YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

February 06, 2004

Report No.2004-11

The annual review of audits of fire protections districts in St. Louis County has been completed.  This review covered the reports for the year ended December 31, 2002.

Fire protection districts in St. Louis County are required by statute to have biennial audits performed if revenues exceed $50,000.  The State Auditor received, reviewed and accepted 22 reports for the year ended December 31, 2002.  However, five of the twenty-two reports were received after the June 30, 2003, statutory deadline, with two districts being over 75 days late.

In 2002, 12 of 22 districts had increases in their General Fund balances; however, the aggregate General Fund balance of all districts increased by only one percent, similar to 2001, and much less than the annual increases of up to 15 percent in 1991 to 2000.

In previous reviews, it was noted that several districts had large General Fund balances in relation to expenditures.  For 2002, fifteen districts had fund balance to expenditure ratios greater than one, which indicated the districts' fund balance was greater than one year's cost of operations.  Although many districts reserved a portion of their General Fund balance for capital improvements and future years' operations, six still had unreserved fund balances greater than one year's cost of operations.   As noted in prior reports, the districts should annually re-evaluate the propriety of their tax levies to ensure that excess revenues are not being received and accumulated.

Revenues of the Pension Funds decreased significantly in 2002 , similar to 2001, and apparently due to significant losses in investment earnings.    Many of the districts with defined benefit plans are having problems adequately funding their actuarial accrued liability and the sustainability of the pension funds may be in question.

Seven districts issued general obligations bonds totaling $26.5 million in 2002 to fund new construction, renovations, and equipment.  Total debt service fund tax levies increased significantly.

Also included in the report are over 100 specific recommendations made by independent auditors to improve the overall management of the fire districts.  These recommendations included concerns regarding expenditure procedures, various accounting records and procedures, investments and pensions, fixed assets, pledged securities, unclaimed property, budgets, payroll and employee benefits.  The individual districts should review all the recommendations and their applicability to their district.

Complete Audit Report