Report No. 2008-50
August 2008
Complete Audit Report
The following findings were included in our audit report on the City of Wellington, Missouri.
There are numerous weaknesses in the city of Wellington's accounting controls, records, and procedures. An independent review of the City Clerk's activities is not performed, separate funds are not maintained for the utility operations, adequate documentation is not maintained for some expenses, and a fund and/or accounting for law enforcement training (LET) fees has not been established. In addition, the city should consider consolidating its bank accounts and certificates of deposit and bid its bank services.
During the year ended June 30, 2007, the City Collector collected property taxes and utility payments totaling over $27,000 and $216,000, respectively. There is no independent review of the collector's activities; an account book is not maintained; the board does not approve all additions/deletions to the tax records; the method of payment is not always recorded on the city's copy of tax statements; and reports regarding tax collections and delinquent tax lists are not prepared.
Budgets are not prepared and semi-annual financial statements are not published as required by state law. The official budgets are not always updated to reflect budget amendments or retained, and monthly budget to actual reports are not retained. Also, the city does not prepare an annual maintenance plan for city streets.
Although monthly reports comparing amounts billed, collected, and delinquencies are generated from the computerized utility system, the reports are not reconciled to each other, to bank deposits, or to the City Collector's receipt record. Thus, discrepancies are not investigated and resolved. In March 2008, the City Clerk reviewed deposits for water to determine if the deposits were held on closed accounts, refunded, or transferred to an open account for the same customer. Records show water deposits totaling $17,770, including an additional $3,000 recorded twice for the same customers and $1,000 which may have been refunded. The computerized utility records showed a deposit total of $21,770. It also appears the city is not properly applying the delinquent payment penalty in compliance with its water regulations.
The city is over-funding the debt service account for its Combined Waterworks/Sewerage System revenue bonds. According to the bond covenant, the debt service account is to be funded up to the total needed for one year's principal and interest.
The city does not have formal written bidding and purchasing policies. As a result, the decision of whether to solicit bids for a particular purchase is made on an item-by-item basis. According to the City Clerk, the city frequently obtains proposals or quotes in writing or over the telephone; however, these proposals/quotes are not always retained.
During the period July 2006 to December 2007, bids were either not solicited and/or bid documentation was not retained for the following: $62,575 for paving, $2,195 for fencing, $3,683 for a salt and sand spreader, $56,823 for water and sewer repairs, and at least $2,430 for rock. Additionally, supporting documentation for the city's charge cards is not always adequate and not all disbursements are reviewed and approved by the board.
Also included in the audit report are recommendations related to professional services and contracts, board minutes, meetings and ordinances, payroll and personnel issues, and capital assets.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
