Auditor Seal

YELLOW SHEET

Office of the State Auditor of Missouri
Claire McCaskill

Report No. 2006-15

March 2006

 

We identified the following problems with the Johnson County Recorder's office.


Weaknesses in the internal control and record keeping systems of the Johnson County Recorder's office allowed misappropriations of at least $23,187 to occur during the period January 1, 2003 through July 31, 2005.  Receipts totaling at least $5,372 were collected during 2004 by the Recorder's office and were not recorded on a daily abstract or transmitted to the County Treasurer for deposit.  Additionally, a State of Missouri check for $17,815 was erroneously received by the Recorder's office, and included in a 2005 transmittal apparently to conceal a shortage.  Furthermore, during 2003 and 2004, numerous personal checks written by the former Recorder were included with deposits or transmittals and were returned for insufficient funds. 

 

Due to other missing records, additional monies may be missing but not identified. These misappropriations may have been detected on a more timely basis if recommendations made by the county's independent auditor related to internal controls in the Recorder's office had been established.  Information regarding these misappropriations has been shared with law enforcement authorities.

 

The sale of copies of recorded documents to one company, as well as the purchase of computer software necessary to read the images, was not handled consistent with sales to other title companies.  Similar to the system the county purchased in 2003, additional software and equipment was purchased in May 2005, at a cost of over $3,000 but was delivered to a local title company and apparently installed on their computers.  This title company reimbursed the county, but not until September 2005, almost four months later and no sales tax was paid.  The former Recorder apparently authorized the transfer of  recorded documents that were indexed by the county from 1991 to May 2005 onto the computer of this title company.  The current Recorder determined this download consisted of approximately 503,000 pages. Based on charges for copies to other companies, this represented approximately $75,000 in potential revenue, but there was no evidence that any payment was made to the county for these downloaded documents.    

  

The former Recorder did not deposit/transmit receipts intact on a timely basis and did not reconcile receipts to deposits.  Numerous personal checks or loan checks of the former Recorder were included with deposits/transmittals.   Accounts receivable records were not adequate, and numerous daily abstracts and receipt slips were not available from 2005 and 2004.  Recommendations related to controls over cash in the Recorder's office have been made by the county's independent auditor the past several years, but most of these recommendations were not implemented, allowing missing money to go undetected.

 

Questionable expenditures have been made from the Recorder User Fee Fund. During 2005 and 2004, the former Recorder authorized payments for attorney fees totaling $18,236 and $4,088, respectively related to a lawsuit filed by the former Recorder and County Auditor against the county related to employees salaries.  In addition, supporting documentation was not available for some purchases made from the Recorder User Fee Fund and contracts were either not entered into for some services obtained or were not retained.

 

 

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Missouri State Auditor's Office
moaudit@auditor.mo.gov