YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

August 3, 2001

Report No. 2001-60

IMPORTANT:  The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Madison, 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.   

This audit of Madison County was a financial and compliance audit of various county operating funds.  The following concerns were noted: 

• The county’s General Revenue Fund is in poor financial condition.  The county’s debt appears to violate the intent of the Missouri Constitution on legal indebtedness absent a vote of the county residents.  The county’s General Revenue Fund has tax anticipation notes payable and other debt totaling $294,180 and $224,958 at December 31, 2000 and 1999, respectively.  The General Revenue Fund debt has continued to increase yearly as the county has been renewing or consolidating the tax anticipation notes.

In addition, the county’s Special Road and Bridge Fund has lease purchase agreements and other bank loans totaling $200,125 and $181,231 at December 31, 2000 and 1999, respectively.  The debt for the Special Road and Bridge Fund continues to increase yearly as the county continues to buy equipment.  The debt balances significantly exceeded the income and revenue less expenditures budgeted for other purposes plus any unencumbered balances from previous years. 

In April 2001, Madison County passed a one half cent law enforcement sales tax.  The County Commission indicated that this sales tax will enable the county to pay off the General Revenue Fund debt in the next two to three years.  The County Commission indicated the Special Road and Bridge Fund debt should also be repaid in the next two to three years because no additional purchases of equipment are planned. 

• The county has not sufficiently reduced its property tax revenues by 50 percent of sales tax revenues as provided in the ballot issue passed by the Madison County voters under state law.  The county calculated a sales tax rollback but did not rollback the property tax levy due to the county’s poor financial condition.  The county needs to roll back the property tax levy to adjust for the $49,268 excess property taxes collected in prior years.

• 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 1999 Madison County’s Associate County Commissioners salaries were each increased approximately $4,624 yearly.

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, totaling approximately $9,248 for the two years ended December 31, 2000, should be repaid.

• Although noted in several prior audits, the Collector is still not performing statutory duties which would aid the county’s financial condition.  Although the Collector arbitrarily withheld $13,500 from one school district, he has not computed the amount of Proposition C commissions that should have been withheld from the school districts since 1988.

• Warrants were issued in excess of approved budgeted expenditures for several funds during the two years ended December 31, 2000.

The audit also includes some matters related to federal grant records and procedures, published financial statements, county expenditures, bank accounts and accounting records, vehicle records, assessment fund, property tax system and computer controls, and personnel policies and procedures, upon which the county should consider and take appropriate corrective action.  In addition, the audit recommended improvements in the budgetary practices of the Health Department.

 Complete Audit Report