Report No. 2009-41
May 2009
Complete Audit Report

The following findings were included in our audit report on the city of Rolla.

The city needs to develop a plan to address the financial impact to the city's Centre and SplashZone operations when the park sales tax revenue ends in 2013. Without the sales tax monies these facilities would have operated at a loss for three of the past five years.

The administrative fee charged various city funds is not based on actual administrative costs or other documented rationale. In addition, the city has not documented the administrative costs for collecting the tourism tax and does not take adequate steps to ensure all applicable taxes are collected. The city collected tourism tax totaling over $520,000 in fiscal years 2006 and 2007, but did not examine or inspect the books and records of the hotels and motels to ensure the amounts paid were accurate.

The City Council does not document how some items discussed in closed meetings comply with the Sunshine Law. Sometimes the council discussed issues other than the specific reasons for going into a closed meeting and closed meeting minutes did not always include sufficient detail of matters discussed. The vote taken in closed meetings is not properly made available to the public. Also, the city does not maintain a log of public requests to ensure all requests are handled in compliance with the Sunshine Law.

The city's payment of $750 to each full-time employee in October 2008 may violate the Missouri Constitution. Some expenditures do not appear to be prudent, reasonable, or necessary uses of city funds, such as an annual safety awards banquet for all employees and their spouses and a police department annual awards banquet for department personnel and their spouses.

Capital asset acquisitions and dispositions are not accounted for as they occur. The city does not have a written vehicle policy for effective monitoring procedures regarding vehicle use and fuel and usage logs are not maintained.

The Rolla Municipal Utilities (RMU) needs to evaluate its relationship with the Missouri Joint Municipal Electric Utility Commission (MJMEUC) to determine proper disclosures about the relationship in the RMU and city financial statements.

The RMU does not have documentation to support and justify the amount charged to the city for billing/collecting the city's sewer and refuse fees. In addition, the RMU has not developed criteria and methodology for determining the adequacy of water rates, does not periodically review and evaluate the service availability fees for either its electric or water services, and has not established adequate policies and procedures to properly allocate some expenses between the Electric and Water Funds.

The RMU needs to improve its policies and procedures related to closed meetings. Minutes were not always maintained of closed meetings, the specific reasons for a closed meeting were not documented, sufficient detail of matters discussed and action taken was not always documented, and the vote taken is not properly made available to the public. Also, the public records policy and procedures need to be improved.

The RMU purchasing policy needs to be improved. The policy is limited and only provides for competitive bid/quotations for purchases greater than $1,500. Plus, purchases greater than $10,000 are approved by the board and purchases less than $10,000 are approved by the general manager, operations manager, or business manager. There is no oversight over the general manager's expenses, such as his expense account or other travel related expenses.

The RMU has not established a formal salary schedule for its employees. The board approves new employees' salaries and subsequent increases; however, a formal analysis of RMU compensation to local/regional market standards has not been conducted. The RMU does not have a nepotism policy which addresses related employee issues. The RMU does not maintain a list of related employees, and employment applications do not disclose relatives already employed by the RMU.

The RMU does not have a written vehicle policy to communicate to employees the proper use of the RMU vehicles, and fuel and usage logs are not maintained. The commuting use of vehicles by employees is not reported to the IRS.

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