YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

July 15, 1999
Report No. 99-43

Some problems were discovered as a result of an audit conducted by our office in response to petitioners of Public Water Supply District Number 2, Laclede County, Missouri.

The district has not obtained annual audits as required by state law.

Improvements are needed in the district's budgeting. The financial statement prepared for the year ended December 31, 1998, did not agree to the district's accounting records. Accurate and complete budgets and financial statements are necessary to keep the district informed of the financial activity and condition of the district.

Accounting and bookkeeping duties are handled by the same person, in this case the water district clerk. An independent review of records by someone other than the clerk would provide a needed check on the district's finances.

The board president's wife was appointed clerk of the water district in February 1997. The board meeting minutes did not document whether or not the president participated in the appointment process.

The appointment or hiring of a relative by a public official is prohibited by the Missouri Constitution. Because of the serious consequences which can result by hiring a relative, namely the possible forfeiture of elected office, the circumstances surrounding the hiring of a district official's relative should be fully documented.

The minutes of the open public meetings do not adequately or clearly document all items discussed or decisions made by the board. Also, the minutes do not always document which board members are present at meetings. The minutes are the only official record of board actions. Inadequate minutes can lead to public confusion when actions of the board are reviewed.

Miscellaneous receipts, such as meter connection fees and sales tax collections, are not properly recorded. The balance of the meter deposit account is not reconciled to actual meter deposits. Payment methods are not always recorded and the board does not periodically review delinquent water accounts.

Gallons of water billed to customers are not reconciled to gallons of water pumped. This reconciliation is necessary to detect significant water loss and to ensure all water usage is properly billed.

The district does not have a written travel expense policy, and employee reimbursements are not always supported by adequate documentation of actual expenses.

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