YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

September 2005

Report No. 2005-63

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Mercer, that do not have a county auditor.  In addition to a financial and compliance audit of various county operating funds, the State Auditor's statutory audit covers additional areas of county operations, as well as the elected county officials, as required by Missouri's Constitution.

This audit of Mercer County included additional areas of county operations, as well as the elected county officials.  The following concerns were noted as part of the audit:

• The County Clerk and County Treasurer do not reconcile their accounting records on a monthly basis.  As a result, both officials' records were inaccurate at times and varied from actual receipts, disbursements, and cash balances per audit.  In addition, semi-annual settlements prepared by the County Treasurer were not accurate and actual receipts and disbursement amounts reported on the budget by the County Clerk did not agree to her financial records.  Had the County Clerk and County Treasurer made attempts to reconcile their records, the errors noted could have been detected and corrected in a timely manner.

• The County Commission approved expenditures in excess of budgeted amounts for several funds during the years ended December 31, 2004 and 2003.  Apparently, budget to actual reports are not adequately monitored.

• The county and Health Center did not adequately track or report federal assistance on the schedule of expenditures of federal awards.  Spending on their major program, Highways Planning and Construction, was overstated by approximately $31,000 and five other non-major programs were not reported.  The Health Center failed to report vaccines distributed by the state Department of Health and Senior Services.

• Bidding procedures are not adequate, resulting in several instances where bids were not solicited by the county.  Duplicate payments were made to several vendors as invoices are not marked paid.  Additionally, actual itemized charge receipts are not usually submitted for credit card charges.

• Several possible conflicts of interest among county officials were noted.  A former Associate County Commissioner indicated he abstained from approving a contract with a local rock quarry from which he receives royalties, but the abstentions were not documented in the minutes.  Payments were made to relatives of some other county officials , however, decisions were not clearly documented in commission minutes.
   
• The salary of a deputy county clerk was not taken into consideration when calculating the administrative transfers from the Special Road and Bridge Fund to the General Revenue Fund.  In addition to making the maximum administrative transfer, approximately $17,000 in salary and fringe benefits were paid from the Special Road and Bridge Fund to this deputy.

• The daily business of the County Commission is not adequately documented in the minutes and documentation of notices for meetings are not retained.  In addition, minutes were not always prepared for closed meetings as required by law.

• The county has reduced excess property tax collections from prior years, but still has not sufficiently reduced its levy for the amount of sales tax collected.

• Health Center credit card bills are not paid timely, resulting in late fees and finances charges being incurred.  Backup computer disks of financial information are not stored off-site and a formal contingency plan has not been developed.  Documentation of notices for meetings are not retained, minutes of closed meetings are not prepared, and open minutes did not always document the related vote to close the meeting, reasons for closing the meeting, or the final disposition of some matters discussed in closed session.  In addition, capital asset records are in need of improvement.

• The Ex Officio County Collector does not issue receipt slips for current tax payments or partial payments on delinquent taxes and documentation of the transmittal of current tax payments to the township collectors is not maintained.  The County Clerk does not maintain an account book with the Ex Officio County Collector and the bond amount for the Collector is less than required by law.  In addition, the interest rate earned on the Ex Officio County Collector's bank account is considerably less than what is paid by the county's depository bank.

Also included in the audit were recommendations related to salaries and personnel matters, general capital assets, usage logs for county vehicles, township controls and procedures, computer system controls, and Sheriff's procedures.

Complete Audit Report