YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2004-75

September 27, 2004

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Wayne, 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 Wayne County included additional areas of county operations, as well as the elected county officials.  The following concerns were noted as part of the audit:

• Payroll expenditures claimed against the Public Safety Partnership and Community Policing Grants (COPS) � Methamphetamine Initiative grant were not supported by adequately detailed time sheets.  In addition, the office administrator's salary appears to be an unallowable cost.  As a result, salary and fringe benefit amounts totaling $57,871, appear questionable and could be disallowed by the granting agency.  Also, the Schedule of Expenditures of Federal Awards prepared by the county was not complete or accurate.

• The county's General Revenue Fund financial condition is declining.  The 2004 budget projected a zero cash balance at December 31, 2004, and the Special Road and Bridge Fund is owed $68,997 due to the county's property tax reduction related to sales tax.  In addition, the County Commission is considering the construction of a new jail even with its weak financial condition.  It does not appear that the county has sufficient monies to payback the amounts owed to the Special Road and Bridge Fund, adequately reduce the property tax levy in the General Revenue Fund in future years, and to construct a new jail without some increase in revenues or a reduction in expenditures.

• Bids were not always solicited or advertised by the county, nor was bid documentation always retained, adequate supporting documentation was not always obtained and reviewed or was not in sufficient detail for some expenditures.

• The county paid the Western District County Road Overseer $5,300 on October 7, 2003 for a 1992 truck to be used for road and bridge purposes.  The truck was previously owned by the Western District Commissioner who sold the truck for $2,500 to the overseer on October 6, 2003.  No public notice was given and no bids were requested for the purchase of the truck.  This transaction appears to be a conflict of interest and may violate state law.

• Formal budgets were not prepared for various funds, actual expenditures exceeded the budgeted amount in various funds, and expenditures of some funds exceeded the original budgets prior to amending the budgets.  In addition, a deficit ending fund balance was budgeted for the Sheriff's Donations Fund in 2003, the published financial statements did not include the financial activity of various funds, and some county funds are not held by the County Treasurer and disbursed through the county's expenditure system.

• The county has not taken action on mid-term salary increases given to 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 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 County Commission responded they are waiting to see what other counties in the state do on this issue.

• Additional salary concerns include actions of the salary commission in approving a raise for the County Treasurer were not supported by a written legal opinion, the Public Administrator receiving annual compensation based on a salary and fees instead of choosing to receive either a salary or fees, and the Sheriff receiving additional compensation from overtime and other payments.

• Several concerns were noted in the Sheriff's office.  Checks and money orders are not always restrictively endorsed immediately upon receipt, receipts are not posted to the cash control ledger on a timely basis, receipts are not always deposited intact on a timely basis, and the composition of receipts is not reconciled to the composition of deposits.  Also, checks have been outstanding for a considerable length of time and accrued costs are not adequately monitored.

• Several concerns were noted in the Sheriff's commissary procedures.  Accounting duties are not adequately segregated, prenumbered receipt slips are not always issued, checks and money orders are not always endorsed upon receipt, receipts are not always deposited timely, and checks have been outstanding for a considerable length of time.  Also, a commissary inventory listing is not maintained, profit earned on sales is not monitored, open items are not reconciled, and inmate balances are not reviewed.  In addition, various invoices could not be located and questionable purchases were made.

The audit also includes some matters related to personnel policies and procedures and property records and procedures.  The audit also suggests improvements in controls and procedures of the Prosecuting Attorney, Health Center, and the Senate Bill 40 Board.

Complete Audit Report