

• The Lake Project Fund balance includes sales tax revenue which is required to be used for obligations incurred in the construction of the Harrison County Lake; however, the general obligation bonds have been repaid.  The County Commission indicated they are going to ask the voters to approve the use of the monies for maintenance of the lake.  
   
• The county has not taken action on mid-term salary increases given to elected officials in 1997.  On May 15, 2001 the Missouri Supreme Court handed down an opinion that challenged the validity of Section 50.333.13, RSMo, which allowed county salary commissions in 1997 to provide mid-term salary increases for associate county commissioners.  The Supreme Court held this section of law violated Article VII, Section 13 of the Missouri Constitution, which specifically prohibits an increase in compensation for state, county and municipal officers during the term of office.  In the prior audit report, we recommended the county salary commission reevaluate the decision to give mid-term salary increase to all officials; however, no action has been taken. The County Commission has now responded that they will discuss the situation with the Prosecuting Attorney to determine what action to take.
   
• The County Commission has a history of significantly overestimating amounts budgeted for the Special Road and Bridge Fund.  During the last six years, actual disbursements have been only 47 to 75 percent of budgeted expenditures.  Additionally, administrative service fee transfers from the Special Road and Bridge Fund to the General Revenue Fund exceeded three percent of actual disbursements for the two years ended December 31, 2002 and 2001, by a total of $33,882. 
   
• Payments totaling $50,750 for the purchase of the jail construction site, the building design for the new jail, and repairs to a sheriff's department vehicle were authorized from the Special Road and Bridge Fund.  As monies credited to the Special Road and Bridge Fund are restricted for road and bridge purposes, $50,750 is due to the Special Road and Bridge Fund. The County Commission responded that they have established a schedule to repay the monies to the Special Road and Bridge Fund in ten years or less. 
   
• The schedule of expenditures of federal awards did not accurately report expenditures of Highway Planning and Construction funding.  In addition, pass-through entity identifying numbers were not included for most programs.  
   
• Improvements are needed over internal controls in the Sheriff's Office including segregation of duties and perpetual seized property records.  In addition, the Sheriff retained fees of $1,116 for services performed as trustee.  This fee is apparently not allowable pursuant to an Attorney General's Opinion and, as a result, this amount is due from the Sheriff to the county. 

The audit also includes some matters related to cash management and revenue maximization, computer controls, general fixed asset records and procedures, and county commission minutes.

Complete Audit Report