Report No. 2007-69
November 2007

Complete Audit Report

A review of audits of fire protections districts in St. Louis County has been completed. This review covered the reports for the years ended December 31, 2006 and 2005.

Fire protection districts in St. Louis County are required by law to have biennial audits performed if revenues exceed $50,000. The State Auditor received, reviewed and accepted 21 reports for the year ended December 31, 2006, and 22 reports for the year ended December 31, 2005. Only two of the 21 reports for the year ended December 31, 2006 and four of the 22 reports for the year ended December 31, 2005 were received after the June 30 statutory filing deadline.

The Kinloch Fire Protection District failed to comply with state law and did not have an audit performed or file annual reports. Based on bank records provided by the district, total receipts were $103,000 for the year ended December 31, 2006. No information was provided for the year ended December 31, 2005.

The Normandy Fire Protection District did not submit an annual report for the year ended December 31, 2006 and has indicated that in April 2007, the board voted to change its fiscal year end to June 30.

In 2006, 16 of 21 districts had increases in their General Fund balances; and the aggregate General Fund balance of all districts increased by 11.1 percent. In previous reviews, it was noted that several districts had large General Fund balances in relation to expenditures. For 2006, the ratio of unreserved, undesignated fund balance to expenditures increased for 11 of the 21 fire districts. Although many districts reserved a portion of their General Fund balance for capital improvements and future years' operations, five still had unreserved fund balances greater than one year's cost of operations. As noted in prior reports, the districts should annually re-evaluate the propriety of their tax levies to ensure that excess revenues are not being received and accumulated.

Six districts that have total General fund balance to expenditures ratios greater than one also have Capital Projects Funds with balances of over $1 million for the year ended December 31, 2006.

Based on the pension plan notes in the audit reports, eight of the 11 districts with defined benefit plans do not have enough estimated actuarial assets to cover the estimated actuarial liability (pension benefits) in their Pension Fund, resulting in an unfunded liability.

Fifteen districts have outstanding bond debt at December 31, 2006. Four of these districts issued general obligation bonds totaling over $7.5 million in 2006 and 2005. In addition to the outstanding bond debt, two districts have outstanding certificates of participation (COPS).

Also included in the report are over 60 specific recommendations made by independent auditors to improve the overall management of the fire districts. These recommendations included concerns regarding expenditure procedures, various accounting records and procedures, investments, capital assets, pledged securities, budgets, payroll and employee benefits. Of the 63 recommendations made during the 2005 audits, 22 were repeated in the 2006 reports.

Complete Audit Report