YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

March 31, 1999
Report No. 99-22

Some problems were discovered as a result of an audit conducted by our office in response to the request of petitioners from Jasper, Missouri.

NOTE: Recommendations, as well as responses from the city, which correspond with the findings below are included in the audit.

Procedures have not been established to ensure expenditures are properly allocated among the various funds benefitting from the expenditures and to ensure restricted revenues are expended only for their intended purposes.

The city pays wage and fringe benefit expenses from both the water and sewer fund and the general fund. However, these expenses are not consistently allocated and no documentation is available to support the method of allocation used.

It is essential that the city properly allocate expenses to the various funds. In December 1998, the board authorized an increase in water and sewer rates. Allocation of expenses is necessary for the city to ensure the water and sewer rates are sufficient to cover the cost of providing the service without generating profits to subsidize other city services. Furthermore, the uses of certain funds, such as capital improvements and transportation sales taxes and state motor vehicle-related revenues, are limited by state law for specified purposes.

In 1997, the city began developing a sports complex facility; however, it appears the city has not performed adequate planning for the project or sufficiently documented actions taken. The city should review the sports complex design and estimate the total cost of the facility to ensure the project is financially feasible. In addition, the city should ensure adequate planning is performed and documented for future developments to ensure financial feasibility, facilitate the projects, and help anticipate problems. Documentation of the planning process is essential in informing citizens and further helps in avoiding confusion and misunderstandings.

The city should also prepare formal annual plans for maintenance and improvement of city streets and sidewalks.

In regard to accounting procedures and controls, we found that duties are not adequately segregated, receipts are not deposited intact, and the composition of receipts is not reconciled to the composition of deposits. Board approval of disbursements is not adequately documented. An independent appraisal was not obtained for a purchase of real property. The Mayor co-signs checks but is not bonded. The city should consider reducing the number of bank accounts maintained. Annual reports of property tax collections and delinquent taxes are not prepared as required by law.

Budgets did not include some information required by state law and were not formally adopted prior to the beginning of each year. Published financial statements did not reflect some financial activity and indebtedness of the city.

Discrepancies concerning the city boundaries have not been resolved. We recommend the Board of Aldermen review the discrepancies regarding the city limits and seek legal counsel regarding any action that should be taken. The resolution of the matter should be sufficiently documented.

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