YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

December 22, 2003

Report No. 2003-117

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

• Accounting and bookkeeping duties over county funds are not adequately segregated.  The County Treasurer is primarily responsible for receiving, depositing, preparing bank reconciliations, and maintaining the accounting records.  The County Treasurer also enters some disbursements, and prepares and issues checks.  Although the County Treasurer files a daily receipts report, a monthly report of fund balances, and semi-annual settlements with the County Clerk, the County Clerk does not have independent records to compare the Treasurer's information to and does not perform a documented review of the reports and reconciliations prepared by the County Treasurer.

• Formal budgets were not prepared for various county funds, disbursements exceeded budget amounts, and the annual published financial statements of the county did not include the financial activity of some funds.

• Bids were not always solicited nor was bid documentation always retained by the county for various purchases.  While the county officials provided some explanations, documentation was not always maintained.

• As noted in the prior audit, administrative service fee transfers from the Special Road and Bridge Fund to the General Revenue Fund have often exceeded three percent of actual disbursements. As of December 31, 2002, $98,713 is due back to the Special Road and Bridge Fund for these excess transfers.

• The county has not sufficiently reduced its general revenue property tax revenues by 50 percent of sales tax revenues as provided in the ballot issue passed by county voters.  The county collected excess property tax revenues totaling $33,339.  Although the former County Clerk's calculations could not be located by the current County Clerk, it appears that the excess taxes could be partially attributed to actual sales tax receipts being greater than the amount estimated.

• The County Clerk does not maintain an account book with the County Collector and does not prepare or verify the current or back tax books.  Controls over property tax book additions and abatements are not adequate.

• There was no evidence deputies who handle monies were covered by an employee bond and centralized leave and compensatory time records were not maintained by the County Clerk.

• The County Clerk is a license fee agent for the Missouri Department of Revenue (DOR) and operates the fee office from his office in the courthouse.  The County Clerk receives a fee for each license or permit processed.  Based on an agreement between the County Clerk and the County Commission, the County Clerk pays the county $100 per month for rent.  In addition, the County Clerk pays 50 percent of the salary of one of his three deputies.  No documentation exists to document the adequacy of the monthly rental amount or the salary allocation of the deputy.  All three deputies were observed performing some DOR business most every day.  Time spent on DOR business reduces the time available for county business which could be used to implement controls mentioned throughout this report related to the County Clerk's office.

• The 911 Board does not have adequate budgetary and receipting procedures, individuals who handle monies are not bonded, and the petty cash fund is not properly maintained.  In addition, the Board does not issue IRS Forms 1099-MISC as required and does not maintain adequate fixed asset records.

Also included in the audit were recommendations to improve the county's general fixed assets records and procedures.  The audit also suggested improvements in the procedures of the Assessor, County Clerk, Sheriff, Circuit Clerk, Associate Division, and the Health Center.  

Complete Audit Report