Report No. 2010-07
January 2010
Complete Audit Report
The following findings were included in our audit report on the Platte County Public Water Supply District #6.
The district has not performed a formal review of water rates for several years. The district increased water rates 15 percent in February 2009 and 20 percent in December 2007. There is only limited documentation to support the February 2009 rate increase, and there is no documentation to support the Board's decisions or justification for the December 2007 rate increase. At April 30, 2009, the district had a cash balance of approximately $890,000. This balance was not taken into consideration when setting rates and a formal capital improvement plan had not been developed. While two different studies have been performed detailing improvements to the system and water tower, few of these improvements have actually been performed. In addition, monthly reconciliations of total billings, payments received, and amounts remaining unpaid for water services are not performed and water services are not always shut off in accordance with district policy when customer accounts are delinquent.
The district does not have a formal procurement policy. Several disbursements were made without soliciting competitive bids or proposals including: water line maintenance ($11,005), legal fees ($4,951), water tank evaluation ($4,951) and lawn mowing and snow removal ($3,192). Additionally, in December 2008, a capital improvement project costing approximately $5,300 was awarded to the same contractor who has the maintenance contract with the district. The work was billed to the district at the same hourly rate for labor and equipment usage as for regular maintenance, rather than determining the scope of the project and bidding or requesting proposals for a contract price.
Adequate reviews of employees' daily attendance records were not always performed by the former District Manager or the Board and the former District Manager received an in district travel allowance in addition to being reimbursed for actual miles driven while performing water district business. In addition to the annual mileage allowance of $240, the former District Manager received approximately $895 for mileage reimbursements incurred during the normal course of business during 2008. The former District Manager also cleaned the office for additional compensation and the income was not reported on her W-2 form and was not subject to tax withholdings. Bonuses were paid to office staff in December 2008 and 2007 totaling $1,000 and the district did not prepare IRS Forms 1099 for two vendors in 2008.
The district needs to improve its procedures for preparing minutes and documenting matters discussed in meetings. Board meeting minutes are signed by the preparer but are not signed by the Board President to indicate approval, and meeting minutes did not always contain sufficient detail of matters discussed and actions taken. The water district has adopted a policy regarding public access to water district records; however, the policy states that 15 cents is to be charged for each page copied, which does not comply with state law. Additionally, reasons cited in open meeting minutes for closing meetings are not always the actual topics discussed in closed session.
District procedures related to processing receipts and bank reconciliations are in need of improvement. Cash custody and recordkeeping duties have not been adequately segregated, monies received are not always deposited intact or in a timely manner, and checks are not restrictively endorsed immediately upon receipt. In addition, the district has not established procedures to routinely follow up on outstanding reconciling items included on the bank reconciliations.
While budgets are prepared and adopted, they do not contain all elements required by state law and are not adopted prior to the beginning of the fiscal year.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
