Report No. 2011-09
March 2011
Complete Report
Findings in the audit of the Village of Indian Point

Sewer Project
The Board of Trustees is not adequately monitoring the Board of Public Works (BPW). The sewer project was poorly planned and system revenues are not sufficient to meet all operational costs. The village spent over $8,000 on wireless meters which it cannot utilize because it has not purchased the equipment necessary to do so; it has no valid estimate of how much it will cost for waste removal; and deficiencies identified by the Missouri Department of Natural Resources are expected to cost approximately $100,000 to remedy. Approximately $120,000 in change orders were approved by the BPW without the approval of the Board of Trustees. The 2010 budget for the BPW reflected an estimated negative cash balance of $99,000 at December 31, 2010, as system revenues are not sufficient to meet all operational costs. Sewer rates have not been reviewed since 2005. Adequate documentation of disbursements, warranties, performance bonds and contracts was not maintained.

Municipal Center
The Municipal Center project and corresponding debt issuance was not properly planned. The village paid $49,762 in principal and interest before breaking ground on the project. In addition, the village had funds available at the time that may have been utilized for the project. Because the debt cannot be prepaid until 2017, this financing arrangement will result in interest costs totaling approximately $185,000.

Village Disbursements
The village does not have a formal bidding policy, and some bid documentation was not retained. In addition, some products and services were not bid. The village used the same engineering firm for several years without documentation of any evaluation and consideration of other firms. Disbursement approval is not adequately documented.

Accounting Controls and Procedures
Accounting duties are not segregated, and insufficient oversight exists to ensure transactions are properly recorded and assets are safeguarded. Monies received are not recorded and deposited promptly, and receipt slips are not accounted for properly. Village financial records are not accurate, with some disbursements not listed or misclassified. Bank reconciliations are not performed timely, and some important records were not properly retained.

Board of Public Works Utility Controls and Procedures
Significant weaknesses were identified in controls and procedures related to the utility system, and as a result, there is less assurance all utility monies have been accounted for properly. Accounting duties are not segregated, monies received are not promptly recorded and deposited, and checks are not securely maintained. Bank reconciliations are not performed timely, and adjustments to accounts are not properly authorized or documented. Formal policies and procedures related to delayed sewer payments have not been established, and village ordinances requiring penalties and service shutoff have not been enforced with respect to delinquent customers, including the Village Board Chairman and the BPW Chairman.

Payroll Controls and Procedures
Timesheets are not always signed by employees and supervisors, and adequate records of vacation, sick and compensatory leave are not maintained. Christmas bonuses paid to the Chief of Police and a police officer, and $1,000 paid to the Chief of Police for duties as interim village administrator were not properly reported or subjected to payroll tax withholdings. No documentation was maintained of how the $1,000 payment was determined.

Audits, Budgets, and Financial Statements
The village did not obtain a required annual audit of the sewer system or publish semiannual financial statements as required by state law. Budgets did not include all information required by state law and contained errors. The BPW budgeted a deficit balance.

Meetings and Records
Meeting minutes lacked sufficient detail and were difficult to locate. Email was used for some votes, in violation of state law requiring that a quorum of Board members be physically present during a vote.

Elected Officials
A Board of Trustees member voted to appoint his wife to the BPW, and a candidate was listed on the ballot for the Board of Trustees even though his sewer account was in arrears at the time.

Capital Assets
The village does not maintain records for its capital assets. Property is not tagged for identification, and an annual physical inventory is not performed, making it difficult to determine proper insurance coverage and safeguard village assets from loss, theft, or misuse.

In the areas audited, the overall performance of this entity was Poor.*

American Recovery and Reinvestment Act of 2009 (Federal Stimulus)
The Village of Indian Point did not receive any federal stimulus monies during the audited time period.

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