YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2004-53
June 29, 2004
The following problems were discovered as a result of an audit conducted by our office of the City of Strafford, Missouri.
Cash receipts totaling $2,597 that were collected by the City of Strafford Municipal Court from October 1, 2002 thru November 24, 2003, were not deposited. Cash and check amounts recorded on the municipal division's receipt slips did not agree to transmittal spreadsheets prepared by the Court Clerk, or to the actual amounts deposited. Additionally, some checks actually deposited were not recorded and were apparently substituted for the missing cash receipts, including two checks dated December 2002. In other instances, some checks deposited were not recorded on the transmittal spreadsheet and were never found recorded. These missing funds were not detected on a timely basis due to various internal control weaknesses including little or no review by someone independent of the Court Clerk, lax cash receipting procedures and no periodic reconciliations of liabilities.
Bank reconciliations were not prepared for the city's seven bank accounts. Unreconcilable differences have continually existed between the various bank account records and the general ledger accounts. Although the independent auditor's engagement letter estimated audit fees of $5,000 for the year ended September 30, 2002; the city paid over $20,000, primarily due to the independent auditor's performance of bank reconciliations for the twelve month period which was being audited. The City Clerk was untimely in posting city transactions. An $80,528 expenditure for the purchase of a police department building made on November 7, 2003 was not posted to the accounting records as of February 11, 2004. Also, the Board of Aldermen did not always receive monthly financial reports, and the city has not designated a City Treasurer. As a result of these weaknesses, there is less assurance that all city monies have been accounted for properly.
Bids were not always solicited by the city in accordance with their own procurement policy. Bids were not solicited or bid documentation was not retained for items including: a touch read meter system, $67,053; lift station relocation, $32,704; and a comprehensive plan for future street, water and sewer, and park projects, $22,050. City ordinance requires all expenditures greater than $3,000 and less than $100,000 to be authorized by the City Administrator; however, the position of City Administrator has been vacant since December 31, 2002, and city ordinances have not been updated. Additionally, the city has also spent approximately $80,000 to implement a new meter reading system which was supposed to be in place by July 2002 which has yet to be implemented.
The city does not perform monthly reconciliations of total amounts billed, payments received, and amounts remaining unpaid for its utility system. In addition, daily reports of utility payments received were not always retained, and there is no independent approval of credit adjustments posted to the utility system. The city does not monitor its water usage on a monthly basis. Further, the city has not performed a formal review of the water and sewer rates since 1996.
Also included in the report are recommendations related to restricted revenues, budgets, financial statements, written contracts, board minutes, personnel matters, city ordinances, maintenance department, property records, and seized property.