YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2005-76
October 2005
The following problems were discovered as a result of an audit conducted by our office of the City of St. Charles, Missouri.
During November 1999, the City of St. Charles purchased property at a cost of approximately $835,000 with intentions to expand the current police department. The city later decided to build a new police station instead. The purchased property was appraised in April 2002 at $675,000 and sold in August 2002 for approximately $500,000. The city did not advertise for bids on this property. The old police station, which had been appraised in April 2002 for approximately $1.2 million, was sold for approximately $725,000. The city requested bids from parties that had expressed an interest in this property, but did not advertise for bids. Additionally, the city purchased a showboat for tourism purposes and eventually disposed of the property without receiving any compensation. The city spent approximately $1.9 million over a 12 year period on this property for acquisition, repair, and maintenance. In 2003, the Council voted to dispose of the property. The city received four proposals from different groups interested in the boat; however, none of these proposals offered the city any money for the boat. These sales were not publicly advertised, nor were proposals formally solicited.
Some expenditures do not appear to be reasonable and prudent uses of public funds and some appear to be donations. Both the Mayor and the City Council have budgeted line items for directives, but there is no city policy stipulating how these funds can be spent. For fiscal year 2003, the Mayor and Council had budgeted directive amounts of $5,000 and $54,000 respectively. One example of the mayor's directive expenditures included a sister city reception dinner at a cost of approximately $1,700. Of this amount, approximately $500 was for the purchase of alcoholic beverages. Included in the council's directive expenditures was a holiday party for city employees and their spouses at a cost of approximately $1,900. These expenditures do not appear to be prudent uses of public monies and do not appear necessary to accomplish the mission of the city.
Some grants awarded appear to be donations, including a $3,000 payment made to a group of local singers; a $5,000 payment to Habitat for Humanity to display a tree on the city's behalf during their annual three day Celebration of Trees fundraising event; and $5,000 to Boone Center Inc. to assist in purchasing a van. Numerous other expenditures similar to these were noted in budget categories. To avoid being a donation, the city needs to ensure the monies are used for city provided services and they receive the required documentation from the entity documenting how the monies were spent or the services received by residents of the city of St. Charles.
The city has entered into contracts where one or more of the parties have not complied with terms of the agreements. The city does not have a policy regarding contract monitoring nor do the individual contracts specify who should monitor them for compliance. Additionally, the city has not established a policy on who is authorized to approve agreements for the city when an expenditure of city monies is not involved.
The city bypassed their normal bidding procedures for some purchases without fully documenting the "emergency" nature of the purchases, including approximately $13,000 for the "emergency" purchase of window blinds for the new police department building. Additionally, in 2001, a $49,500 contract was awarded for a design survey for the 48-inch sanitary sewer replacement project, when three other proposals for less than this had been received. Neither the Board of Public Works nor the City Council minutes documented any reasons for awarding this contract to the higher bidder. Also, several concerns were noted regarding meal and travel expenditures and the lack of adequate supporting documentation for such expenditures.
During the year ended December 31, 2003, the city paid approximately $417,170 for overtime for the police department. All other city employees are paid overtime for work in excess of 40 hours per week, per city policy, while uniformed police officers are paid overtime for hours in excess of 8 hours per day. City personnel indicated this policy was a result of negotiations with the police association; however, they could not provide any documentation.
The Parks Department does not transmit/deposit receipts in a timely manner, restrictively endorse checks immediately upon receipt, or follow up on outstanding accounts receivables on a timely basis. In addition, the duties of receiving, recording, and depositing monies collected for registration and facility rental payments are not adequately segregated. This department collects monies for activity registration, admission and concessions at the swimming pool, facility rental, cemetery sales, and concession sales at the city parks and sports fields. For the year ended December 31, 2003, overall parks department receipts totaled approximately $1,517,000.
Also included in the report are recommendations related to revenue allocation and debt, legal fees, cell phones, Boone's Lick corridor plan, fuel purchases, and the transportation development district.