Report No. 2010-124
October 2010
Complete Audit Report

Findings in the audit of Northeast Ambulance and Fire Protection District

Financial Condition and Accounting Records
The district's financial condition has rapidly declined in the past 2 years. Cash balances have declined approximately $2.3 million (54 percent) from June 30, 2008, through June 30, 2010. While receipts have generally remained constant, an increase in spending has led to the decline in the district's financial condition. From July 2008 through October 2009, the prior Board approved several large disbursements which appear to have contributed to the district's declining financial condition, including: administration building ($512,000), ambulances ($367,500) and attorney fees ($335,479). In addition, from calendar year 2007 to 2009, salaries increased by $965,286 or 28 percent.

District records were not complete. The district did not maintain adequate accounting records to determine book balances of the various funds until July 2010 and has not determined amounts due to/from various funds.

Sick Leave
The district allows employees to use sick leave in excess of sick leave balances. As of July 2010, three employees had negative sick leave balances. One employee had a negative balance of 610 hours, which equals approximately $13,036. Per the Fire Chief, in January 2010, this employee entered into a verbal agreement with the Board to take unearned leave in the following months and then pay $125 to the district each pay period to repay the unearned leave; however, as of July 2010, no payments have been deducted from her paycheck, nor have arrangements been made to withhold payments from her check. This agreement appears to be a loan from the district to the employee and as such could be in violation of the Missouri Constitution.

Disbursement Procedures
Board approval of disbursements is not documented and lists of bills approved for payment do not include electronic payments and payroll disbursements. Also, the Board does not account for the numerical sequence of checks listed for approval.

Follow-Up on Prior Audit Findings
The report includes follow up on actions taken by Northeast Ambulance and Fire Protection District on findings in the Management Advisory Report (MAR) of Report No. 2009-131, Northeast Ambulance and Fire Protection District, issued in November 2009, for the year ended June 30, 2008. Seventeen of our prior recommendations have not been implemented, fifteen have been implemented, and thirteen have been partially implemented.

Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov