YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-05
January 24, 2000
During our audit of the Twenty-First Judicial Circuit, City of Breckenridge Hills, Missouri, Municipal Division, we identified certain management practices which we believe could be improved.
Cash receipts for bonds totaling at least $13,978 were received and not deposited during the period January 1, 1997 through August 31, 1998. A bond ledger showing receipt, disbursement, and balance for each bond was not maintained. In addition, bond monies were not deposited intact on a timely basis, and monthly bank reconciliations were not prepared. These factors helped conceal the misappropriation of funds.
These misappropriations could have been prevented or detected on a more timely basis if adequate oversight and reviews had been performed and internal controls had been established.
The city of Breckenridge Hills Municipal Division accepts cash, checks, and money orders for payment of bonds. Cash bond payments are collected by the police department, recorded on a prenumbered bond form and a bond log, and are transmitted to the Court Clerk within a day of receipt. Check and money order payments for bonds received from other courts are also recorded on the prenumbered bond forms and police bond log by the Court Clerk. The Court Clerk deposits bond receipts into a separate bank account. Bonds are disbursed as the applicable case is settled in court.
In the Spring of 1999, the city hired a consultant to install an updated computerized accounting system for the court. As part of the implementation of the new system, the consultant prepared a listing of bond open items (liabilities) which was reconciled to the bond bank account balance. The open items balance exceeded the bank account balance by approximately $14,000 at May 31, 1999. This difference was subsequently identified as bond monies received which had not been deposited.
Prior to May 1999, a bond ledger showing bond receipts, disbursements, and open balances was not maintained, monthly listings of open items were not being prepared, and the bond bank account was not being reconciled. The Court Clerk listed the bond receipts individually on deposit stubs indicating the corresponding bond form number next to each entry. Deposit stubs functioned as both a record of bonds receipted and a record of bonds deposited by the court. Though the police department also maintained a log of bonds receipted, there was no independent reconciliation of bonds collected by the police department to bonds deposited by the Court Clerk. In addition, the Court Clerk did not issue a receipt slip to the police department indicating which bonds had been transmitted to her.
Based on police department receipt records and various other records that were available, $13,978 of bond monies collected by the police department from January 1, 1997 through August 31, 1998, were not recorded on deposit stubs or deposited by the Court Clerk. The Court Clerk responsible for depositing these monies was removed from that position on August 31, 1998 and resigned from the city in December 1998, prior to these discrepancies being discovered.
We recommend the municipal division, along with the city, continue to work with law enforcement officials regarding any criminal prosecution and to obtain restitution of the missing funds.
The duties of receiving, recording and depositing or transmitting monies are not adequately segregated and some receipts were not deposited or transmitted on a timely basis.
We recommend the municipal division establish a documented review of court accounting records by an independent person and deposit receipts intact daily or when accumulated receipts exceed $100.
Phillip Algee serves as the Municipal Judge of the city of Breckenridge Hills. Jenny House served as Court Clerk through August 31, 1998. She was responsible for receiving, recording, depositing, and disbursing monies and preparing bank reconciliations.