Report No. 2009-101
September 2009
Complete Audit Report

An audit was conducted by our office of the City of Tracy.

The city has not established sufficient records within its general accounting system to properly account for the financial activity of the various city funds. The city does not maintain separate records of receipts, disbursements, and fund balances for its General, Special Revenue, or Water and Sewer Funds. As a result, city officials are not able to adequately monitor the city's financial activity.

The city's budgets were not approved in a timely manner and were incomplete. In addition, the Board has not developed a process to monitor budget to actual disbursement activity. As a result, actual disbursements significantly exceeded budgeted amounts. Financial reports prepared by the city are incomplete and lack an appropriate level of detail. The city's published semi-annual financial statement for the 6 months ended December 31, 2008, reported a combined net income of all city operations, with receipts and disbursements of each fund co-mingled. Additionally, the published financial statements did not report a beginning or ending balance for any city funds. The city maintains four bank accounts that have minimal activity. In addition, the City Treasurer does not allocate interest received from bank deposits in the general account to the various city funds maintained in the account.

The Board of Aldermen does not provide adequate oversight of the accounting functions performed by the City Clerk and Treasurer and review procedures implemented do not always detect errors as intended. Additionally, receipting and reconciling procedures need improvement.

Water and sewer rates charged to customers have been insufficient to cover water and sewer operations. As a result, the city's General Fund has paid approximately $42,700 on behalf of the Water and Sewer Fund through December 31, 2008, according to the city's financial statement audit report.

Other issues discussed in the audit include the lack of a formal bidding policy for purchases of goods and services, the lack of controls to ensure fuel purchases for law enforcement are reasonable, issues with closed meeting procedures, and concerns related to city ordinances and capital asset tracking.

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