YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

June 28, 1999
Report No. 99-42

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

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

The city has not adequately pursued the collection of delinquent property taxes. The city had delinquent tax bills totaling approximately $11,000 as of April 1999. It appears this amount represents the total amount of property taxes which have not been paid since the establishment of the city in 1994.

Formal collection procedures should be established related to delinquent property taxes and delinquent accounts should be pursued on a timely basis.

Annual reports are not prepared summarizing the amount of property taxes collected as well as those that remain delinquent, and the city has not established the annual property tax rates by ordinance as required by state law.

An annual maintenance plan for city streets has not been prepared. A formal maintenance plan should be prepared in conjunction with the annual fiscal budget and include a description of the roads to be worked on, the type of work to be performed, an estimate of the quantity and cost of materials needed, the dates such work could begin, the amount of labor required to perform the work, and other relevant information. The plan should be included in the budget message and be approved by the board. In addition, a public hearing should be held to obtain input from the city residents.

A formal maintenance plan would serve as a useful management tool and provide greater input into the overall budgeting process. Such a plan provides a means to more effectively monitor and evaluate the progress made in the repair and maintenance of streets throughout the year.

Bids were either not solicited or bid documentation was not retained for some expenditures. The city approved expenditures in excess of the approved budget for the General Fund. The city did not have formal written agreements for various contracted services.

The city purchased several items for the Lake Lafayette Landowners Association which resulted in sales tax not being properly paid. The association traded two tractors, which had previously been given to the city, without the city's approval. The city's written agreement with the association does not include provisions regarding the rental of the city hall building.

Accounting duties are not adequately segregated. Deposits are not made on a timely basis. Checks and money orders are not restrictively endorsed immediately upon receipt. The Mayor and Aldermen can sign checks, but are not bonded.

Semi-annual financial statements have not been published as required by state law. The board minutes are not signed by either the City Clerk or the Mayor.

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