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. 2005-78
October 2005
During our audit of the Twenty-Second Judicial Circuit, city of St. Louis, Missouri, Circuit Clerk's Special Interest Fund, we identified the following problems.
We were requested to audit the Circuit Clerk's Special Interest Fund by the Honorable John J. Riley, Presiding Judge, and by the Honorable Mariano V. Favazza, Circuit Clerk.
During the period July 1, 2002 through February 28, 2005, the Circuit Clerk's Special Interest Fund received $708,543 in revenues and expended $970,675, and at February 28, 2005, the fund had a cash balance of $142,518. The Circuit Clerk has not prepared budgets for the Special Interest Fund and has not turned over the balance of the Special Interest Fund to the city as required by state law since June 2001. The Circuit Clerk determined the Special Interest Fund would be used to support computer and accounting services for the office, reimburse the city's payroll costs for city workers hired to supplement the clerk's staff, and the balances would be retained for unexpected expenses or budget shortfalls. However, various state laws require the office to prepare comprehensive budgets and to transfer unused monies to the city's treasury.
The Circuit Clerk did not adequately monitor the acquisition and use of computer services. The Circuit Clerk paid over $557,000 from the Special Interest Fund and over $600,000 from city general revenue funds for computer services during the period July 1, 2002 through February 28, 2005. The computer services were provided by two firms, a private computer company and Regional Justice Information Service (REJIS), a quasi-governmental entity. Both firms had provided computer services to the Circuit Clerk's office since at least 1990. The private computer company's contract expired June 30, 1999, and the REJIS contract expired June 30, 2002. After the contracts expired, the Circuit Clerk's office continued to utilize the services of both firms. Bids were not solicited for these computer services, and no written agreements were established upon expiration of the contracts. However, the fees paid to the two firms were increased while other options for retaining or replacing the existing system were explored.
The Circuit Clerk's Information Technology (IT) Manager was to review all of the computer services bills to determine the services had been requested and the hours were billed in accordance with the agreed-upon rates. The IT manager indicated that he scanned most of the invoices but did not always document his review. As a part of our audit, we requested the IT manager again review the vouchers and invoices. After numerous discussions with clerk and vendor personnel, it was determined 12 hours of programming services, at a cost of $1,020, had been overbilled. While the amount of questioned billings was relatively small, compliance with established control procedures could have prevented any overbillings.
At February 28, 2005, the Circuit Clerk was holding over $8.8 million in monies related to civil and criminal cases filed with the court prior to 1999, and over $644,000 in child support monies collected prior to 2001. Approximately 84 percent of the Special Interest revenues collected during the audit period were generated as a result of the Circuit Clerk continuing to hold these undistributed monies. The Circuit Clerk's efforts to distribute the civil monies reduced the balance of those funds from about $8.6 million at June 30, 2002, to about $7.6 million at February 28, 2005. There has been no attempt to address the criminal monies of over $1.2 million collected prior to 1999 or the child support monies held during the audit period. It appears the Circuit Clerk has not dedicated adequate resources to distributing these old monies. The failure to distribute monies in a timely manner has been noted in audit reports for the Office of Circuit Clerk dating back to 1986.
In 2001, the Circuit Clerk hired a former accounting employee under a "personal services" agreement to perform "temporary" accounting services to identify and assist in distributing the old, held monies. The Circuit Clerk did not solicit bids for these accounting services nor document the reasons bids were not solicited. During the audit period, the accountant was paid about $121,400 from the Special Interest fund.
During the audit period, the office's records indicated the accountant's work resulted in the identification and distribution of over $1.6 million from both the pre and post 1999 civil cases. In 2003 and 2004, the accountant, in conjunction with the private computer company and the Circuit Clerk's staff, developed two computer system enhancements that would speed up distribution; however, these enhancements have not been fully implemented. These enhancements were used to assist with distributing 49 percent of the $1.6 million. Fully automating these functions and using selective criteria to determine large groups of cases to which they could be applied would likely address the majority of old civil cases and result in correct distributions of most of the $7.6 million in old civil monies.
The Circuit Clerk has not solicited bids for banking services since 1999 and did not monitor the interest paid on the bank accounts. Our audit found an underpayment of interest of $88,564. After we brought this error to the Circuit Clerk's attention, the bank was contacted and a check was issued to correct the underpayment of interest.
In addition to computer, accounting, and banking services, we noted the Circuit Clerk failed to solicit bids or document why bids were not solicited for 7 items purchased with Special Interest Fund monies, costing more than $2,000 each, and totaling nearly $61,000.