YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 30, 2002

Report No. 2002-104

IMPORTANT:  The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties, like Washington, which do not have a county auditor.  However, to assist such counties in meeting federal audit requirements, the State Auditor will also provide 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 it 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 Washington County included additional areas of county operations, as well as the elected county officials.  The following concerns were noted as part of the audit:

• The county does not have adequate procedures in place to track federal financial assistance for the preparation of the schedule of expenditures of federal awards.  The county's schedules for 2001 and 2000 contained several 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 in federal funds.
  
  
• Formal budgets were not prepared for some county funds and disbursements were made in excess of approved budgets for various funds.  The County Commission's amending of some budgets caused projected deficit cash balances in those funds.  Documentation was not maintained to support the administrative service fee transferred from the Special Road and Bridge Fund.
  
  
• In prior years, the County Commission issued several loans to companies and individuals as part of an economic development program.  Although the agreements indicated there were to be monthly payments of interest and principal, two companies made no interest or principal payments during 2000 and only interest payments during 2001.  Another company had not made any payments of interest or principal during the two years  and there was some dispute over the amount remaining unpaid.  Because these monies have not been repaid, the county has less money available for additional economic development loans.
  
  
• A state law, Section 50.333.13, RSMo, enacted in 1997, allowed salary commissioners 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 Washington County's Associate County Commissioners' salaries were each increased approximately $6,650 yearly.

On May 15, 2001, the Missouri Supreme Court handed down an opinion that holds that all raises given pursuant to Section 50.333.13, RSMo, are unconstitutional.  Based on the Supreme Court decision, the raises given to each of the Associate County Commissioners, totaling approximately $19,950 should be repaid.

• Although the county has reduced the tax anticipation notes payable, $267,000 is still outstanding at December 31, 2001.  The county has not had the funds to completely pay off the notes in one year as required by Section 50.070, RSMo, and have renewed such notes annually.
  
  
• Several problems were noted regarding the records and procedures of the Washington County Handicapped Board (also know as the Senate Bill 40 Board) including incorrect budgets, missing records, pay and benefit concerns, Sunshine Law compliance, problems with expenditures and contracts, and inadequate fixed asset records.
  
  
• Several problems were noted regarding the records and procedures of the Health Center including concerns over receipts and deposits, questionable expenditures, inadequate fixed asset records, and Sunshine Law compliance.
  
  
• Several problems were noted regarding the records and procedures of the Central Dispatch 911 Board including Sunshine Law compliance, consulting service contracts and invoices, and documentation of land acquisition.

Complete Audit Report