YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2005-90

December 2005

The following problems were discovered as a result of an audit conducted by our office of the City of New Bloomfield, Missouri. 

The financial condition of the City of New Bloomfield's General Fund has been declining over the past four years.  The undesignated portion of the General Fund balance has declined by approximately $40,000.  While separate bank accounts are maintained for the Street Fund and the Debt Service Fund, the city budgets and accounts for these funds within the General Fund.  Due to combining the restricted funds with the General Fund, the financial decline in the General Fund may not be readily apparent from the monthly financial statements presented to the Board of Aldermen.  The board must develop a long-range plan which will allow the city to reduce its expenditures and/or increase revenues to operate the city within its available resources.  Additionally, annual CPA audits have not been performed timely.  Apparently these delays were due to city officials requesting more time to address concerns brought up by the auditors and city employees not being able to locate records needed for the audits.

Capital improvement sales tax monies are not accounted for separately from other city funds as required by state law.  In addition, the city used $6,909 of state motor vehicle-related revenues  to pay topography costs for a handicap parking space and handicap ramp at city hall, and had no documentation to show how these expenditures complied with constitutional provisions.

Two transfers totaling approximately $35,500 were made from the Street Fund to the Debt Service fund in 2001 and 2002 without prior approval by the Board of Aldermen.  It was unclear if these transfers were permanent or if they represented a loan.  Also, documentation does not exist to support the allocation of payroll, fringe benefit, and various other expenditures charged to the city funds.

The city's budgets did not include some information required by state law.  In addition, the city has not prepared an annual maintenance plan for city streets.

The city did not always follow city procedures or state law when making purchases or procuring engineering services.  Additionally, other professional services were not always competitively procured, including audit and legal services.  The city did not have signed written agreements in place regarding payments for some services.

The open meeting minutes do not document the specific reasons for going into closed session.  In addition, the board did not document how some items discussed in closed session complied with state law.

Also included in the report are recommendations related to the water and sewer project,

accounting controls, ordinances, and building permit procedures.

Complete Audit Report