Office of the State Auditor of Missouri
March 23, 1999
Report No. 99-17
Some problems were discovered as a result of an audit conducted by our office in response to the request of petitioners from Cainsville, Missouri.
NOTE: Recommendations as well as responses from the city which correspond with the findings are included in the audit.
During our review of the city's published financial statements, we discovered the city had not published semiannual financial statements as required by law. Prior to 1997, it appears no financial statements were published by the city. The city did publish a financial statement for 1997; however, that statement covered the entire year and did not include the city's indebtedness. State law requires the board of aldermen to prepare and publish semiannual financial statements. The law states that a city cannot legally disburse funds until these financial statements are published. Not only are these financial statements necessary to meet statutory requirements, they provide information to citizens regarding the operations and financial condition of their city government and how their tax dollars are being spent.
The City of Cainsville does not have a formal bidding policy. As a result, the decision of whether to solicit bids for a particular purchase is made on an item-by-item basis. Although it appears the city did solicit bids for some purchases, we noted instances where bids were either not solicited or bid documentation was not kept. Examples include $5,222 for gravel, $5,043 for insurance, and $1,053 for a lawn mower. Formal bidding procedures for major purchases provide a framework for economical management of city resources and help ensure the city receives fair value by contracting with the lowest and best bidders. Competitive bidding also helps ensure all parties are given an opportunity to participate in the city's business.
The city's property tax rate has exceeded the maximum authorized by state statute. Public hearings have not been held prior to establishing property tax rates, and the board did not establish annual tax rates by ordinance. No independent verification of the tax books is performed. Furthermore, the city collector does not prepare an annual report of taxes collected or a list of delinquent taxes, and that official is not bonded.
The board of aldermen has not appointed an individual to serve as city treasurer, and there is no independent review or supervision of the work performed by the city clerk.