 |
YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-45
June 15, 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 Mount Vernon, Missouri.
The city does not have a formal bidding policy. As a result, the decision of whether to solicit bids for a particular purchase is made on an item-by-item basis. Bids were either not solicited or bid documentation was not retained for $53,154 for property and liability insurance; $17,703 for fuel; $44,482 for water and sewer supplies; and $4,500 for a backhoe lease. Some board minutes did not contain documentation of the justification for accepting a bid other than the lowest bid or of sole source procurement situations and the city did not solicit proposals for auditing services.
Formal bidding procedures provide a framework for the economical management of city resources and help ensure the city receives fair value by contracting with the lowest and best bidders. Competitive bidding also helps ensure all parties are given an equal opportunity to participate in the city's business.
The city purchased property for $187,000 without obtaining an independent appraisal.
The city uses the Electric Fund to help finance other city operations. During the year ended June 30, 1999, the city transferred $400,000 from the Electric Fund to the city's General Fund. Transfers totaling $212,150, $100,000, and $200,000 were also made during the years ended June 30, 1998, 1997, and 1996, respectively. In addition, $250,000 has been budgeted as a transfer for the year ended June 30, 2000. Transfers from the Electric Fund to the General Fund have been a regular part of the city's budgeting and funding process for many years. In addition, the taxi driver's salary of $21,000 plus fringe benefits were paid from the Electric Fund.
The Electric Fund, Water Fund, and Sewer Fund are separate accounting entities designed to account for specific city activities. Utility revenues should be used to fund the operations of the respective utilities only.
The city has not performed periodic formal reviews of the electric, water, and sewer rates. City ordinance requires the water and sewer rates to be set at an amount adequate to generate revenues to cover the costs of operation, maintenance, and replacement of the system; however, there is no documentation to indicate the city periodically reviews water or sewer rates to ensure these costs are adequately covered without generating excess revenues.
The city has not consistently enforced the ordinance requiring property owners to share the cost of replacing sidewalks.
Procedures have not been established for the enforcement of the building codes ordinance, and inspections are not adequately documented. The position of Building Inspector has not been established by ordinance.
Improvements are needed in the preparation of city budgets. The city approved expenditures in excess of budgeted amounts. Annual financial reports are not submitted to the State Auditor's office as required by state law.
Accounting duties are not adequately segregated, and receipt slips are not issued for some monies received by the municipal court.
