Report No. 2009-107
October 2009
Complete Audit Report
The following findings were included in our audit report of Bates County.
The county's financial condition has deteriorated in several of its larger funds. The poor financial condition of the Law Enforcement Sales Tax Fund, which was noted in our prior report, has continued to deteriorate. In addition, the cash balances of the General Revenue Fund and Special Road and Bridge Fund have declined significantly since 2005. While the cash balances of these three funds did improve in 2008, projected ending balances for the Law Enforcement Sales Tax Fund and Special Road and Bridge Fund were still quite low. Additionally, the county faces a significant potential liability as a result of accumulated vacation and compensatory leave for personnel of the Sheriff's office. Some deputies have accumulated over 300 hours of leave. A significant cause of the decline in the Special Road and Bridge Fund was the use of road monies to subsidize emergency management functions in the county from 2004 to 2007. The county began handling emergency management funds in the Special Road and Bridge Fund in 2004, rather than through the General Revenue Fund. The county spent $204,500 more than it received during that period on emergency management functions.
Several county fund's budgets were overspent during 2007 and 2006 and monitoring of budget to actual reports is not consistently performed for all county funds. County officials did not always solicit bids, document sole source procurement situations, or retain bid documentation for various purchases. In addition, the county did not adequately plan for construction of the courthouse tower or the funding of the project, have a professional engineer determine the scope of the project before bidding, or maintain adequate records to track the on-going cost of the project. The accounting records reflect the county paid almost $1.5 million for the project through June 30, 2008, with another $110,000 due to the contractor. Controls over fuel purchases also need to be improved.
Accounting duties in the Sheriff's office are not adequately segregated, receipts are not deposited intact on a timely basis, and some receipts from court paper service fees are not recorded until they are deposited. The method of payment received is not always noted on receipt slips, which does not allow the composition of receipt slips issued to be compared to the composition of deposits. The Sheriff does not maintain either a balance in the manual check register, or a cash control ledger to account for the monies in his fee account. As a result, monthly bank reconciliations could not be performed. The Sheriff does not have procedures to ensure all monies received are properly disbursed. Commissary profits and telephone commissions were transferred from the inmate account to the fee account, rather than disbursing these monies to the county treasury, and several purchases made from the fee account do not appear to be prudent or necessary uses of public or inmate funds. Various problems were also noted regarding the handling of inmate monies and commissary activity. The inmate account balance is not reconciled to the total of the individual inmate balances and any remaining commissary proceeds and commissary and phone card commission profits are maintained outside the county treasury. In addition, problems were noted with Sheriff's office and law enforcement related disbursements, including lack of contracts for housing prisoners for other entities.
Controls over property tax additions and abatements are not adequate and the County Clerk does not maintain an account book or other records summarizing property tax transactions and changes. No evidence was provided to indicate procedures are performed by the County Clerk or the County Commission to verify the County Collector's monthly or annual settlements.
The county needs to improve its policies and procedures related to County Commission meeting minutes. The official County Commission meeting minutes are not printed and approved by the County Commission timely. Open minutes did not always document the vote for closing the meeting and the minutes did not always cite the specific statute and subsection allowing the closure.
The Prosecuting Attorney continues to violate state law by maintaining custody of the Prosecuting Attorney Bad Check Fund and some disbursements from this fund appear questionable. During 2007 and 2006, the Prosecuting Attorney authorized payments from the fund totaling $350 and $300, respectively, to his employees as bonuses. The Prosecuting Attorney maintains custody of the Prosecuting Attorney's Federal Forfeiture Fund, which is used for law enforcement purposes. Missouri Attorney General's Opinion No. 45, 1992, to Henderson states the Prosecuting Attorney of a third-class county is not authorized to maintain a bank account for law enforcement purposes separate from the County Treasurer. We also had concerns over the handling of some void restitution checks, which were added back to the account and are retained as an "overage" amount, rather than being disposed of in accordance with state law.
The report also includes recommendations related to payroll and county property records, as well as recommendations to the Public Administrator and Senate Bill 40 Board.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov