YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

In the September 1999 meeting of the Board of Aldermen, the board considered a request for voluntary annexation of a subdivision owned by the Mayor’s son.  Several lots in the subdivision had previously been owned by the Mayor and his wife until August 1999 when ownership of the lots was transferred to the Mayor’s son.  Our review of the city’s handling of this annexation disclosed the following concerns: 

·        The annexation issue was presented to the Board of Aldermen in the form of a bill.  For the bill to become a city ordinance, the bill must be read twice and approved by the board on both readings.  On the first reading of the bill there was a tie between the aldermen and the mayor broke the tie by voting in favor of the annexation of the property.  In addition, the Mayor read a statement during the meeting encouraging the passage of the annexation ordinance.  Since the Mayor is related to the property owner, these actions create the appearance of a conflict of interest. It appears the mayor should have abstained from voting. 

Officers and agents of a city serve in a fiduciary capacity.  Personal interests in business matters of the city create the appearance of conflicts of interest. 

·        In addition, the city failed to file annexation documents with the Barry County Clerk’s office in a timely manner.  The September 1999 board minutes indicate that the City Clerk was to file annexation documents with the Barry County Clerk; however, as of August 2000 these papers had not been filed.  After this was brought to the city’s attention the annexation documents were filed. 

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 in some instances.  Examples include water supplies ($5,180) base rock and cold mix ($2,208), and a security system($834).   

The city regularly requests the services of a local contractor to perform water and sewer construction as well as street repairs.  Bids are not solicited for these services.  For the years ending June 30, 2000 and 1999 the city made payments to this contractor totaling $8,140 and $23,020, respectively. 

In addition, the city did not solicit requests for proposals for some professional services, such as engineering services ($2,262) and auditing services ($3,714).

Formal bidding procedures for major purchases provide a framework for economical management of city resources and help ensure the city receives fair value by contracting with the lowest and best bidders. 

The budgets prepared by the city for the years ended June 20, 2000 and 1999, did not comply with Chapter 67 of the Missouri statutes (the budget law).  The city’s budgets did not include projected ending balances or actual revenues and expenditures for the two preceding budget years.  The budget prepared for the year ending June 30, 2001 included revenues and expenditures for the two preceding years; however, amounts presented were not complete.  For instance, trash revenues and expenditures were not included in the general fund. 

The city maintains sixteen bank accounts.  Except for separate accounts for the General Obligation and the Combined Water Works and Sewerage System Bonds, it appears many accounts could be consolidated.  In addition to the time required to reconcile this number of accounts, an increased number of checks are required to be written and deposits required to be made.  Currently, a large number of checks are written to allocate expenditures among the various funds because they are maintained in separate accounts.  Depositing procedures are also complicated when a single check is written for payment into various accounts. 

Late fees on some utility payments were abated without proper board approval.  The city has not periodically performed formal reviews of the water and sewer rates.  There is no segregation of accounting duties, and the city does not reconcile utility accounts receivable balances each month. 

The Municipal Court Clerk performs all of the duties related to the collection and disbursement of fines, court costs, and bonds.  Neither the Judge nor other personnel provide independent reviews of the work performed by the Court Clerk. 

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