YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2006-50

August 2006

The following findings were included in our audit report on the City of Bosworth, Missouri.

 The city of Bosworth does not maintain a fund ledger for its General Fund showing the beginning balances, monthly revenues by source and expenditures by type, and ending balances.  The city does not separately account for its water service activity and has not established a separate fund or separate accounting for motor vehicle-related revenues received from the state, and does not monitor the use of these funds to ensure compliance with state law. 

Because the city has not established procedures for the review of the work and records of the city clerk's office, numerous recording errors made were not detected and/or corrected. As a result, the city's bank account and checkbook register for its General Fund account are in disagreement.  Additionally, the City Clerk does not perform a monthly  reconciliation of the bank balance to the accounting records and does not prepare a receipt log and/or receipts slips for monies she collects.  Blank checks are sometimes signed in advance by the Mayor and City Treasurer and checks were sometimes written when sufficient funds were not available in the city's checking account.

The duties performed by the City Collector are not adequately segregated, and there is no independent review of the City Collector's controls, records, and procedures.  Additionally, errors were found in calculations of some property taxes due.  Additions and abatements to the tax records are made by the City Collector rather than the board, and  monies received are not deposited in a timely manner.  According to the City Collector, she may only make two deposits during busy months.  The City Collector does not prepare appropriate reports for the board as required by state law including a detailed annual report, an annual list of delinquent taxes, and a monthly report of delinquent tax collections. 

In 2005, water and trash collections totaled almost $58,000, however there is no independent oversight of the water clerk's activities.  Although the City Clerk makes the deposit, the water clerk does not receive a validated deposit slip to compare to her records. The water clerk does not perform monthly reconciliations of total billings, payments received, and amounts remaining unpaid for the water/trash services and such receipts are generally deposited only once a month.  The water deposits recorded on city records are not reconciled to monies in the bank.  In addition, effective January 1, 2006, the city increased fees paid by residents for trash services without having approval of the board.

The city does not prepare and adopt annual budgets in accordance with state law.  In addition, actual expenditures exceeded budgeted amounts in the General Fund by almost $10,000 for the year ended December 31, 2005.  It appears the board did not detect the overspending because budget to actual comparisons are not prepared and reviewed by the board prior to approving expenditures.

The appointment of the Mayor's wife as City Clerk is questionable.  The mayor's wife was first appointed as City Clerk by a former mayor in 1997.  However, when the current Mayor was first elected in April 2001, he reappointed his wife as City Clerk.  The city's board minutes did not indicate that the board voted on this reappointment. 

The city does not have a formal bidding policy.  The decision of whether to solicit bids for a particular purchase is made on an item-by-item basis.  Overall, it appears the city bids very few items.  In addition, the city did not solicit proposals for its engineering services.  For the year ended December 31, 2004, the city paid almost $30,000 for engineering services related to the city's waterworks and sidewalk improvements.   Also, the city did not always have formal written agreements with individuals providing services to the city.   

Also included in the report are recommendations related to financial reporting, payroll and personnel matters, minutes, meetings, and ordinances, and capital assets.

Complete Audit Report