YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 29, 2003

Report No. 2003-100

IMPORTANT:  The Missouri State Auditor is required by Missouri law to conduct audits only once every four years in counties which do not have a county auditor.  The State Auditor had performed an audit of Christian County for the two years ended December 31, 2001.  As Christian County became a second-class county with a County Auditor in 2003, this final state audit is only for the year ended December 31, 2002. 

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

• The county has experienced significant growth in revenues and expenditures of the General Revenue Fund; however, the county has spent more than it received during the last two years, resulting in a significant decline in the General Revenue Fund's cash balance.  In addition, the General Revenue Fund's 2003 budget projects a zero ending cash balance, as all revenues and the beginning balance have been appropriated.

A contributing factor to the weakening financial condition of the General Revenue Fund is the distribution of about $1 million of the county's one-half cent general sales tax to the Special Road and Bridge Fund, special road districts, and cities.  Other significant factors include salary increases ranging from 3 to 35 percent for county employees and the addition of approximately 35 new employees resulting in approximately $1 million in salary and fringe benefit increases in 2002.  In addition, transfers from General Revenue to supplement other county funds have increased. Prisoner board revenues fell short of budget estimates but law enforcement expenses increased.  The County Commission should closely monitor the financial condition of the county taking the necessary steps to improve the financial condition of the General Revenue Fund.

• Bids were not always solicited in accordance with statute nor was bid documentation always retained for various purchases.  In addition, controls over county expenditures need improvement, as various questionable expenditures were noted, including the payments of compensatory time to employees that did not follow county policy.  Further, supporting documentation was not retained for several expenditures, and some invoices were not paid timely.  Considering the financial condition of the General Revenue Fund, all county officials should be using extreme diligence when directing the use of county resources.
   

• Improvement is needed in the preparation of the county's budgets.  Budgets for some funds did not include all available beginning cash balances and did not adequately reflect the anticipated financial condition.  Expenditures exceeded budgeted amounts for several funds, and budgets were not prepared for some funds.
   
• The county does not have specific procedures in place to track federal assistance for preparation of the Schedule of Federal Awards (SEFA).  The county’s SEFA schedule contained numerous errors and omissions including only reporting 8 of 18 federal programs resulting in federal grant expenditures being understated by $258,700. 
   
• The County Commission does not maintain adequate minutes of its meetings.  Minutes do not exist for some scheduled County Commission meetings, and during April and May 2003 the County Commissioners did not have a secretary and only unofficial, manual notes were maintained of motions made. 

The audit also includes some matters related to county sales tax, county expenditures, personnel and payroll procedures, computer controls, general fixed assets, and the Senior Services Board. 

Complete Audit Report