Report No. 2008-19
March 2008
Complete Audit Report

The following findings were included in our audit report on the Village of Phillipsburg, Missouri.

The Village of Phillipsburg operates a sewer system that provides service to approximately 100 customers with sewer system operating revenues in excess of $30,000 annually. Many significant problems were identified in the control procedures related to the sewer system. The village does not perform adequate monthly reconciliations of total amounts billed, payments received, and amounts unpaid. Ledger cards for each customer were maintained in an unorganized manner. An independent approval of adjustments made to customer accounts is not always performed, controls over sewer deposits are in need of improvement, and there is not adequate segregation of duties related to the village's sewer system. The village also has not performed a formal review of the sewer rates for several years.

The village's budgets were not complete, and actual expenditures exceeded budgeted expenditures for the General Fund and the Sewer Operating Fund for the year ended December 31, 2006. In addition, the budgets for the years ended December 31, 2007 and December 31, 2006 were not approved until July 23, 2007 and March 21, 2006, respectively. The village's published semi-annual financial statements for the six months ended June 30, 2007 were incomplete and the annual financial report to the State Auditor's Office for 2006 did not contain all required information.

The village does not have a formal bidding policy. During the year ended December 31, 2006, bids were either not solicited or bid documentation was not retained in some instances. In addition, the village did not always enter into written contracts defining services to be provided and benefits to be received. Further, vendor invoices or other supporting documentation were not retained for some village expenditures.

Improvement is needed in the handling of closed meetings. Also, minutes from both open and closed meetings did not always include sufficient detail of matters discussed.

Also, included in the audit report are recommendations related to accounting controls and procedures, untimely audits, restricted revenues, and capital assets.

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