October 1, 2009
Missouri Releases Findings of Biennial Scotland County Audit
The biennial audit of Scotland County government was recently completed by the Missouri State Auditor’s office which highlighted a number of findings for officer holders and the public.
State Auditor Susan Montee indicated the scope of the audit included, but was not necessarily limited to, the two years ended December 31, 2008.
Officers reviewed minutes of meetings, written policies and procedures, financial records, and other pertinent documents while interviewing various personnel of the county, as well as certain external parties and testing selected transactions.
The objectives of the audit were to evaluate the county’s internal controls over significant management and financial functions. The audit also reviewed the county’s compliance with certain legal provisions and the economy and efficiency of certain management practices and operations, including certain revenues and expenditures.
This was not a financial audit. That part of the two-year review is being performed by McBride, Lock & Associates, Certified Public Accountants, whose report will be available at a later date.
The state auditor’s office released five audit findings following the completion of the Scotland County audit.
The audit highlighted the county’s failure to post notice for the August 2, 2007, closed session meeting of the county commission. In addition, for two of the three closed session meetings held during the 2 years ended December 31, 2008, the open meeting minutes did not document the related vote for closing the meeting or cite the specific statute and subsection allowing the closure.
The county was again found to be lacking in record keeping for open meetings of the commission, as cited in previous audits.
The report stated the County Commission open meeting minutes do not always include sufficient detail of matters discussed or actions taken, and it appears many motions passed are not included in the meeting minutes. Under the Sunshine Law minutes are required to include, but not be limited to, the date, time, place, members present, members absent, and a record of votes taken. In addition, the minutes should provide details regarding discussions that take place during meetings. Complete and accurate minutes are necessary to retain a record of the business conducted and actions taken by the commission.
The Scotland County Commission provided the following response to the finding:
We plan to implement the recommendation. We will also have Sunshine Law training through the Attorney General’s office in September 2009.
We will work to include all motions in the minutes. The details of discussions could be marginally improved, which we will try to do.
In another finding, the audit noted the county’s controls over fuel use are not adequate. During the two years ended December 31, 2008, the road and bridge department spent approximately $268,000 on fuel for 17 trucks and various equipment (such as graders, tractors, and loaders). The county purchases fuel for non-diesel vehicles by using fuel cards at a local gas station and it purchases diesel in bulk and maintains two tanks on county property.
The road and bridge department does not maintain any type of fuel logs in the vehicles or equipment, nor does it maintain fuel inventory records or logs of fuel dispensed at the county’s bulk fuel tanks.
The auditors noted that by not maintaining inventory records and fuel logs, the road and bridge department cannot reconcile fuel purchases made during the month to fuel used and on hand.
Complete fuel inventory records and use logs are needed to compile data required to perform effective reviews and reconciliations. To monitor the reasonableness and propriety of fuel use and disbursements, fuel logs should be maintained and periodically reviewed. Recorded use should be reconciled to fuel purchased and on hand. Failure to account for fuel use could result in theft or misuse going undetected.
The audit also pointed out that mileage logs that include the purpose and destination of each trip and beginning and ending odometer readings are not maintained by the road and bridge department to document the use of county-owned vehicles.
Complete and detailed mileage logs for all county owned vehicles should be maintained, and a review of these records should be periodically performed.
The county commission issued the following response:
We will put a log in every vehicle and piece of machinery to track fuel usage and mileage. We will also reconcile the logs to the fuel purchases made.
A third finding revealed that the County Clerk does not prepare or verify the accuracy of the current or delinquent tax books. The County Collector extends and prints the tax books and tax statements and verifies the accuracy of amounts to be collected. Because the County Collector is responsible for collecting property tax monies, good internal controls require someone independent of that process be responsible for generating and testing the accuracy of the property tax books.
The County Clerk provided the following response to the auditors:
I will start preparing the current and delinquent tax books.
A fourth finding cited the county for inadequate computer systems security. The audit stated password and backup procedures are not adequate in some county offices.
The County Commission provided the following responses:
We will work with the other officials to establish user identifications and passwords and ensure passwords are changed every 30 days.
We will work with the other officials to ensure backup data is tested and periodically taken off-site.
The County Treasurer provided the following response:
Backups are now taken to a bank lockbox weekly.
The final audit finding highlighted the Sheriff’s office procedures related to bank reconciliations, receipts, deposits, inmate costs, contracts, and change funds.
The Sheriff’s office processes monies for conceal and carry permits, civil fees, bonds, trailer inspections, phone commissions, calendar sales, and receipts intended for inmates. Receipts totaled approximately $56,000 and $75,000 for the years ended December 31, 2008 and 2007, respectively.
The audit stated monthly bank reconciliations are not performed.
“Our review of four months of activity in the Sheriff’s bank account and the respective monthly transmittals made to the County Treasurer noted each month had an unidentified balance of approximately $140. Monthly reconciliations would have revealed the unidentified balance and allowed the necessary corrections to be made on a more timely basis,” the audit report stated.
The audit found that deposits are not made timely. During the 2 years ended December 31, 2008,deposits were made one to three times per month and averaged approximately$2,900. To adequately safeguard receipts and reduce the risk of loss or misuse of funds, all receipts should be deposited on a timely basis.
It also recommended that the sheriff’s department periodically review the costs of housing inmates and establish billing rates sufficient to recover costs. In addition, the Sheriff and the County Commission should ensure written contracts are obtained for all services.
The Sheriff provided the following responses:
Bank reconciliations are now performed monthly. The unidentified balance is currently being investigated.
Deposits are now made at least weekly. Cash bonds are deposited the same day they are received.