YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2005-01

January 13, 2005

The following report is our audit of the County Collector, Pulaski County, Missouri.

The Pulaski County Collector contacted the State Auditor's Office and the Missouri State Highway Patrol in June 2004 concerning possible missing receipts in his office.  Weaknesses in the internal control and record keeping systems of the County Collector's office allowed missing receipts of at least $21,737 to go undetected for the period March 1, 2003 through June 30, 2004.  These missing receipts may have been detected on a more timely basis if adequate oversight and reviews had been performed and if adequate internal controls had been established.  Many of these control weaknesses were in prior audits but were never addressed.  In addition, the County Collector has identified additional missing receipts of at least $10,809 prior to March 1, 2003.  Information regarding these missing receipts has been shared with law enforcement authorities.  The former chief deputy collector's employment with the county was terminated on June 30, 2004.

Accounting duties were not adequately segregated, and no one independent of the duties of receiving and recording monies was comparing deposits to the daily abstract of collections.    The chief deputy collector prepared daily summaries of tax receipts and deposits.  However, the missing receipts were allowed to go undetected, in part, because these summaries contained inaccurate receipt information, and due to the lack of adequate segregation and reconciliation procedures, no one verified the accuracy of these summaries.

In addition, bank reconciliations were not performed and liabilities were not reconciled to the cash balances, and as a result, differences have occurred and not been corrected or resolved in a timely manner.  From March 1, 2003, to June 30, 2004, the County Collector distributed $10,347 for taxpayers who had shown evidence that their taxes were paid, even though the county's records indicated the amounts were still delinquent.  The County Collector made these distributions on the assumption that they represented part of an unidentified balance; however, the County Collector did not track the total amount paid out in this manner, and never performed the necessary reconciliation.

The County Collector also needs to improve controls over reversing entries, and should prepare annual settlements as required by state law.

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