The Sugar Creek Special Road District made some disbursements that may have been a conflict of interest. The district purchased an 8,000 gallon steel tank from a commissioner in February 2003 for $1,000 and did not obtain bid documentation. The district has never taken possession of this tank nor does it have the capability to move the tank to district property. The district made four payments totaling $609 to a local repair shop during the year ended December 31, 2007, without soliciting bids. Commissioner Lloyd indicated the repair shop was owned by his son and the vendor invoices were prepared by Commissioner Lloyd. The checks issued by the district were also signed, endorsed, and subsequently cashed by the Commissioner. In addition, adequate supporting documentation was not available for reimbursements of $245 made to Commissioner Lloyd..
The district does not have formal bidding policies, and bids were not solicited for various purchases. Additional controls and procedures over district disbursements need improvement.
Flooding caused significant damage to district roads in 2008, and as a result, the district was awarded $35,795 in Federal Emergency Management Assistance (FEMA) grants to repair and rebuild its roads. The district did not solicit bids for excavation and backhoe work performed to remove debris and reconstruct the roadway costing $7,165 and did not enter into a written agreement with the vendor. The district has not established a separate record keeping system to track disbursements related to each FEMA project as required. As a result, we were unable to determine all costs incurred related to each FEMA project.
The district exchanged services for work performed by the Secretary/Treasurer and does not have plans to include the value of the exchange on the Secretary/Treasurer's W-2 Form. In addition, documentation of time spent was not tracked to support the value of the work performed by the Secretary/Treasurer. Personnel files and employee withholding forms (W-4s) are not maintained for all district employees. The district does not withhold Missouri income tax from employee paychecks. The district Secretary/Treasurer is paid $175 a month; however, the district does not require her to prepare a timesheet, and timesheets of other employees are not signed by the employees. In July 2008, the board hired a temporary employee; however, instead of following the district’s normal payroll procedures, this employee was paid $319 cash by another employee and the district reimbursed the employee for his expense; therefore, payroll taxes were not withheld or reported to the Internal Revenue Service.
Accounting duties are not adequately segregated, and receipt slips are not issued for monies received. Also, the Secretary/Treasurer does not prepare and document bank reconciliations for district bank accounts.
The district's 2008 and 2007 budgets were not accurate and complete, and actual disbursements of the road district exceeded budgeted amounts. The road district does not furnish disbursement information to Barry County for publication of the road district's financial statement. The district has accumulated a significant cash balance without any specific documented plans for its use in an annual maintenance plan. In addition, it is unclear why the district obtained a $47,606 loan for equipment when it had approximately $200,000 in available funds.
Meeting minutes did not always include sufficient detail of matters discussed. District business appears to be frequently conducted outside of regular open meetings. District officials indicated notices of meetings did not include tentative meeting agendas, and the district did not retain copies of some meeting notices. The district does not have a formal policy regarding public access to district records.
The district does not have formal written policies regarding the sale and installation of culverts and does not charge district residents for the cost of installation. Records are not maintained to document culverts sold to ensure all amounts are billed to applicable residents. The district does not collect retail sales tax on culverts sold to individuals and businesses. Inventory records are not maintained to account for supplies and materials purchased or stored for the daily operations of the district.
The district does not maintain complete and current records for its capital assets including land, buildings, equipment, and other property. The district has not obtained property insurance coverage to safeguard the building and land the district owns
Friday, July 10, 2009
Conflicts of interest noted in state audit of Sugar Creek
Conflicts of interest involving a commissioner from the Sugar Creek Special Road District in Barry County are spelled out in a state audit issued today. The cover letter for the report is printed below: