YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2004-74

September 24, 2004

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Carter, that do not have a county auditor.  In addition to a financial and compliance audit of various county operating funds, the State Auditor's statutory audit covers additional areas of county operations, as well as the elected county officials, as required by Missouri's Constitution.

This audit of Carter 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 taken action on mid-term salary increases given to the Associate County Commissioners in 1999.  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 meeting 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. 

• The Public Administrator's salary was set at 85 percent of the salary provided by state law to correspond with the percentage of the maximum salaries paid to other officials.  It is not clear whether the amount paid to the Public Administrator is in accordance with state law. 

• The schedule of expenditures of federal awards did not accurately report expenditures of some federal programs.  Total federal expenditures were overstated by approximately $75,000 for the year ended December 31, 2003 and understated by approximately $250,000 for the year ended December 31, 2002.

• Formal budgets were not prepared for various county funds for the years ended December 31, 2003 and 2002. Actual disbursements exceeded the budgeted amounts in various funds.  The county's annual published financial statements did not include the financial activity of some funds as required. 

• The county did not always enter into formal written agreements when required, and did not always require evidence of the receipt of goods or services on invoices prior to approving expenditures for payment.

• Several concerns were noted in the Sheriff's procedures.  Accounting and bookkeeping duties are not  adequately segregated, bank  reconciliations are not prepared, receipts are not deposited on a timely basis, accounting for prisoner board costs is not adequate, and an inventory record of seized property is not maintained.

• Several concerns were noted in the County Collector's procedures.  The annual settlements were not correct.  Total collections did not always agree to the total distributions and some activity was incorrectly reported.  Monthly listings of liabilities are not prepared and reconciled to cash balances.  The reconciled bank balance was approximately $82,000 as of February 29, 2004, and included unidentified monies of approximately $13,000.  Some mail receipts are deposited after the collector has prepared her monthly abstract and are not properly accounted for and distributed. 

The County Collector accepts partial and pre-payments from taxpayers and holds these payments in escrow until the full payment is received and applied to the taxes due.  The escrow account ledger was not complete as 4 of 10 receipts tested were not accounted for on the County Collector's escrow account ledger. 

The County Collector incorrectly calculated the one-percent withholdings due to the Assessment Fund and as a result, an additional $2,462 should be withheld from future collections.  Additionally, the County Collector is not properly withholding commissions from current tax collections.  As a result, approximately $16,700 was not withheld from tax collections of the various taxing authorities and turned over to the General Revenue Fund.

The County Clerk and County Commission do not adequately review the annual settlements of the County Collector and controls over property tax book additions and abatements are not adequate.

• During January 2004, the Health Center Board amended the 2003 budget to reflect increased expenditures made during the year.  Budget amendments, when applicable, should be made when such expenditures are anticipated and prior to their incurrence.  Also, budgets prepared by the Health Center Board were not accurate and complete and financial records and procedures are in need of improvement.

The audit also suggested improvements in the procedures of the Associate/Probate Division, the Circuit Clerk, and the Senior Citizens' Service Board.

Complete Audit Report