Report No. 2011-02
January 2011
Complete Audit Report

Findings in the audit of Shannon County

Financial Condition
As noted in our prior audits, the financial condition of the General Revenue Fund has remained weak, and the financial condition of the Special Road and Bridge Fund has declined. Also, $202,598 is still due to the Special Road and Bridge Fund from the General Revenue Fund for excess administrative transfers and incorrect payment of payroll taxes from prior years. The county has not developed a repayment plan and has made no payments toward this inter-fund liability since August 2006. Because of the poor financial condition of the General Revenue Fund, the County Commission did not appropriate sufficient monies for emergency purposes in the 2010 General Revenue Fund budget as required by state law.

Disbursements
Several concerns were noted regarding county efforts to establish a quarry and the related disbursements of approximately $250,000 since 2007. There was no evidence an adequate cost/benefit analysis was performed prior to spending money to establish the quarry, and the quarry is still not operational. The county did not obtain an appraisal for land purchased for $31,675 in 2007 to be used as the quarry site. The county entered into an agreement to purchase a rock crusher for $215,000 in 2007, and paid this amount in three installments; however, as of December 2010, the county has not received delivery of the crusher. In addition, the County Commission and County Clerk need to improve disbursement review procedures to ensure all county disbursements are proper and adequately documented.

Payroll and Related Matters
Some employees do not prepare timesheets, some timesheets are not provided to the County Clerk's office, and some timesheet information is based on estimated hours worked. Overtime and compensatory time policies are not adequate and do not appear to comply with the Fair Labor Standards Act of 1938 (FLSA). The county accrues straight time off (compensatory time) to employees who work more than the county's normal 40-hour work period, although the FLSA requires compensatory time to be accrued at time and one-half.

Fuel and Vehicle Use
The county has not established effective monitoring procedures regarding fuel use. Mileage and fuel use logs are not maintained for county vehicles and equipment, and fuel use is not reviewed or reconciled to fuel purchases. The personal commuting use of county trucks by county road and bridge employees is not reported to the Internal Revenue Service.

Capital Assets
As noted in previous audits, procedures and records to account for county property are not adequate. The county has no procedure in place to identify capital asset purchases and dispositions throughout the year. County property records only include road and bridge and Sheriff vehicles and equipment, as well as some Local Emergency Planning Committee equipment. In addition, property is not tagged for specific identification and annual physical inventories are not performed.

Property Tax System
The County Clerk does not maintain an adequate account book or other records summarizing all property tax transactions. In addition, there is inadequate documentation of reconciliations between the property tax additions and abatements approved by the County Commission and the related changes made to the property tax system by the County Collector.

County Collector's Controls and Procedures
The County Collector has not prepared annual settlements of property tax transactions since taking office on March 1, 2007. The County Collector does not adequately reconcile daily and monthly tax abstract totals to monthly settlements, and as a result, the monthly settlements were not always accurate. As of June 30, 2010, $51,813 remained in the former County Collector's bank account which represents monies collected prior to February 28, 2007. The County Collector does not always disburse monies on a timely basis. The County Collector does not compare reconciled bank account balances to liabilities, and at February 28, 2010, the liabilities exceeded the reconciled bank balance by $4,127. The County Collector does not properly assess some delinquent tax fees.

Prosecuting Attorney's Controls and Procedures
The duties of receiving, recording, depositing, and disbursing monies, and reconciling the Prosecuting Attorney's bank account are not adequately segregated. The Prosecuting Attorney's office does not have procedures to ensure all monies received are disbursed. Bank reconciliations are not documented and unidentified amounts have accumulated in the bank account. In addition, deposits are normally made only once a month.

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