YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2000-83
August 30, 2000

Some problems were discovered as a result of an audit conducted by our office in response to the request of petitioners from the Village of Miramiguoa Park, Missouri.

The village bills each resident annually for the various village assessments.  These assessments were originally started prior to the incorporation of the village, when it was a private subdivision.  As many as seven different assessments may be included on the billing depending on whether the resident is a homeowner who lives in the village full-time, a homeowner who lives in the village part-time, a lot owner only, or a resident that does not have a paved roadway leading to his/her lot.  The monies collected from these assessments are used to repay a 1995 road loan, make road and water system repairs and perform upkeep, pay for trash hauling and grass cutting, pay village operating expenses, and provide for a contingency.

The fees charged to residents for water, trash, and grass were established without a public vote, generate greater revenues than the annual expenditures incurred by the operations they were meant to fund and are not accounted for separately from other operating assessments.  The village has no statutory authority to assess the road and surtax assessments.

In November 1995, prior to the incorporation of the village in 1997, the private subdivision of Miramiguoa Park entered into a loan agreement for the paving of the roads.  The subdivision borrowed $38,232 at an interest rate of eight percent to pay for the service.  Annual payments were made each November with the principal of the note originally due by December 1, 2000.  In April 2000, the loan was extended to December 1, 2001.  The subdivision/village has made $25,127 in principal payments as of November 1999.  The note does not contain any provisions for the village to cancel the agreement due to lack of appropriations or any other reasons.  Without this type of option, the village appears to have inherited a long term debt arrangement.

This agreement appears to violate the intent of the Missouri Constitution on legal indebtedness absent a vote of the village residents.

The village’s budgets were not properly prepared and formally approved as required by state law.  Semi-annual financial statements were not published or posted prior to 2000, and the annual financial reports submitted to the State Auditor’s office were not accurate. Some meetings of the board were not open to the public and board minutes are not signed by either the Village Clerk or Village Chairman.

The village does not have a formal bidding policy.  Based on discussions with village officials, it appears bids are generally solicited for purchases of goods or services; however, documentation of these bids is not adequate.

Formal bidding procedures for major purchases provide a framework for economical management of village resources and help ensure the village 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 village’s business.  Complete documentation should be maintained of all bids received and reasons noted why the bid was selected.

Supporting documentation was not maintained for all disbursements made by the village.  Various payments for grass cutting, postage, room rental, and other miscellaneous repairs had no invoice or other documentation to support the payments.  In addition, other invoices were not adequately detailed to support the work performed.

The Village Clerk also serves as the Treasurer and Collector for the village resulting in duties which are not adequately segregated.  

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