YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2004-97

December 22, 2004

IMPORTANT: The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Pike, 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 Pike 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 Treasurer did not perform bank reconciliations or reconciliations between the fund ledger book balances and the related bank account balances. As a result, errors between the bank and book amounts were undetected by the County Treasurer and accumulated differences had not been identified or corrected. The lack of these reconciliations was noted in the prior three audit reports. The County Treasurer's semi-annual settlements were not complete or accurate, due to the errors noted and other missing information.

� In April 1997, the county passed a Road and Bridge Capital Improvement Sales Tax of one-half of one percent and in November 2001, passed a Hospital Capital Improvement Sales Tax of one-half of one percent. The county appears to have exceeded the statutory maximum for capital improvement sales taxes by one-half of one percent. In addition, neither of the Capital Improvement Sales Tax ballots specified the number of years the sales taxes would be in effect and the county had not adequately monitored the Hospital Capital Improvement Sales Tax to ensure the monies were spent in accordance with state law. Also, the county had not sufficiently reduced property taxes by 50 percent of the total general sales tax revenues.

� Budgets were not prepared for several county funds and many of the same funds were not included in the published financial statements. The total of the unbudgeted disbursements for these funds for the years ended December 31, 2003 and 2002, were $683,481 and $981,495, respectively.

� The county did not have procedures in place to adequately track federal awards for preparation of the schedule of expenditures of federal awards. Seventeen grants were omitted for one or both of the years ended December 31, 2003 and 2002 with omitted expenditures totaling $191,991 and $350,482, respectively. Five other grants were misstated by a total of $49,332 and $41,679 for the years ended December 31, 2003 and 2002, respectively and four other grants were reported

under the wrong program numbers. Some errors also involved grants managed by the Sheriff's Department and the Health Center. Also, the County Commission did not adequately document the review and approval of the request for funds and related invoices for some federal grant programs, or adequately document its review of three engineering firms when procuring engineering services. In addition, the County Clerk did not retain copies of all contracts, grant agreements, invoices, or other supporting documentation for the federal programs.

� Increasing costs in the county's law enforcement and 911 services could severely impact the county's financial condition if left unchecked. The Law Enforcement Sales Tax Fund (LEST) had a deficit fund balance of ($64,005) at December 31, 2003, and the budget for 2004 estimated an increased deficit fund balance of ($137,854) at December 31, 2004. Likewise, the financial statements of the 911 Fund reflect a decrease in cash balance from $297,438 at January 1, 2001 to $133,467 at December 31, 2003. The 911 Fund budget for 2004 estimates a further decrease in cash balance to $71,865 at December 31, 2004. The declines in the cash balances of the LEST and 911 funds, along with future financial obligations, could deplete General Revenue Fund balances as the General Revenue Fund is likely to have to subsidize these operations.

� The Health Center's internal controls over cash receipts were in need of improvement. Receipt slips were not prenumbered and were not issued for some monies received, monies were not deposited intact or timely, checks were not restrictively endorsed upon receipt and duties were not adequately segregated. In addition, budgets were not accurate and complete, billings for services were not timely, and related payment activity was not adequately monitored.

Also included in the audit were recommendations related to bidding, officials' salaries and bonds, expenditures, fuel usage records, computer controls, and property tax records and procedures of the County Collector.
 

Complete Audit Report