Auditor Seal

Susan Montee, CPA
Missouri State Auditor

YELLOW SHEET


Report No. 2007-21

May 2007


The following findings were included in our audit report on the City of Lake Ozark, Missouri.


Many of the findings in this audit are similar to those included in our previous audit of the City of Lake Ozark (Report No. 2000-115).  The city has made very little progress to improve accountability over city resources.

 

From 2004 to 2005 the City of Lake Ozark's overall financial liability increased approximately 43 percent, and was used to refinance past debt and finance both expansion of the city's water and sewer system and the Osage National Neighborhood Improvement District (NID) project.  The city also entered into a $5.6 million lease purchase agreement without soliciting proposals from various entities.  In addition, the city issued revenue bonds in 2002 which require the establishment of several separate accounts and funding of these accounts with transfers from water operating revenues.  However, the city does not have sufficient cash in the Water Funds to meet and fund these required accounts.  Also, no formal plans were prepared by the city for the purchase and development of land for a city park or to fund the transportation enhancement (strip) project with costs of approximately $619,000 in engineering and construction.

 

The City of Lake Ozark has established five NIDs totaling approximately $2.8 million.  Our review of these projects noted:

 

 

The city has not established procedures to ensure expenditures are properly allocated among the funds and to ensure restricted revenues are expended only for their intended purpose.  For example, the city made transfers from the Transportation, Sewer, and Water Funds to the General fund to cover various administrative expenses, including salaries, but had no documentation to support these allocations. 

 

Inadequate controls and oversight over the collection of various licenses and permits resulted in $1,265 of missing monies to go undetected.  Amounts recorded on receipt slips and other documents did not agree to the amounts recorded on deposit summary reports and deposit slips prepared by the accounting clerk.  If these items had been reviewed by another person, these discrepancies may have been detected.

 

Significant weaknesses were identified concerning the city's handling of receipts including lack of receipt slips, untimely posting of receipts, and untimely deposits.  The city has accumulated large balances in due to/from accounts, and wrote off some of these balances in 2004 without adequate supporting documentation.  

 

Financial statements prepared and published by the city were incomplete and inaccurate, some financial statements were not published, and improvements are needed in preparation of the city's budgets.

 

The city's bidding procedures are in need of improvement.  The city did not solicit proposals for  some professional services, and entered into a long term contract for residential and commercial trash services without knowing the value of the contract.

 

Improvement is needed in city procedures for reviewing and approving invoices for payment.  Some city expenditures did not appear to be a prudent use of public funds and some employees were paid bonuses.  Inadequate recordkeeping allowed duplicate and untimely payments of some invoices to be made.

 

Many significant problems were identified in the control procedures used by the municipal court to account for court receipts including inadequate segregation of duties, improper accounting for bond forms and police department receipts, untimely collection of bond and police department monies, and untimely deposits.  Most of these conditions have been addressed to the court numerous times, but the court has repeatedly failed to take any corrective action.

 

Also included in the report are recommendations related to cell phones and credit cards, official and employee benefits/vehicles and equipment, payroll, utility system controls and procedures, property tax procedures, closed meetings and ordinances, capital assets, and evidence and seized property controls.

 

Complete Audit Report


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