04/02/2024 - Jefferson City, MO
An audit released today by Missouri State Auditor Scott
Fitzpatrick gives Pierce Township, located in Texas County, a rating of "fair"
and highlights the failures of township officials to budget responsibly and
provide accurate financial statements. The audit, which makes several
recommendations for improvements to the township's administration, was initiated
after 94 residents signed a petition requesting the State Auditor's Office to
review the township's finances.
"I appreciate the
residents of Pierce Township investing their time and effort to make this audit
possible and I hope our final report gives them the kind of detailed
information they need to better understand the strengths and weaknesses of
their township government," said Fitzpatrick. "The "fair" rating
is indicative of the fact there are several areas where the Board of Directors
can make significant improvements to make the township run more effectively and
efficiently. I'm encouraged to see they are taking our recommendations
seriously and hope they will implement them as quickly as possible."
The audit report details how the
township's budgets for the years ended December 31, 2022, and 2023, did
not include all statutorily required information and were not approved by the
Board. In the 2022 budget, the only revenue budgeted was interest and neither
the 2022 nor 2023 budgets included estimated ending cash balances. In 2022,
budgeted disbursements, totaling $81,277, exceeded budgeted revenues, totaling
$53, by $81,224. The estimated beginning cash balance on January 1, 2022, was
only $69,053, which resulted in a deficit budget balance of $12,171.
Additionally, the township failed to publish complete and/or accurate financial
statements.
The report also details
how the Board of Directors does not review and approve disbursements before
payments are made and does not have supporting documentation for all
disbursements made. The report also found the former Township Treasurer
outsourced payroll services to a bookkeeper without Board approval and the
bookkeeper was paid by the township without having a written contract with the
Board. Additionally, the Township Treasurer failed to perform monthly bank
reconciliations, which led to errors in the general ledger that were not
identified by township officials. The audit identified more than $12,500 in
checks and deposits that were not recorded in the general ledger. After the
errors were corrected there remained a difference of $5,798 between the general
ledger cash balance and the bank balance, which were identified and corrected
by the township's bookkeeper. The report also found the Treasurer's
reports presented to the Board each month did not reflect all financial
activity of the township and cash balances reported were inaccurate.
The Board also failed to solicit bids
for major purchases in accordance with state law, and violated the Missouri
Constitution by providing year-end bonus payments of $100 to both township
employees. Additionally, the Board classified township officials as independent
contractors rather than employees for income tax purposes without documenting
the reason for the decision, and violated the Missouri Constitution by giving
an employee $800 of bereavement pay.
While the primary duty of
the township form of government is to maintain the county roads located within
its borders, the audit found Pierce Township has not developed a formal annual maintenance plan for township roads.
The report notes the Board President indicated he monitors employees' work
but had not considered the importance of a documented plan. The audit recommends the Board establish a
formal annual road maintenance plan that will provide a means to more
effectively monitor and evaluate the progress made in the repair and
maintenance of roads throughout the year. The Board indicated in its response
that it has already started the process of developing a plan.
The audit report also finds the
township needs to develop a records
management and retention policy that includes electronic communication in compliance with the Missouri Secretary of State Records
Services Division guidance, and properly document
the passing of official township records to successor officers when elected or
appointed to office as required by state law.
The
complete audit of Pierce Township is available here.