YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

 

September 28, 2001

Report No. 2001-105

IMPORTANT:� The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Morgan, which do not have a county auditor.� However, to assist such counties in meeting federal audit requirements, the State Auditor will also perform a financial and compliance audit of various county operating funds every two years.� This voluntary service to Missouri counties can only be provided when state auditing resources are available and does not interfere with the State Auditor�s constitutional responsibility of auditing state government. 

Once every four years, the State Auditor�s statutory audit will cover additional areas of county operations, as well as the elected county officials,� as required by Missouri�s Constitution.��

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This audit of Morgan County included additional areas of county operations, as well as the elected county officials.� The following concerns were noted as part of the audit: 

• Over the past decade, the Morgan County Commission established thirteen neighborhood improvement districts to develop certain roads in the respective districts.� As noted in prior audits, the county has included a maintenance levy in the special assessments levied to landowners of the neighborhood improvement districts.� The county assessed this maintenance levy on all thirteen projects at the time of their creation and continues to assess and collect this maintenance levy.� 

Prior to August 1994, state statute and the ballot wording did not provide for the assessment and collection of the maintenance levy.� Current state law allows the county to obtain voter approval for the assessment and collection of this levy after the bonds issued to fund the project are fully repaid.� The County has never obtained such voter approval for the first five projects.� Also, for these projects and five additional projects established between August 1994 and January 1999 the county is collecting the maintenance levy even though the bonds for these projects have not yet been paid in full. 

For the three most recent projects, established in 1999 and 2000, voters passed an additional ballot issue specifically authorizing the collection of a maintenance levy during the period that the project bonds are outstanding.� However, there is no statutory authority allowing the county to vote for, assess, or collect a maintenance levy during the period that the bonds are outstanding. 

While the County Commission believes they are operating within the original intent of the legislation, they have not obtained a written legal opinion in support of their positions and actions. 

• A state law, Section 50.333.13, RSMo, enacted in 1997, allowed salary commissions meeting in 1997 to provide mid-term salary increases for associate county commissioners elected in 1996 due to the fact that their terms were increased from two years to four.� Based on this law, in 1998 Morgan County�s Associate County Commissioners salaries were each increased approximately $6,390 yearly, according to information from the Presiding Commissioner.� 

On May 15, 2001, the Missouri Supreme Court handed down an opinion that holds that all raises given pursuant to this statute section are unconstitutional.� Based on the Supreme Court decision, the raises given to each of the Associate County Commissioners who served one, two, and three years, totaling approximately $6,390, $12,780, and $19,170, for the three years ended December 31, 2000, should be repaid.� In addition, other officials also received raises within their term of office.� Any raises given to other officials within their term of office should also be re-evaluated for propriety. 

• The county has not sufficiently reduced its general revenue property tax levy to reduce property tax revenues by 50 percent of sales tax revenues as provided in the ballot issue passed by Morgan County voters under state law.� Procedural errors, combined with actual sales tax collections exceeding estimated amounts, has resulted in the county having collected excess property tax revenues totaling approximately $51,000.� The County Commission reduced the General Revenue fund tax levy approved in August 2001 to adjust for the prior excess collections.

• The Prosecuting Attorney has not established adequate controls or records for the handling of court ordered restitution, bad check restitution and bad check collection fees.� Duties are not adequately segregated, receipts are not deposited timely, and monthly listings of open items are not prepared or reconciled to cash balances.� In addition, an adequate system has not been developed to account for all bad check complaints received and their ultimate disposition.

• The Sheriff has not adequately segregated accounting duties, and the escrow account contains large old outstanding checks or open items which should be researched and disposed of properly.� Also, inmate and commissary monies are not accounted for properly, including the failure to issue receipt slips for some monies, returning some monies in the form of cash, not reconciling the bank accounts to individual prisoner records, and not performing some bank reconciliations.� The Sheriff�s Office could not adequately account for approximately $3,300 in inmate and commissary receipts due to the lack of controls and poor record keeping.

The audit also suggested improvements to the schedule of expenditures of federal awards, published financial statements, budgetary practices, bidding procedures, fixed assets, apportionment of railroad and utility taxes, and collateral security.� The audit also noted improvements needed in the accounting controls of� the Health Center Board and the Senior Citizen Service Board.� Several of these issues have been mentioned in prior audits. 

Complete Audit Report

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Missouri State Auditor's Office
moaudit@auditor.mo.gov

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