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. 2006-82
December 2006
The following findings were included in our audit report on the City of Pine Lawn, Missouri.
The Missouri State Auditor's Office has been petitioned by the citizens of Pine Lawn to audit the city three times in the last eleven years. Of the 37 recommendations reported in 2000 (Report no. 2000-108), only 6 were implemented and another 6 were partially implemented. Twenty-one findings were not implemented and the remaining 4 no longer applied. Multiple recommendations in this report are repeated from previous audit reports issued by our office.
The city of Pine Lawn is in poor financial condition and there was no evidence that the elected officials are providing the guidance and controls necessary to ensure the continuing operations of the city. Accounting records and financial reporting do not exist and, therefore, the Board and Mayor are unable to monitor and control the city's finances. In addition, controls over receipts and disbursements are poor, increasing the risk that monies could be misappropriated or misspent without the Board and Mayor's knowledge.
The city's General Revenue Fund balance has decreased from over $208,000 at December 31, 2002, to just under $50,000 at December 31, 2005. In addition, the city has transferred over $239,000 from other accounts to cover General Revenue disbursements and payroll. As of March 2006, the city is in arrears on payments totaling over $218,000.
Court receipts to the city do not agree between court and city receipt records and deposits and there are no reconciliations performed between the two receipt ledgers. Also, the composition of bond receipts is not recorded in the bond receipt ledger and deposited monies are not reconciled to the bond receipt ledger. Receipts totaling $4,355 collected by the city through the municipal court and police department in May 2005 could not be traced to deposits.
No record of receipts is maintained in the city’s general ledger computer system; however, General Revenue bank deposits totaled almost $2,000,000 in 2005. No check ledger was maintained and disbursements totaling $850,750 had no detail such as vendor name, check number, date, amount, and purpose recorded in the city's accounting system for the period of February 2005 through August 2005. General Fund disbursements per the bank for 2005 totaled approximately $2,300,0000. The city administrator indicated checks were written from the city's system, but the check information was not retained. As a result of this lack of records, the city has no accounting record indicating the amount of cash available at any time. No bank reconciliations have been performed for several months and those supposedly performed prior to April 2005 could not be located. Also, the city has 12 bank accounts; however, several of the accounts are not utilized and accounting and record keeping duties are not adequately segregated.
The city has not prepared and adopted budgets or financial statements. In addition to being required by law, these reports would help the city to monitor and control their financial condition.
During 2005 and 2006, the city did not enter into written contracts for various services. In addition, the mayor entered into contracts for insurance and trash services totaling over $430,000 without obtaining Board approval.
The city does not have a formal written bid/request for proposal policy. During 2005 and 2006 bid/ proposals were not solicited for several different services. Additionally, several invoices were not submitted to the board for approval, invoices were not always paid timely, and some disbursements were not supported by invoices. Also, the city withheld but did not properly pay out more than $3,000 from employee checks for child support and garnishments.
The city does not have a formal policy regarding cellular phone usage. From January 2005 through April 2006, more than $12,900 was paid as usage for 12 cellular phones, with $7,160 of this being fees for exceeding plan minutes.
The city is not separately accounting for trash operations and, as a result, cannot determine if the trash service is breaking even or losing money. In addition, the city does not have adequate procedures to pursue collection of delinquent trash fees. As of June 30, 2006, the city had approximately $507,350 in delinquent trash fees. According to city records, over 70 customers owe more than $1,000 in trash fees.
The Municipal Court receipts average over $200,000 per year. A monthly listing of bond open items was not prepared and reconciled with the bond account cash balance. Upon our request, a list was prepared; however, the Court Clerk indicated most of the bonds on the list were old and probably closed. Also, bonds collected by the police department are not transmitted to the Court Clerk on a timely basis, and deposits are not made timely. The Crime Victim's Compensation and Peace Officer Standards and Training fees collected by the municipal court have not been disbursed to the state since September 2004. Finally, the court has not established procedures to pursue the collection of delinquent accounts and failure to appear cases. As of June 30, 2006, court records indicate that delinquent accounts total approximately $378,000.
Also included in the report are recommendations related to planning and financial reporting, seized property, meeting minutes and ordinances, and city property records.