YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 20, 2001

Report No. 2001-90

IMPORTANT:  The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Mercer, 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 Mercer County included additional areas of county operations, as well as the elected county officials.  The following concerns were noted as part of the audit: 

• Mercer County collected $52,541 in excess property taxes through December 31, 2000.  Mercer County voters enacted a half cent sales tax with a provision to reduce property taxes by 50 percent of sales taxes collected.  The General Revenue property tax levy was not reduced sufficiently.

Based upon sales tax revenue amounts for the first six months of 2001 the General Revenue property tax levy would have to be reduced by 21 cents to eliminate all excess property tax revenues collected from prior years and comply with the sales tax proposal passed by the voters.  The County Commission indicated they plan a levy reduction of 12 cents for 2001; however, this proposed  reduction will only offset 2001 requirements, but will not reduce excess property taxes from prior years.

• The county does not have adequate procedures in place to track federal awards for preparation of the schedule of expenditures of federal awards.  The county prepared a schedule for the years ended December 31, 2000 and 1999; however, the schedule contained a number of errors and omissions.  Without an accurate schedule, federal financial activity may not be audited and reported in accordance with federal audit requirements, which could result in future reductions of federal funds.

• 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 Mercer county’s Associate County Commissioners salaries were each increased approximately $6,065. 

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 $12,130, for the two years ended December 31, 2000, should be repaid.  In light of the ruling, any raises given to other officials within their term of office should be re-evaluated for propriety.

• Duplicate payments were made on several invoices totaling approximately $16,000 during the two years ended December 31, 2000.  This resulted because billing statements were not always reconciled to invoices prior to payment nor was the expenditure system checked to ensure payment had not already been made.

• The general fixed asset listing has not been updated nor has a physical inventory been completed since 1995.  Examples of items purchased which are not included on the fixed asset listing include a truck costing approximately $22,000, a mower costing $25,000, excavating equipment costing approximately $123,000 and a brush sheer costing $4,500.

The audit also includes some matters related to expenditures, bidding procedures, computer system controls, County Commission minutes, revenue maximization, Sheriff accounting controls and procedures, and Ex-Officio County Collector procedures, upon which the county should consider and take appropriate corrective action.  Several of these issues had been noted in prior audits.

Complete Audit Report