(From Missouri State Auditor Thomas Schweich)
Findings in the audit of the City of Lanagan
Missing Funds
Thousands of dollars of city monies are missing, and the city should work with law enforcement to prosecute the person(s) responsible and recover the missing amounts. The auditors identified over $13,600 in missing cash receipts and believe another $2,800 in property tax receipts is missing, and it is likely additional monies are missing.
Excess Court Revenues
The city failed to turn over approximately $36,000 in excess traffic ticket revenues to the Missouri Department of Revenue, as is required by state law, and the Police Chief continued to report certain traffic stops as being on city streets even after the audit staff informed him it was improper.
Financial Condition
The city is in poor financial condition, and elected officials are not taking the necessary steps to address the city's finances. At December 31, 2010, the city owed almost $84,000, and only had approximately $17,600 in available funds. Despite this, the city hired a new employee and gave raises to existing employees.
Accounting Controls and Procedures
The city's poor accounting controls and procedures, including the lack of segregation of duties, inadequate controls and absence of proper oversight allowed the missing funds to go undetected. The city lacks procedures to properly account for licenses and fees, accurate accounting records are not maintained, and $805 was removed from the petty cash fund but there is no documentation to show what happened to it. The city should consider reducing the number of bank accounts it maintains ( nine checking and three savings) to reduce the number of transfers between accounts and opportunities for error. The city does not regularly backup its computer system and store the backups offsite.
Water and Trash Services
The city's water supply infrastructure has severely deteriorated, and the city lacks the resources to upgrade it. The city should segregate utility system accounting duties, investigate large water losses, review its water rates, and enforce delinquent penalties. The city used refundable water deposits to pay city expenses, and the fund is short by more than $10,000.
City Disbursements
The city did not solicit bids for trash services and does not have an adequate written agreement with this vendor. The city contracted with an engineering firm, but had no documentation showing it evaluated and considered competitors. The city lacks procedures to properly calculate, collect and remit sales taxes, and does not adequately document and approve disbursements. The city does not pay its bills on time and has been charged late fees, finance charges, and overdraft fees.
Restricted Funds
The city does not properly allocate expenses among its restricted funds and has spent Law Enforcement Training fees on items not allowed by state law.
Property Tax Collections
The Board of Aldermen did not properly protect city records, and the tax records disappeared from City Hall. The city paid the former City Clerk $802 in property tax commissions, but it is not clear whether these payments were appropriate. The Board of Aldermen does not review and approve property tax reports, and accurate delinquent tax lists are not maintained.
Payroll Procedures
The city does not maintain personnel files for its employees, and some time records were not available. The city does not maintain adequate documentation of leave balances, and the Police Chief and the former City Clerk both received unsupported payments for leave. The city did not properly report all wages on W-2 forms and paid its federal payroll taxes late, which cost the city $885 in penalties and interest.
Financial Statements, Budgets, and Audits
The city does not regularly publish semi-annual financial statements, submit annual financial statements to the State Auditor's office, or obtain annual audits.
Ordinances and Meetings
The city does not maintain a complete and orderly set of ordinances. The city needs to improve meeting minutes and ensure Sunshine Law compliance by limiting closed meeting discussions to allowable topics.
Capital Assets
The city does not maintain capital asset inventory records, tag assets for identification, or conduct annual physical inventories. The city had no documentation to support how it disposed of three city vehicles.
Does no one care?
ReplyDelete