YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
June 11, 2003
Report No. 2003-51
The following problems were discovered as a result of an audit conducted by our office of the Village of Velda Village Hills, Missouri.
The Village of Velda Village Hills has failed to implement 27 of the 45 recommendations made in our prior report that covered the year ended March 31, 1997. Although the village indicated in that report that most of the recommendations would be implemented, many recommendations are repeated in the current report. These include IRS regulations, lack of bid documentation, the lack of ordinances establishing the duties and salaries of various city employees, failure to publish financial statements, lack of a travel policy, inadequate supporting documentation for travel expenses and disbursements, failure to retain village records, and inadequate controls in the municipal court.
The village does not have a formal bidding policy. As a result, the decision of whether to solicit bids is made by the board on an item-by-item basis. Bids were either not solicited or bid documentation was not retained for most services obtained and some purchases during the year ended March 31, 2002. Also, during year ended March 31, 2002, the village paid one vendor approximately $98,279 for street repairs and building improvements/maintenance. Village personnel indicated bids were obtained for these projects; however, bid documentation was not retained. Without adequate bid documentation, the village cannot demonstrate that all parties were give equal opportunities to participate in village business or amounts paid were reasonable. In addition, the village does not have formal written agreements with several companies or individuals providing services, and has not established procedures to ensure Internal Revenue Service Forms 1099 are filed when required.
The village has not established procedures to ensure bills are paid on a timely basis and invoices are appropriately canceled. Additionally, the Board of Trustees does not review and approve individual invoices and a supplementary listing of all disbursements approved for payment is not prepared to accompany the minutes.
Supporting documentation was either not submitted or not retained for the individual charges to the village's credit cards. During the year ended March 31, 2002, approximately $4,266 was paid on these credit cards. The only documentation available was the monthly bill, which listed the individual items purchased for only one of the credit cards. Several questionable disbursements, such as a leather portfolio, eyeglasses, and a wallet were purchased on these credit cards.
Supporting documentation was not maintained for eight of the fifty-eight disbursements reviewed, totaling approximately $13,400. In addition, invoices for accounting services were not adequately detailed.
The 2002 budget was not formally adopted by ordinance, motion, or resolution, retained with the official minutes, or signed by the board to denote their approval. The budget did not include actual receipts and disbursements from the two previous years, actual and estimated cash and resources available at the beginning and end of the year, or a budget message. Also, for the year ended March 31, 2002, actual disbursements exceeded the budget by approximately $158,000 and $38,000, for the General Fund and the Street Fund, respectively. In addition, the village does not publish semi-annual financial statements as required by state law.
The village does not have a formal written policy on hiring personnel and has not established an ordinance for the Village Clerk and Court Clerk's compensation rates as required by state law. In addition, the village does not properly report wages, withhold payroll taxes, or pay the employer's share of social security on compensation paid to members of the Board of Trustees, the Village Attorney, the Prosecuting Attorney, and the Municipal Judge.
The village does not have written travel expense policies. Officials receive cash advances for meals and mileage. The cash advances were not reported on the employees' W-2 forms, nor was documentation of these expenses submitted to the village to account for how these monies were spent.
A separate accounting of trash revenues and expenses is not maintained. In January 2002, the village increased the quarterly fee from $10.50 to $42 per resident to reflect increased costs of the trash service. Board approval of this increase was not documented. In addition, the village did not prepare a formal cost study to document the need for the increase.
Trash records are not adequately maintained. Monthly reconciliations of total trash billings, payments received, and unpaid amounts are not performed. In addition, the village does not adequately monitor or pursue the collection of delinquent trash bills.
Approximately, $1,100 in cash bonds collected between April 2001 and March 2003 were not deposited and appear to be missing. These discrepancies were not detected on a timely basis due to numerous internal control weaknesses, little or no independent review, and a lack of adequate record keeping.
Also included in the audit are recommendations related to petty cash, personnel matters, accounting procedures, general fixed assets, board meetings, ordinances, capital improvement sales tax, and the Municipal Court.