Report No. 2007-04

February 2007

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every four years in counties, such as Ozark, 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 the Missouri Constitution.

• Improvement is needed in the county's compliance with requirements relating to federal assistance programs.  The county did not solicit bids or obtain documentation of compliance with prevailing wage laws from a contractor paid $21,930 with federal emergency assistance (FEMA) funds.  Additionally, adequate cash management procedures relating to the BRO federal project monies have not been established to ensure the minimum time lapses between receipt of federal project monies and the disbursement of such monies to contractors.  One payment totaling $62,843 was held for more than seven days.  Further, the county does not have adequate procedures in place to track the various federal awards for the preparation of the schedule of expenditures of federal awards (SEFA).  The county prepared a SEFA for the years ended December 31, 2005 and 2004; however, it contained numerous errors and omissions.

• The county did not always solicit bids or maintain documentation of price comparison procedures for major purchases such as bulk fuel, tires, and prisoner food.  Additionally, improvement is needed in the controls and procedures over fuel usage, and mileage logs are not maintained on some county road and bridge vehicles.  The county does not always obtain written agreements for services provided and adequate documentation was not obtained for some expenditures relating to the Emergency Shelter Grant Program.  The county commission meeting minutes did not adequately document circumstances regarding related party transactions.

• Centralized leave records are not maintained by the County Clerk for the Sheriff's office employees.  Additionally, the county provided some employee benefits to an individual paid to haul gravel; however, no payroll taxes were withheld from his compensation.  The county needs to ensure it complies with IRS regulations regarding independent contractors and employees.

• The County Treasurer's annual salary was increased effective January 1, 2004 during his term of office, which began January 1, 2003.  The Prosecuting Attorney issued a written opinion in January 2004 indicating the County Treasurer's salary should be set at 90% of the maximum allowed under House Bill 2137, which was effective August 28, 2002.  However, without salary commission approval and because the salary increase occurred during the County Treasurer's term of office, it is unclear when the salary increase provided to the County Treasurer should have been in effect, and whether it is in accordance with state law.

• The County Commission and other county officials approved disbursements in excess of budgeted amounts for various funds for the years ended December 31, 2005 and 2004.  Additionally, the county budget document contained some inconsistent classification of receipts and transfers. 

• The County Treasurer does not have adequate procedures to monitor and ensure bank accounts are sufficiently collateralized.  The Treasurer's deposits were under collateralized during January 2006 and January 2005, respectively, when he received and distributed most of the school property tax money.

• The Prosecuting Attorney's controls and procedures to account for monies received for the payment of bad checks needs improvement.  Additionally, the Prosecuting Attorney's approval of bad check fee waivers is not adequately documented, and an adequate system to track all bad checks received has not been established.

• Improvement is needed in the controls and procedures over Health Center expenditures.  Interest earned was not accurately presented in the budgets, actual expenditures exceeded budget amounts, and expenditure detail by vendor was not presented in the annual published financial statements.  Additionally, the board minutes did not always adequately document topics discussed during the board meetings, and the Health Center's asset records need improvement. 

Also included in the audit are recommendations related to the County Treasurer's bond, an annual maintenance plan for county roads and bridges, and capital assets.  The audit also suggested improvements in the procedures of the Sheriff and County Clerk.

Complete Audit Report