YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
|
YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-84
August 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 Novinger,
Missouri.
The
City of Novinger is in poor financial condition. The city may have to refund $53,231 to the U.S. Department of
Justice of federal grant proceeds because the city did not use this money in
accordance with the grant agreement.
The city received a COPS grant award for hiring additional police
officers, but instead, the city used the grant monies to pay the salary of the
City Marshal.
In
addition, the city received $44,633 in 1992 and 1994, from the estate of Oneita
Garrison. Garrison’s last will and
testament directed the city to deposit the money in certificates of deposit,
and use the interest income for Christmas lights. Instead, the city spent almost all of the donation for city
operations.
The
city had a combined balance of only $8,745 in operating funds at June 30,
2000. In addition, the bank balance of
the Water Fund has been overdrawn on several occasions during the last two
fiscal years, and the city needs to deposit additional funds in the Replacement
and Extension Fund to comply with the city’s bond covenants.
The
Board of Aldermen does not adequately monitor the financial condition of the
city. Monthly financial reports
provided to the board do no include sufficient detail of the city’s
expenditures. The board does not
periodically compare actual revenues and expenditures to budgeted amounts, and
the city has overspent its budgets during the years ended June 30, 2000 and
1999. In addition, the city does not
maintain adequate accounting records.
General ledgers are not maintained for each fund, and bank
reconciliations are not adequately prepared.
The
Board of Aldermen needs to establish a
plan to make the repayments of unallowable federal grant proceeds and to set
aside the required amounts for the Christmas light project, and prepare a
budget which reflects this plan. The
board needs to review the financial activity of the Water Fund and set rates to
adequately fund operations and set aside the required amount of money in the
Replacement and Extension Fund. In
addition, the board needs to ensure an effective system of accounting and
administrative controls are in place, including an effective financial
reporting system and procedures to monitor budgeted and actual activity.
The city’s budgets do not include some information required by state law. The city has not published semi-annual financial statements, submitted annual financial reports to the State Auditor’s Office, nor obtained annual audits of its combined waterworks and sewage system.
The
city does not reconcile gallons of water pumped to gallons of water billed to
customers, maintain adequate records of water meter deposits held, nor perform
reconciliations of total billings, payments received, and delinquent
amounts. The city collects an
administrative fee for trash service but has not documented the administrative
costs of providing the service.
A
formal bidding policy has not been adopted, several invoices or supporting
documentation were not retained, invoices are not always initialed or date to
indicate receipt of goods or services, and invoices are not canceled to prevent
duplicate payment. Fuel usage is not reconciled
to fuel purchased. Written contracts
have not been obtained for various services.
Time sheets and leave records are not maintained for city employees.
The city does not have a formal policy regarding public access to city records. Some city records are maintained at residences of some city officials, the records located at city hall are not always filed in an orderly manner, and some records could not be located.