YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2004-45

June 2, 2004-45

The following report is our review of the General Assembly and Supporting Functions - House of Representatives.

The Missouri State Auditor's Office has a constitutional responsibility to audit the General Assembly and periodically conducts audits of the House of Representatives. 

In February 2003, the House Committee on Administration and Accounts unanimously passed a resolution authorizing the Chief Clerk to solicit bids for financial and compliance, economy and efficiency, and performance audit services for the period      July 1, 1999 to December 31, 2002.  The House subsequently issued a request for proposals (RFP) for these audit services and in May 2003 accepted a proposal from a private auditing firm.  According to House officials, this audit was ordered because of the change in House leadership which occurred in January 2003.

Notice of the RFP's issuance was not widely distributed.  The Chief Clerk indicated the RFP was advertised on the House website and several auditing firms were directly notified of the RFP.  However, that official did not maintain documentation of which firms were contacted.  Of the two auditing firms that submitted proposals in March 2003, neither proposal met the requirements of the RFP in certain respects.  For example, neither proposal initially received specifically included economy and efficiency objectives and one of the proposals did not submit a firm, fixed price, both requirements of the RFP. Despite this, the House entered into further negotiations with both firms for the audit services.  The proposal ultimately accepted did not include specific economy and efficiency objectives/procedures and the audit fee agreed to was based on a cost range rather than a firm, fixed price.

The House was billed the total costs of the audit, $56,035, in June 2003, at the conclusion of fieldwork.  Even though the RFP specified that payment of the audit costs would not  be due until after completion of the final audit report, the House had a check cut in late June 2003 and released it to the auditing firm in September 2003, prior to the delivery of the final audit report in November 2003.  The audit invoice did not detail the hours worked or rates charged to the House for the audit, and the House paid this invoice without requiring additional documentation supporting the amount billed.

The costs incurred for this audit were not necessary.  In March 2003, our office offered to work with the House leadership to address their audit needs and reduce audit costs; however, no request was made to our office for these audit services.

Various concerns were noted regarding House personnel policies and related matters.

The House does not require its employees to work a minimum of 40 hours per week as is required of employees of most other state agencies.  The minimum number of work hours per month is calculated by multiplying seven times the number of working days in the month.  As a result, House employees are only required to work a 35-hour work week.  Additionally, House policy provides that its employees earn ten hours of annual leave benefits per month during the first five years of service. After five years, the employees earn annual leave at a rate of fourteen hours per month.  This policy provides annual leave benefits that are more generous than what is allowed to most other state employees and results in increased costs to the state.

A past House policy allowed employees to earn 16 hours of sick leave per month, rather than the 10 hours per month earned by most state employees and authorized by law.  In June 1994, the House revised its sick leave policy, reducing the amount of sick leave earned by its employees to 10 hours per month.  However, the House has continued to certify excess accumulated sick leave balances for terminating employees who earned sick leave at the higher rate prior to the 1994 policy change.  Unused accumulated sick leave is counted as creditable service by the state employee retirement system.  This situation has resulted in the payment of retirement benefits to some retired employees in excess of amounts authorized by state law.  A similar condition was reported in a previous audit  of the House.

The House provides compensatory time benefits to most full-time administrative staff, including employees in professional and high level administrative and supervisory positions.  Employees in comparable positions at most other state agencies are not provided these benefits.  At June 30, 2003, approximately 3,165 hours of unused compensatory time had been earned by director level staff or staff in high level administrative and supervisory positions.  House policy states that unused compensatory time earned will not be paid and will be lost if not used by the employee by December 31 of each year; however, in January 2002, the House implemented a shared leave policy which allows unused compensatory time to be donated to a pool for future use by any House employee who meets the shared leave policy usage criteria.  It appears any compensatory time lost by high level employees at the end of a calendar year was donated to the shared leave pool and represents a future potential liability and cost to the state.

The House allows the sale of  specified used office equipment (computers, printers, scanners, etc.) to departing representatives at amounts significantly below the original cost.   A similar practice had been discontinued at the time of the last audit; however, this practice was resumed based on a policy change approved in April 2002.  During the year ended June 30, 2003, the House sold fixed asset items with an original acquisition cost of $219,849 to outgoing House members for $15,873.  The auditors recommended the House consider disposing of all used or surplus property items through State Surplus Property.   

The audit also includes some matters related to the House's lack of a written procurement policy, some expenditures, and fixed asset records and procedures, which the House should consider and take appropriate corrective action. 

Complete Audit Report