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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-26
April 20, 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 Holland, Missouri.
The city had not prepared a budget for the year 2000 as of January 14, 2000. In addition, the budgets prepared by the city for the years ended December 31, 1999 and 1998, did not comply with Chapter 67 of the Missouri statutes (budget law). The city only prepares a budget for the general fund and the water and sewer fund. Neither of these budgets included projected ending balances, actual (or estimated for years not yet ended) revenues and expenditures for the two preceding budget years, or a budget message. In addition, the Board of Aldermen does not perform periodic comparisons between budgeted and actual expenditures. To better inform citizens and to ensure the city's budgets reflect the restrictions placed on the city funds, the city should prepare budgets for each fund and monitor actual expenditures compared to budgeted expenditures.
The city's most recent audit is for the year ended December 31, 1997. State law requires the city to obtain annual audits of the combined water and sewer system, and the cost of the audits is to be paid from the revenues received from the system. In addition, annual audits are required by the city's combined water and sewer system bond covenants.
The city has not published semi-annual financial statements as required by state law and has not submitted an annual financial report to the State Auditor's Office since 1997.
The City Clerk is more than a year behind in recording total billings and payments for the water and sewer system in the control ledger. As a result, monthly reconciliations of total billings, payments received, and amounts remaining unpaid cannot be performed.
Monthly reconciliations are necessary to ensure that all accounting records balance, transactions have been properly recorded, and any errors or discrepancies are detected on a timely basis. Complete documentation of the reconciliations should be retained to support conclusions and any corrections made and to facilitate independent reviews.
The City Clerk does not reconcile meter deposit records to the balance in the bank account. The city has failed to establish a reserve account as required by bond covenants. The city did not solicit proposals when selecting an engineering contractor for the city's water project. In addition, the city does not reconcile the total gallons of water billed to customers to the gallons of water pumped.
The City Clerk also serves as the City Treasurer and the City Collector contrary to an Attorney General Opinion. Controls over cash receipts and disbursements are not adequate. In addition, the city has not prepared or maintained property records.
The City Clerk's duties include collecting and depositing property tax receipts. The City Clerk did not make a detailed report to the Board of Aldermen summarizing the various property tax amounts collected during the year. In addition, a detailed monthly report of delinquent taxes should be submitted to the board by the City Clerk. State law requires reports to be submitted to the board of aldermen indicating the amount of taxes collected and taxes remaining delinquent. In addition, the City Clerk is not charging penalties on delinquent taxes.
The two city employees do not prepare time sheets or maintain records of vacation and sick leave. The city has not adopted ordinances to establish the compensation and duties of each employee. In addition, the Water Supervisor is also the elected City Marshall and he was paid $23,400 for his duties as Water Supervisor. This arrangement is not in compliance with state law which states that an elected or appointed official is to be paid only for the position he was elected or appointed to serve. The city does not have written agreements with the City Attorney and City Judge.
The city receives state motor vehicle-related revenues and deposits them into the General Fund. Article IV, Section 30 of the Missouri Constitution, requires that motor vehicle-related receipts apportioned by the state of Missouri be expended for street-related purposes only including policing, signing, lighting, and cleaning of roads and streets. The city has not established a separate fund or separate accounting for these receipts and disbursements and does not monitor the use of these funds to ensure compliance with the Missouri Constitution.
The city's ordinances are not complete and up-to-date. Board minutes are not signed by the Mayor.
In the City of Holland municipal court, receipts are not always deposited intact or timely and formal bank reconciliations are not performed. The numerical sequence and ultimate disposition of all traffic tickets is not accounted for properly and complaint forms used are not prenumbered.
