Report No. 2009-58
Complete Audit Report
The following findings were included in our audit report on the city of Olympian Village.
The city of Olympian Village is in poor financial condition resulting from the failure of the board to monitor and provide guidance and controls necessary to ensure the continuing operations of the city. Due to inadequate cash balances, the city has paid bills from whichever funds had monies available and has used restricted monies for general operations of the city. Also, the city has not properly funded the sewer repair and replacement accounts and has accumulated substantial debt including $14,900 in payroll taxes and $48,650 due to various vendors. Inadequate records and procedures have inhibited the board’s ability to effectively monitor and manage the city. These weaknesses include the absence of budgets and financial statements, the lack of bank reconciliations, and the lack of planning and monitoring of the city's sewer system. A similar financial condition was noted in our prior report dated June 8, 2000.
The city does not have formal written agreements with several companies or individuals providing services. Also, the city does not have a formal bidding policy. Several checks totaling over $6,000 were made payable to cash or the bank. The former Mayor cashed $1,279 of these checks and no supporting documentation could be located related to the disposition of these monies. In addition, detailed documentation was not retained or could not be located for some disbursements reviewed totaling approximately $25,100. Board approval of recurring bills paid is not documented. Several disbursements totaling over $3,600 did not appear to be prudent and necessary uses of public funds, including a barbecue grill, dog food and a feeding pan, soda and candy bars, a Christmas rug. and a rare image sapphire. A current board member indicated the city is not in possession of the items nor would these items have been used by the city. The city has not established procedures to ensure Forms 1099 are filed with the Internal Revenue Service when required.
Several control weaknesses were noted concerning receipts. Duties related to receipts are not adequately segregated. Sewer monies received are not deposited on a timely basis. Receipt slips are not issued for franchise tax payments and some sewer payments. A receipt report is not generated from the city's sewer system and reconciled to amounts deposited. The city does not maintain a control ledger to account for total billings and payments received each month and, as a result, monthly reconciliations of total billings, payments received, and amounts remaining unpaid are not performed. The board does not compare the list of delinquent sewer accounts to the accounts receivable report each month. In addition, it appears the city did not charge the appropriate fees for the construction of two apartment buildings in May and June 2006.
The city does not properly report wages, withhold payroll taxes, or pay the employer's share of Social Security and Medicare taxes for compensation paid to the City Collector/Court Clerk, Municipal Judge, and Prosecuting Attorney. Police officers were paid a monthly mileage allowance for commuting to and from the city in their personnel cars in lieu of a salary. There was no documentation indicating these allowances were authorized or how the varying amounts paid to each officer were determined. In addition, the payments were not properly reported as compensation for tax purposes. The city does not maintain payroll registers listing gross wages, payroll taxes withheld, net pay, and year-to-date totals for each employee. The city does not have a comprehensive employee manual. Records of vacation or sick leave earned and taken and accumulated balances were not maintained or could not be located. The former City Clerk was overpaid approximately $2,000 and $2,100 for the years ended December 31, 2007 and 2006, respectively, and was paid approximately $3,000 for overtime in 2007. Time sheets were not prepared or could not be located and the board did not approve payroll transactions.
The city does not maintain property records to account for capital assets owned by the city or conduct physical inventories. The city sold several parcels of property without publicizing the sale, obtaining current appraisals, or soliciting bids. The city does not maintain mileage/usage or maintenance logs for vehicles and equipment owned by the city. In addition, a review of vendor statements and charge receipts for 2006 and 2007 indicated several purchases of fuel at gas stations located several miles from the city limits.
The city has not established a separate accounting for road taxes, motor vehicle-related receipts, law enforcement training fees, and sewer fees. In addition, transfers are not properly tracked and documented.
Compensation paid to city employees and some officials is not set by ordinance. The city has not adopted a policy regarding public access to city records, and some board minutes did not include sufficient detail of matters discussed and actions taken. It is not clear if the Board of Aldermen properly followed state law for impeachment proceedings when it voted to terminate an alderman at the November 8, 2007, meeting. There was no documentation or cause shown for the dismissal or that the alderman had been given the opportunity to be heard as required by the impeachment process.
Complete Audit Report
Missouri State Auditor's Office