YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2000-63
July 31, 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 Lake Annette, Missouri.

In November 1990, the city contracted with an engineering firm to conduct a feasibility study and perform other services related to the development of a municipal sewer system. Subsequently, in December 1995, the city issued $85,000 in general obligation bonds to assist in financing the system. Since that time, the city has levied a property tax to pay the bond principal and interest.  Although the city has spent almost $59,000 of the bond proceeds, as of February 2000, the city has made little tangible progress toward the development of a sewer system.

The city needs to perform a comprehensive review of this project, the alternative systems presented by the engineers, and the estimated costs of these systems; and determine if it is feasible for the city to proceed with the project.  If determined to be feasible, a firm decision should be made regarding the direction of this project and city officials should commit the necessary efforts and resources to ensure its successful completion.  The city should obtain the necessary technical and administrative assistance from an engineer and/or consultant to assist it in this effort.

The city does not have a formal bidding policy and instances were noted where bids were not solicited or bid documentation was not maintained.  Expenditures were made to parties with whom certain city officials had business relationships.  Compensation was paid to a former alderman which was not authorized by ordinance.  Adequate documentation was not maintained to support various expenditures made from city funds. The city did not enter into written agreements with contractors or individuals in some instances.

The duties of City Clerk and City Treasurer have not always been segregated as required. Bank reconciliations are not properly performed or documented.  City financial activity has not been properly tracked by fund since October 1999, and the city has not ensured some restricted revenues have been used for the purposes required.

The board minutes do not document whether a former alderman voted on the appointment of his wife as City Treasurer.  Timesheets were not always sufficiently detailed or retained to support payroll, and all wages were not properly reported nor applicable payroll deductions withheld.  Quarterly contribution and wage reports were not always accurate and submitted timely.

The board minutes did not adequately document matters discussed and actions taken by the board and the minutes were not always signed by the City Clerk and Mayor.  In addition, the city ordinances are not complete and up-to-date.

In recent years the city has not adopted annual budgets and has not published semi-annual financial statements as required by state law.  In addition, annual financial reports have not been submitted to the State Auditor’s office as required.

Complete Audit Report