YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
May 11, 2004
Report No. 2004-38
The following problems were discovered as a result of an audit conducted by our office of the Texas County Public Water Supply District #2.
The Texas County Public Water Supply District #2 (district) did not solicit proposals for professional services. The district has appointed an individual to act as the district's contractor for installing water mains and other services such as installing water meters, turning on and shutting off water service, backhoe services, and maintaining and repairing the district's infrastructure. The district paid over $30,000 to this individual in 2002, and paid over $194,000 from July 2000 to December 2001, for the installation of approximately 15,800 feet of 6-inch waterline and 4,250 feet of 8-inch waterline. There is no documentation of when the district last solicited competitive proposals for these services and the district does not have a written agreement for these services. Additionally, the district does not have a formal bidding policy. In 2002, the district paid over $16,000 and $6,000 to two vendors, respectively, for inventory and supply items, without maintaining bid documentation.
The district paid $610 to a board member for lawn mowing services during the year ended December 31, 2002. State law prohibits a member of a governing body from performing any service for that political subdivision for any consideration other than the compensations he gets for his official duties.
The annual district Christmas dinners for board members and the district's clerk, treasurer, attorney and contractor, as well as spouses and children do not appear to be a prudent, reasonable or necessary use of public funds. For 2002, 2001, and 2000, the district spent a total of over $1,100 for these dinners. The district also paid certain expenses of its contractor, such as fees for conferences and water treatment certification. These payments do not appear to be a necessary cost of operating the district.
The district's budgets are not prepared in accordance with state law. A budget message, actual receipts and disbursements for the two preceding budget years, and the beginning and estimated ending available resources are not presented. Additionally, the district does not obtain an annual audit as required by its by-laws and state law.
The duties of cash custody and record keeping are not adequately segregated and the Board does not provide adequate supervision or review of the work. In addition, not all persons handling district funds are bonded and controls over district checks and receipts need to be improved. Also, the petty cash fund is not operated on an imprest basis.
The district does not periodically review the adequacy of the water rates billed to customers and has not revised the water rates since 1990. The district should prepare a statement of costs which would allow the district to determine the rate necessary to support current and future operations, as well as providing documentation to customers of the rationale behind the rates. Additionally, the district does not investigate large water losses reported on its monthly reports.
The audit also includes some matters related to procedures concerning outstanding checks, bonuses, time sheets and leave, receivables, and property records upon which the district should consider and take appropriate corrective action.