YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2005-64

September 2005

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Lewis, 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 Lewis 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 financial condition of the General Revenue Fund has declined significantly since 2002.  During the years ended December 31, 2003 and 2004, disbursements of the General Revenue Fund increased due to capital improvements made to the courthouse.  In addition, during 2003, a tornado damaged several county businesses and as a result sales tax receipts for the General Revenue Fund decreased.

• The County Collector's accounting controls and procedures need improvement.  The Collector does not reconcile daily receipts and deposits to a daily abstract and does not perform reconciliations between the bank balance and related liabilities.  As of February 28, 2005, the cash balance was $4,228 less than the liabilities identified.  Also, the Collector does not ensure back property tax charges reported on the annual settlement agree to the total credits reported on the prior year's annual settlement.

In addition, the Collector does not perform adequate monthly bank reconciliations for the Collector Tax Maintenance Fund and expenditures from that fund are not adequately supported by invoices and in some cases appear questionable.  An erroneous payment of a personal cable bill was not reimbursed for 18 months and a $300 cash withdrawal was not supported.

• The county's procedures to track federal awards for preparation of the Schedule of Expenditures of Federal Awards (SEFA) should be improved.  The county's  SEFA contained several errors which resulted in expenditures being overstated  for the year ended December 31, 2004 and understated for the year ended December 31, 2003.  Without an accurate SEFA, federal financial activity may not be audited and reported in accordance with federal requirements.

• The county did not always solicit bids or retain bid documentation for various expenditures.  Additionally, the county distributed landfill fees to the Industrial Development Authority but did not obtain financial reports to show these fees were spent for economic development.

• The Sheriff's accounting controls and procedures need improvement.  The Sheriff's Office does not obtain receipt slips from the Associate and Circuit Courts for turnover of bond monies, does not obtain written contracts for the boarding of prisoners, and does not maintain adequate documentation of invoices sent to other entities for the boarding of prisoners.  Receipts are not deposited on a timely basis and the Sheriff failed to withhold $1,755 in accountable fees from a partition sale, which would have been paid to the County General Revenue Fund. 

Inmate account balances are not consistently verified prior to commissary orders being placed, commissary purchases are not always deducted from inmate account balances, and the balance of the commissary account is not being reconciled to the individual inmate balances plus commissary profits.  Order forms for cigarettes and phone cards are not always maintained in the inmate's file, commissary profits are not periodically turned over to the county, and inventory records are not maintained for cigarettes and phone cards purchased by the Sheriff's Office.

• The Circuit Clerk and ex officio Recorder of Deeds made several questionable disbursements from the Records Technologies Fund and the Records Preservation Fund during the period from February to June 2004. 

• Problems were noted related to the E-911 Board's accounting controls and procedures.  Closed meeting minutes were not always prepared.  Budget documents prepared by the board were not accurate.  Several receipting procedures relating to issuing receipts slips, restrictively endorsing checks and money orders, and making timely deposits should be improved.  Some expenditures were not approved by the board prior to payment, bids were not obtained for some purchases, several invoices were not paid in a timely manner, and there were no procedures in place to ensure Forms 1099 were filed.  Property records did not include a radio system purchased by the board and did not include all necessary information for other assets.  The E-911 Director handles receipts and disbursements and is not bonded.

• The Health Center's controls and procedures need improvement.  Actual expenditures exceeded budgeted amounts during 2004.  Pre-numbered receipt slips are not issued for some monies received, the composition of receipt slips is not reconciled to the bank deposits, and receipts are not posted to the general ledger in a timely manner.  Additionally, Health Center employees received payments that appeared to be bonuses. 

Also included in the audit were recommendations related to budgetary practices and payroll procedures.  The audit also suggested improvements in the procedures of the Prosecuting Attorney, Circuit Clerk, and Recorder.

Complete Audit Report