 |
YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-14
March 6, 2000
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 Wellston, Missouri.
The city's quarterly COPS grant reports were not accurate and copies of some reports were not retained. During the period July 1997 through July 1999, the city over claimed approximately $91,600 from the COPS grant due to various errors.
On August 26, 1997, the City Council established a benefits package for the mayor, treasurer, and the council members. The council transferred $80,000 from city funds to a certificate of deposit to pay for future benefits. The benefit package has a death benefit and a severance benefit. The death benefit pays $10,000 to the beneficiary of a city official who dies while holding office. The severance benefit pays $10,000 to city officials having been an official for a period of at least 10 continuous years who cease to be a city official for any reason other than death or cause.
Parts of the benefit package look like a retirement plan, which the city is prohibited from establishing by state law. However, the most significant problem appears to be the increase in compensation or benefits during the term for which an officer is elected or appointed, which is prohibited by Article VII, Section 13, of the Missouri Constitution. Retroactive compensation for services previously rendered is in violation of Article III, Section 39 of the Missouri Constitution.
During the period October 1995 through April 1998, loans were made to some city officials and employees totaling approximately $29,500, which were to be repaid through payroll deductions. The employees were required to sign a contract indicating that they would continue to make these payments if they left city employment; however, there are several past and current employees with unpaid balances totaling approximately $6,700 as of June 30, 1999. In addition, the city did not appear to attempt to withhold any unpaid balance from the five former employees' final paycheck. It would appear these payments are in fact interest free loans to employees.
Also, since June 1999 the Mayor received his payroll checks from two to six weeks in advance of the dates earned.
Some city officials improperly received raises within their term of office, in violation of Article VII, Section 13 of the Missouri Constitution.
The city purchased fifteen cellular phones, some of which were to be used as city phones, and some of which were resold to city employees and another individual to be used as personal phones. The purchase price and phone bills for the personal phones initially are paid by the city and then reimbursed through payroll deduction for the employees, and through payments from the individual. Phone service is discontinued when employees leave city employment. The purchase of personal phones and service does not appear to be a necessary, proper, or prudent use of city monies. Also, the city has failed to properly bill or collect the total cost of personal phone service.
The city has taken over providing a lunch and transportation service to senior and disabled citizens, including persons outside city limits. During the two years ended June 30, 1999 and 1998, the city's net costs for this program were at least $96,000 and $81,000, respectively. It is unclear whether the city has the authority to provide the program or can afford it. Also, the city has not ensured that the fee charged to employees for meals obtained through the program is adequate or is always collected.
The city has not identified all costs of the city's trash collection program to ensure the fee is sufficient, has not taken adequate steps to ensure the timely collection of delinquent accounts, and has not developed procedures to ensure all customers are billed. Controls and accounting records for trash service fees are not adequate.
Bids or proposals were not solicited or bid documentation was not retained for many purchases and the city did not obtain formal written agreements with companies or individuals providing services to the city. Also, documentation to support some disbursements was either inadequate or not available.
Budgets are not approved timely and are not complete. Semi-annual financial statements are not published as required by state law.
The city has not properly accounted for the expenditure of restricted revenues and numerous other accounting controls, procedures, and records were inadequate and inaccurate.
Approximately $4,083 in cash bond monies were not deposited and appear to be missing. Numerous other accounting controls, procedures, and records in the Municipal Court were inadequate and some records were missing.
