Report No. 2011-65
September 2011
Complete Report
Findings in the audit of Pemiscot County
Financial Condition and Budgets
Several county funds are in poor financial condition, and poor budgeting practices have made the financial condition worse. As noted in our prior audit report, the financial condition of the county is weak. The General Revenue, Special Road and Bridge, and Assessment Funds continue to deteriorate and operate with negative cash balances. The county is using other funds, including restricted funds, to cover the negative balances. Despite its poor financial condition, the county gave its employees raises in 2010 totaling $68,400. The county has not transferred administrative service fees from the Capital Improvement Sales Tax Fund, does not identify and pursue all inmate and dispatching fees, and has not billed some cities for their share of assessment costs. Though noted in our prior audit, the county still approves deficit budgets for several funds, which is in violation of state law.
Property Taxes
The County Collector does not always deposit receipts timely and intact, increasing the risk of loss, theft, or misuse of funds. Neither the County Clerk nor the County Commission adequately reviews the activities of the County Collector.
Payroll
Timesheets were not available for some county employees, making it difficult to document hours worked, leave taken, and compliance with the Fair Labor Standards Act. As noted in our prior audit report, the county does not maintain centralized records of leave balances, and several employees had negative vacation and/or sick leave balances.
Capital Assets and Vehicles
As noted in previous audit reports, the county needs to improve its capital assets procedures; it does not tag, inventory, or track capital assets properly. As also noted in our prior audit report, the county does not adequately monitor vehicle and fuel use. The county does not maintain mileage and fuel use logs or reconcile fuel used to fuel purchased.
Protested Tax Distribution and Legal Fees
The county did not enter into agreements with various political subdivisions before withholding property tax payments for taxes and legal fees relating to a protested tax case. Rather than requiring the school district to return $1.17 million to a county business when a protested tax case was settled in favor of the business, the county paid $1.06 million to the business and withheld the August 2009 tax payment to the schools and directed the school to pay the remainder to the business. Likewise, the county paid the legal fees for the protested tax case and recouped a majority of the fees from the political subdivisions by withholding tax distributions on a pro rata basis.
County Treasurer Fees
The previous County Treasurer was paid almost $50,000 in the 2 years ended December 31, 2010, from drainage district funds because of a large increase in federal funds. Ordinarily, the County Treasurer would receive about $1,000 a year from drainage district funds. The county should check with legal counsel and the federal grantor agency to find out whether federal funds should be included in calculating this fee and if this fee was an allowable expense under the federal program.
Sheriff Inmate and Commissary Monies
The numerical sequence of receipt/transaction numbers used to track inmate commissary transactions is not accounted for properly. As noted in our prior audit report, detailed bank reconciliations are not regularly performed and discrepancies resolved, and month-end liabilities are not reconciled to cash balances.
Prosecuting Attorney
Bad checks fees and court-ordered restitution are not transmitted timely to the County Treasurer or victims. Over $11,000 was on hand during our cash count, and checks and money orders are not restrictively endorsed immediately, which increases the risk of loss, theft, or misuse of funds.
Additional Comments
Because counties are managed by several separately-elected individuals, an audit finding made with respect to one office does not necessarily apply to the operations in another office. The overall rating assigned to the county is intended to reflect the performance of the county as a whole. It does not indicate the performance of any one elected official or county office.
In the areas audited, the overall performance of this entity was Poor.*
American Recovery and Reinvestment Act 2009 (Federal Stimulus)
During the 2 years ended December 31, 2010, the county was awarded:
A $328,769 Recovery Act: Edward Byrne Memorial Justice Assistance Grant Program/Grants to State and Territories, which was received and expended to retain 4 deputies and cover operational costs. The grant does not require these positions be maintained at the end of the grant period.
A $107,440 Recovery Act: Homeless Prevention and Rapid Re-housing grant was paid directly to the county's sub-recipient, Delta Area Economic Opportunity Corporation, to help homeless families and those at risk of becoming homeless.
A $250,000 Recovery Act: Facility Renovation and Magnetic Resonance Imaging (MRI) Project grant was paid directly to the county's sub-recipient, Pemiscot County Memorial Hospital.
A $300,000 Recovery Act: Facility Renovation and MRI bond was paid directly to the county's sub-recipient, Pemiscot County Memorial Hospital.
*The rating(s) cover only audited areas and do not reflect an opinion on the overall operation of the entity. Within that context, the rating scale indicates the following:
Excellent:
The audit results indicate this entity is very well managed. The report contains no findings. In addition, if applicable, prior recommendations have been implemented.
Good:
The audit results indicate this entity is well managed. The report contains few findings, and the entity has indicated most or all recommendations have already been, or will be, implemented. In addition, if applicable, many of the prior recommendations have been implemented.
Fair:
The audit results indicate this entity needs to improve operations in several areas. The report contains several findings, or one or more findings that require management's immediate attention, and/or the entity has indicated several recommendations will not be implemented. In addition, if applicable, several prior recommendations have not been implemented.
Poor:
The audit results indicate this entity needs to significantly improve operations. The report contains numerous findings that require management's immediate attention, and/or the entity has indicated most recommendations will not be implemented. In addition, if applicable, most prior recommendations have not been implemented.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
