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. 2006-42
July 2006
The following findings were included in our audit report on the City of Pleasant Valley, Missouri.
The city needs to prepare an accounting manual for handling and recording financial transactions and records. There is little independent oversight or adequate segregation of duties related to the city clerk's office. The City Clerk can sign checks, and both the City Clerk and Assistant City Clerk are responsible for all record-keeping duties of the city. No personnel independent of the cash custody and record-keeping functions provide adequate supervision or review of the work performed by that office. In addition, many functions of the treasurer's and collector's offices are performed by the city clerk's office. Furthermore, receipts were not always deposited on a timely basis, bank accounts need to be consolidated, all funds need to be in interest-bearing accounts, and an account ledger needs to be maintained for the city's two escrow accounts.
The fiscal year 2005 budget did not include all information required by state law. For the year ended June 30, 2005, the city's actual expenditures exceeded the original and/or amended budgeted amounts of several funds. There is no documentation that the entire board reviewed and discussed the variance (budget to actual) report and there were significant differences between the ending balances on the semiannual published financial statement for the period ending June 30, 2004 and the beginning balances as of July 1, 2004.
The city does not prepare an annual maintenance plan for city streets. During the year ended June 30, 2005, the Street Fund expenditures totaled over $187,000.
The city's fire department handles calls for fire and ambulance services. For the year ended June 30, 2005, the city collected approximately $65,000 and $62,000 for ambulance services and fire department sales tax, respectively. The city has decided to use the sales tax revenues for fire department equipment. All other expenditures for the fire department, such as salaries and fringe benefits, volunteer expense, supplies, and training are paid through the General Fund. These expenditures totaled over $300,000 for the year ended June 30, 2005, with the majority of the expenditures related to personnel costs. The city contracts with an agency for the billing and collection of ambulance fees; however, the city does not maintain an accounts receivable ledger for ambulance services. In addition, the billing and payment records maintained by the Fire Chief are not complete or accurate. As a result, the amount of fees billed and paid and the accounts receivable balance cannot be readily determined. It appears the Fire Chief is not sending the billing information to the city's billing/collection agency in a timely manner. For example, we noted an instance when an insurance company rejected a claim as the time limit for filing had expired. The city needs to establish formal procedures outlining the criteria or specific procedures to be followed in writing off delinquent accounts deemed as uncollectible.
The time records maintained for both part-time and volunteer firemen need to be improved. The city is not properly accounting for its payments to the volunteer firemen and does not require the volunteers to account for the reimbursement of expenses. The board has not adopted an ordinance to set the current compensation of the Fire Chief. In addition, the board has not established the number of hours it expects the Fire Chief to work and does not require him to account for the hours he works.
The city does not have a formal bidding policy. Although the city did solicit bids for some purchases, bids were either not solicited or bid documentation was not retained for $10,000 for sewer maintenance, $5,401 for a riding lawn mower, $4,400 for two computers, and $6,348 for ambulance repairs. In addition, proposals for professional services totaling almost $20,000 were not obtained. The city does not require its employees to account for cash advances and return any unused funds. In addition, the city does not report the advances on the employee's W-2.
The city appears to have circumvented the intent of state law when establishing the term of office and compensation of the City Clerk. The city re-defined the term of office and salary during the time for which a City Clerk was appointed. State law requires the City Clerk's salary, duties and term of office be established by ordinance, and the clerk's salary should not be changed during the time of his/her appointment.
Also included in the report are recommendations related to financial reporting, payroll and personnel matters, minutes and meetings, capital assets and the municipal court.