YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2006-80
December 2006

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Osage, 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 General Revenue Fund continues to be in a weak financial condition as the cash balance has declined.  The cash balance decreased from $218,410 at January 1, 2004 to $75,513 at December 31, 2005.  The 2006 General Revenue Fund budget reflects an estimated cash balance of less than $26,000 at December 31, 2006.  The General Revenue Fund cannot continue to spend more than is received.  The County Commission should continue to monitor the activity of the General Revenue Fund to ensure sufficient monies are available to fund county operations.

A formal cost analysis to account for costs associated with the purchase, renovations, and upkeep of the Knoerr Building has not been prepared.  In June 2004, a lease purchase agreement totaling $200,000 was entered into to purchase the Knoerr Building.  Due to the county’s weak financial condition, the agreement has been extended each year until the current extension to August 2007.  Costs of $29,000 have been incurred by the county for interest, asbestos removal costs, etc.  In addition, in February 2005, the county received a price quote of $240,000 regarding renovating the building.  It is unclear how the county anticipated being able to purchase this building.  A cost analysis should be performed to determine if the county can afford the building, pay any renovation costs, and pay for normal routine maintenance costs.

Formal budgets were not prepared for various county funds, and amendments were not filed with the State Auditor’s office and were not always indicated on formal budgets, resulting in some deficit fund balances.

Problems with county personnel records and procedures have been noted in past audit reports; however, little or no improvement has been made and similar problems still exist. Time sheets are not submitted by some employees, the County Commission has not established written personnel policies regarding compensatory time and overtime for the Sheriff’s Department employees, and the personnel manual has not been updated since 1991.

Capital asset records and procedures need improvement and vehicle usage logs were not maintained.

Monies received from the Missouri Department of Transportation for bridge replacement and rehabilitation expenditures under the Highway Planning and Construction Program are not disbursed within two days of receipt to contractors as required.

In the County Clerk’s office, cash handling and receipts procedures are not adequate.  Receipt slips are not issued for some monies received, the receipts ledger is not updated as monies are received, the method of payment is not always indicated on the receipt slips or receipts ledger, and monies received are not transmitted to the County Treasurer on a timely basis.  Records were not sufficient to account for over one-third (404) of the plat books purchased by the county.

In the Associate Court’s office, receipts were not deposited in a timely manner.  This office has now been combined with the Circuit Court.

In the Sheriff’s office, problems with records and procedures have been noted in past audit reports; however, little or no improvement has been made and similar problems still exist.  Bank reconciliations are not documented and an open items listing is not prepared.  Checks have been outstanding for a considerable amount of time, and monies are not deposited in a timely manner.  In addition, adequate control over seized property has not been established, and the procedures related to monitoring of unpaid accrued costs from civil paper service are not adequate.

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