YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2005-65

September 2005

IMPORTANT:  The Missouri State Auditor is required by state law to conduct audits once every 4 years in counties, like Morgan, 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 Morgan County included additional areas of county operations, as well as the elected county officials.  The following concerns were noted as part of the audit:

• Various federal program expenditures were not included on the 2004 Schedule of Expenditures of Federal Awards (SEFA) resulting in an under statement of approximately $162,000.  Without an accurate SEFA, federal financial activity may not be audited and reported in accordance with federal audit requirements which could result in future reductions of federal funds.

• The County Commission approved an expenditure of approximately $10,000 from the Special Road and Bridge Fund for repaving the Justice Center parking lot and  the anticipated financial condition was not adequately projected for the Neighborhood Improvement District (NID) Ongoing Construction and Maintenance Fund.  Published financial statements did not include all financial activity for the Senior Services and Senate Bill 40 Funds or bonded debt information for the Justice Center and various NID projects.  The current compensatory time policy does not address all necessary aspects such as maximum accumulation of compensatory time for some employees which could result in the county’s liability for compensatory time, which was approximately $20,000 at April 30, 2005, becoming even more significant.  Although expenditures of the Special Road and Bridge Fund exceeded $1 million, a formal road and bridge maintenance plan has not been prepared.  There are no current written contracts with the special road districts.

• The County Clerk does not maintain an account book with the County Collector or verify the delinquent tax books.  In addition, the County Collector and County Commission have not entered into a written agreement with the Tri-County Lodging Association to collect lodging taxes and collections and distributions of lodging taxes were not included on the County Collector’s annual settlements.

• A written policy related to the handling and accounting of fixed assets has not been developed.  In addition, a current listing of all county property has not been maintained, property tags have not been affixed to most county property, and annual physical inventories have not been conducted.

• There is no a written policy regarding the use of county owned vehicles.  In addition, concerns were noted regarding vehicle mileage logs, vehicle expense logs, personal usage logs, and the current mileage reimbursement policy.

• Accounting duties over bad check restitution monies are not adequately segregated in the Prosecuting Attorney’s office.  Concerns were noted related to controls over the accounting system for bad checks and court ordered restitution including untimely updates to the accounting system, errors in the bank reconciliation, failure to prepare and maintain open items listings, and the lack of procedures to routinely follow up on outstanding checks and old bank accounts.  In addition, fees were not always transmitted to the County Treasurer on a timely basis and expenditures totaling approximately $950 made from the Law Library Fund did not appear to be in accordance with state law.

• Accounting duties in the Sheriff’s office are not adequately segregated.  In addition, generic receipt slips are issued and checks and money orders are not endorsed immediately upon receipt.  Deposits are not made timely when the employee assigned that duty is absent for extended periods.  Procedures have not been established to routinely follow up on outstanding checks and old bank accounts.  Open items listings for inmate monies are not prepared and compared to cash balances.  Monies from commissions on inmate commissary purchases and telephone card sales are maintained by the Sheriff outside the county treasury. U.S. Marshals prisoners are not always correctly identified in the tacking system and the system does not always correctly compute the number of days held resulting in inaccurate billings. 

• Accounting duties over traffic monies processed by the Associate Circuit Division are not adequately segregated, open items listings are not performed in a timely manner, bank reconciliations for the bond account are not performed in a timely manner, and old outstanding checks and bond monies are not adequately investigated.  In addition, listings of accrued costs owed to the court are not maintained and monitoring procedures related to accrued costs are not adequate.

Other recommendations suggested improvements in computer controls, the Assessor’s receipting procedures and the County Clerk’s handling of vending machine proceeds.

Several officials agreed with the recommendations and indicated steps have already been taken to implement most recommendations or they are planning to do so.

Complete Audit Report