04/08/2024 - Jefferson City, MO
A new report issued today by
Missouri State Auditor Scott Fitzpatrick details how poor budgeting procedures
and lacking oversight have produced a deficit balance in the General Fund in
the tens of thousands of dollars and worsened the financial condition of the
City of Dixon. The audit, which gives the city a rating of "poor,"
was initiated by concerned citizens who gathered and submitted 242 valid signatures
to successfully petition the State Auditor's Office.
"I know many of the residents of the City of Dixon have concerns
about the way the city is being run and our audit shows city officials have
failed at one of their most essential duties - crafting a balanced
budget," said Fitzpatrick. "City leadership has a lot of work to do
to restore the city to a healthy financial status and regain the trust of the
people who want to see their tax dollars used responsibly. I am encouraged the
city is working to put our recommendations into place and I urge them to stay
the course until they are operating in a way that is efficient, effective, and
transparent."
The audit report shows how the city's General Fund balance has been
quickly drained as it has declined from a balance of $94,714 on October 1,
2020, to negative $20,701 on September 30, 2022. The city projected the General
Fund balance to decrease further based on the budgeted receipts and
disbursements for the year ended September 30, 2023. The city has also placed
itself at risk for a lawsuit by failing to comply with bond covenants as it
transferred $100,000 from the Water Fund to the General Fund that was
originally intended as a temporary loan to help maintain the cash balance of
the General Fund.
The report also highlights the city's failure to have adequate
procedures in place to prepare and monitor budgets. In addition to failing to
include all the statutorily required elements in the city budgets prepared for
the years ending September 30, 2023, and 2022, city officials budgeted for
significant deficit balances for the General Fund for both of those years. When
considering the beginning fund balance and the budgeted receipts and
disbursements, the city projected ending fund balances for the General Fund of
negative $116,776 and negative $61,843 for the years ending September 30, 2023,
and 2022, respectively. Even with a budget amendment to the 2023 General Fund
budget, the city still faced a projected ending deficit balance of negative $82,126.
Another finding in the audit details
how the city has failed to establish policies for the selection of vendors
providing professional services, and does not have a formal bidding process. A
selection and test of 17 expenditures totaling $226,349 found the city did not
solicit bids or proposals for 2 vehicles ($48,825), sewer maintenance ($8,760),
office remodeling services ($6,630), police equipment ($4,014), street
improvement services ($3,000), and legal services ($2,078). Additionally, the
city did not obtain written contracts for sewer maintenance, office remodeling,
street improvement, and legal services expenditures reviewed. The city also purchased a house and small lot
for a price of $21,000 without obtaining an appraisal to ensure the city paid a
reasonable and approximate fair market value for the property.
The audit report also found the city neglected to perform monthly
reconciliations of gallons of water billed to gallons of water pumped. A
comparison of reports of water usage to water pumped for March 2022 found an
unidentified difference of approximately 39 percent more water pumped than
billed. A comparison of September 2022 reports found the city had pumped 45
percent more water than it had billed. City officials responded by saying a
significant amount of the water use was from the sewer plant and fire district,
which aren't metered. The audit recommends all properties be metered and the
city perform monthly reconciliations to ensure all water usage is properly
billed. Additionally, the audit found the city violated state law by not
obtaining annual audits of the water and sewer services.
Other findings in the report highlight how the city has failed to
develop an annual maintenance plan for city streets, and how the Board of
Aldermen has failed to consistently comply with the Sunshine Law requirements
for closed meetings, has not filled a vacant alderman position, and members of
the Board have not always filed financial disclosure statements as required by
law.
The complete audit of the City of Dixon can be found here.
