YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2006-55

September 2006

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Douglas, that do not have a county auditor.  In addition to a financial 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.

• The county's financial condition is expected to deteriorate based upon 2006 budget projections.  Because of increasing costs and stagnant or decreasing revenues, the General Revenue Fund's and the Special Road and Bridge Fund's estimated cash balances at December 31, 2006 are projected to decrease significantly.  While the County Commission has ordered a hiring freeze on county employees, eliminated four Sheriff Department personnel and cut other expenses, these cuts have not kept pace with the expected decrease in receipts. Additionally, some expenses, such as employee health insurance and fuel costs, have increased.  The County Commission does not expect the financial position of the county to improve significantly, and has approved placing two sales tax issues on the ballot in November.

• The Douglas County Assistant Prosecuting Attorney performs work related to child support enforcement (CSE) activities, and the county is reimbursed all of his $20,440 annual salary through the Missouri Department of Social Services Title IV-D.  Time sheets prepared by the Assistant Prosecutor reflected only seven hours were worked during July 2005, computing to an hourly rate of $243, or an average of only 12 hours worked per month at $140 per hour for all of 2005. Although the county breaks even under the current arrangement, county officials should take steps to ensure public funds from all sources are spent reasonably and efficiently.

• The 44^th Judicial Circuit Drug Court, consisting of Wright, Douglas, and Ozark counties, has not adequately evaluated the costs associated with the drug court program.  A $480,134 grant from the U.S. Department of Justice, along with state and local monies have funded the $938,962 cost to operate this program during the last four years.  Our review of the drug court identified instances where grant funds were spent for some expenses that are no longer being incurred.  Examples include $70,075 in compensation paid to prosecuting and defense attorneys, and $41,938 in compensation paid to individuals to track drug court participants. These services are now being obtained at no cost to the drug court since federal grant funds have been exhausted.  Additionally, the cost charged to participants has increased from $100 to $600 with no documented cost analysis to justify how the fee amount was determined.  Because drug court officials do not adequately analyze the various costs associated with operating this program, they cannot ensure all federal, state and local funds provided to the drug court are utilized effectively and efficiently.

• Compensatory balances for the Sheriff Department employees were not calculated correctly resulting in the county owing approximately $10,787 in compensatory time to past employees.

• The county has not adopted formal policies and procedures for the use of the twenty-seven credit cards for five different vendors currently held by the county officials and employees.  Additionally, the County Commission did not always document their review and approval of expenses, and the county did not obtain adequate documentation to support $73,530 paid to a local retailer for costs related to public improvements.

• Confidential passwords to limit access to the various property tax system files are not utilized, and interest and penalties on delinquent personal property taxes were waived by the County Collector without obtaining approval by the County Commission.

• Inventory records accounting for county assets need improved, and logs are not maintained to account for the fuel used from the county's gasoline and diesel fuel tanks.

• The Public Administrator did not prepare and file annual settlements with the court, perform bank reconciliations, or maintain accounting records for over five years for one ward with a bank balance of approximately $35,384.  Additionally, annual settlements filed by the Public Administrator for another ward contained errors.

Also included in the audit are recommendations related to county officials bonds, budgets, and published financial statements.  The audit also suggested improvements in the procedures of the Prosecuting Attorney, County Collector, Sheriff, and Support the Handicapped Board.

Complete Audit Report