(From State Auditor Scott Fitzpatrick)Missouri State Auditor Scott Fitzpatrick today released a follow-up report for the City of Purcell that finds the city is still working to implement many of the recommendations made by a 2022 audit that gave the municipality a rating of "poor." The original report was initiated by a citizen petition and led to the former Mayor Pro Tem being charged with stealing after uncovering more than $3,200 in missing or misappropriated money.
The follow-up report looks at 19 of the recommendations made in the original audit and finds the city has implemented only 4 of them. While the city has partially implemented 10 of the recommendations, it has failed to implement the other 5.
"Given the significant weaknesses that were uncovered in the original audit, the city had a long and difficult path to regain the trust of the people, but the audit provided a roadmap for city officials to follow to make sure that kind of mismanagement doesn't happen again. I am glad to see the city has made progress in implementing some of the recommendations in the original report, but they have additional work to do to make sure the city is not vulnerable to potential fraud and waste," said Fitzpatrick. "I appreciate the city officials being receptive and responsive to our recommendations and hope they will work quickly to put all of them into place."
One of the major recommendations made in the original audit was for the Board of Aldermen to segregate accounting duties and implement appropriate reviews and monitoring procedures. The follow-up report finds that no formal procedures have been put in place to segregate accounting duties and while the Board of Aldermen does review a balance sheet and profit/loss report, it does not review bank statements for the city's two bank accounts. The audit also recommended requiring dual signatures on city checks and the follow-up finds some checks have been issued with only one signature, as well as checks issued to the Mayor and City Treasurer that were signed by themselves.
The original audit report also found the city failed to obtain an annual audit for its water and sewer system. The follow-up finds the city has continued to fail to obtain an audit, but the City Treasurer has contacted an accounting firm to conduct one. The follow-up report finds the City has not adequately addressed the need to issue official pre-numbered receipt slips for all payments received. A review of deposits made on Nov. 14, 2023 found the proper receipt slips were issued for only one of the five receipts deposited and the deposit was not timely. Additionally, the city has yet to develop a formal annual street maintenance plan and has not implemented the recommendation for the city to maintain an up-to-date official ordinance book.
The report notes the city worked with law enforcement officials to address the $3,233 in misappropriated or missing money. The former Mayor Pro Tem was charged with a class D felony of stealing in the amount of $2,588, and pleaded guilty to an amended charge of a class A misdemeanor of stealing. The former Mayor Pro Tem paid restitution in the amount of $2,588 and the remaining money owed was written off by the city. The city has also implemented the recommendations to submit annual financial reports to the State Auditor's Office as required by state law, and to publish semiannual financial statements as required by law.
The report details how the city has only partially implemented recommendations to obtain bond coverage for personnel with access to city money, ensure adequate documentation to support all payroll transactions and other disbursements, prepare and monitor annual budgets and financial data, establish procedures to ensure aldermen possess the qualifications for holding office, and that the Board of Aldermen maintain complete and accurate meeting minutes for all meetings.
The original audit of the City of Purcell can be found here. The follow-up report is available here.
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