Missouri State Auditor's Office

October 25, 2001

Report No. 2001-109

The following problems were discovered as a result of an audit conducted by our office of the Village of Arrow Point, Missouri.

The village has not clearly established any of its assessments as a tax or a user fee. The village has not established a statement of costs to adequately set rates for providing water and trash services to the village customers and revenues generated by the maintenance fee far exceed the village’s annual expenses. The village also assesses a building permit fee for all new construction although the village does not have a building inspector or any other related costs. The village should request that its attorney review these fees to determine whether they are or can be structured as user fees, or whether they should be put to a public vote.

The village does not separately account for the activities related to its various assessments. All financial activity is accounted for in one fund. A General Fund should be used to account for the general activities and other operations should be accounted for separately to ensure that charges do not exceed the costs of providing the service. In addition, late fees charged by the village appear to be excessive and should be reviewed for reasonableness.

In 1995, the Village of Arrow Point brought suit against former board chairman Bill Crouch for conflicts of interest noted in a prior audit. A counter suit was filed by Mr. Crouch requesting $4,245 along with interest and legal fees. In 1998, a different board than the one that brought the suit dismissed it and made a $10,000 payment to Mr. Crouch. The board did not obtain any written legal opinion to support their actions nor did they document their reasons for dismissing the suit. The payment represents a significant village expenditure considering total receipts for the village in that year were approximately $11,400.

The village did not prepare a budget until 2001. The 2001 budget was not properly prepared and formally approved as required by state law. Closed meetings were apparently not always conducted in accordance with state law and board minutes have not always been adequately maintained.

Accounting duties are not adequately segregated, as only one official handles the accounting records.