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YELLOW SHEET Office of the State Auditor of Missouri |
June 6, 2003
Report No. 2003-49
Department of Natural Resources could improve handling of various state grants
This audit focused on management practices and compliance with state laws, regulations, and agency policies in several areas of state grants including: historic preservation, soil and water, storm water, solid waste management, and sewers.� The audit included transactions of the Department of Natural Resources (DNR) during fiscal years 2000, 2001, and 2002. The following highlights our findings:
More defined conflict of interest guidelines needed for historic preservation grants
The DNR administers the state's Historic Preservation program, which helps qualifying preservation projects receive state and federal money.� The state pays a 40 percent match of aggregate costs for such projects, which totaled approximately $897,000 for the three fiscal years in this audit. �Auditors reviewed the management of various preservation grants, including the handling of grants involving current DNR employees and employee relatives as interested parties.� The audit noted two instances where documentation was not adequate or sufficient to address potential conflicts of interest. �(See page 5)
Some storm water control grant expenditures appeared overstated
The DNR administers several grant programs funded by general obligation bonds, including water pollution control, rural water and sewer grants, and storm water control grants.� The DNR projected expenditures of $12.5 million in fiscal year 2003 appear to be overstated.� Total rural water and sewer grants awarded, but not spent, as of July 2002, totaled approximately $5.7 million. �An additional $4.3 million in project awards is anticipated.� Based on prior years' data, it is unlikely all of these projects will be completed by the end of fiscal year 2003.� Auditors recommended the DNR reevaluate its method for projecting grant expenditures to ensure the sale of bonds is necessary to meet current obligations. (See page 10)
Soil and water commission should study how tax revenues are used
In 1984, voters approved a sales tax for soil and water conservation and for state parks. The amount of this sales tax allocated to soil and water conservation averaged over $35 million in each of the audit's three fiscal years. �Auditors found the fund's balance steadily increased because the soil and water program was spending less than it was collecting each year.� Department officials have not compared the soil conserved to the resources spent annually or determined long-range costs associated with meeting these future goals to determine how the sales tax revenue should be used.� In addition, auditors found several of the 114 Soil and Water Conservation Districts received grants to administer landowner grants, which exceed 50 percent of the actual landowner grants distributed. (See page 14)
Department needs to more closely monitor soil and water cost-share program
The soil and water cost-share program reimburses landowners for up to 75 percent of installation costs of various approved erosion control measures.� Landowners apply for the funding, department technicians inspect projects to make sure specifications are met, and landowners receive the money upon approval by the soil and water program.� Auditors found landowners were not required to submit cancelled checks to support the amounts listed on invoices.� One landowner said he did not have a canceled check because he bartered for the services and did not pay for them.� In addition, the department did not always require the applicants to submit itemized invoices, which would assure the items purchased are eligible costs.� (See page 22)
No centralized system to review grants for storm water or solid waste management
Department officials could not provide a list of all state and federal grants disbursed to local entities. As a result, data cannot be reviewed for all grants and no centralized accounting section is responsible for managing all the grants. �In addition, the Clean Water Commission only reviews a brief description of a storm water project prior to approving funding.� Detailed project costs are not part of the brief description, and are not reviewed before funding. �As a result, two of five approved projects reviewed by auditors were later deemed ineligible by department project coordinators because they were not storm water related.� Department officials also allow local coordinating committees to redistribute storm water grant funds deemed ineligible to alternative projects without the commission's approval. �(See page 26)
Better documentation and final inspections needed for sewer grants
The DNR administers various sewer grants to assist communities throughout the state.� The department disbursed approximately $13.5 million in such grants over the audit's three fiscal years.� Auditors found department officials did not always retain proper supporting documentation for reimbursement claims.� In addition, the DNR did not require an adequate final inspection to ensure all requirements of the grant agreement were met before issuing the final grant payment and did not take timely follow up action on projects non-compliant with the grant agreement.� (See page 36)