Report No. 2009-47
May 2009
Complete Audit Report
The following findings were included in our audit report on the city of Ozark:
Since 2004, the city of Ozark and the Ozark Land Clearance for Redevelopment Authority (LCRA) have spent approximately $4 million on the Finley River Neighborhood Development District redevelopment project. Our review of the project identified questionable bidding practices and agreements that did not adequately protect the financial interests of the city. Litigation between the city and the original developer resulted in the city paying a settlement and obtaining ownership to property within the development. In addition, the city's financial condition has been impacted by the delays experienced in completing the project. Our review of this project also identified approval dates on some resolutions, ordinances, and contracts conflicted with board meeting minutes, the city and LCRA incurred excess interest costs on the purchase of property, and the city did not adequately document why some properties were purchased for more than appraised value. Potential conflicts of interest and an ineligible LCRA board member have been identified related to the redevelopment project, and the LCRA has not filed an annual report of its activities as required by law.
Bids were not solicited for some purchases in accordance with the city's procurement policy. The city's procurement policy does not establish time frames for which threshold amounts will apply, and fails to distinguish the handling of professional services such as legal, accounting, and engineering from other city purchases.
The city's Parks and Recreation Board paid $1.5 million for approximately 58 acres to build a sports complex without obtaining an appraisal on the property. Some disbursements of the city did not appear to be prudent and necessary uses of public funds. The city has not established a comprehensive food policy or regulations regarding city provided food. Prevailing wage rates are not adequately monitored by the city and the city had to pay an additional $2,918 for wages in a settlement agreement with the Missouri Department of Labor and Industrial Relations. The city has not evaluated the cost and distribution of cellular telephones and has no formal written policy regarding use.
Better controls and procedures are needed in the handling of city receipts by the various city departments. Several city collection points do not always record and reconcile the method of payment received to the composition of the monies deposited or transmitted to the city treasurer. Utility payments are not posted to the computerized accounting system in a timely manner. Accounting duties are not adequately segregated in some city departments nor are there periodic supervisory reviews in these departments to compensate for the lack of segregation. Additionally, the city has not developed adequate procedures to ensure adjustments made to utility accounts are proper, and some petty cash disbursements are not adequately documented.
Monies collected by the city's parks and recreation department for the annual Rubber Duck and Kinetic Kontraption Race are not deposited in the city treasury and neither the Board of Aldermen nor the Parks and Recreation Board monitor these funds. At September 30, 2008, approximately $20,000 in race proceeds were being held by a non-profit organization in Springfield. Additionally, adequate supporting documentation was not maintained for cash prizes distributed including a $5,000 first place award given in cash, and prize amounts were not properly reported to the Internal Revenue Service for income tax purposes.
The city needs to implement better controls over credit cards by establishing a written credit card policy. Many credit card purchases we reviewed did not have adequate supporting documentation and were not adequately reviewed and approved.
Board meeting procedures and minutes of the Board of Aldermen, LCRA Board, and Parks and Recreation Board need improvement. Procedures for handling and documenting closed meetings are not always in compliance with state law. Additionally, the city clerk could not locate some closed session minutes of the Board of Aldermen and the LCRA Board. Some meeting minutes did not always include sufficient detail of matters discussed or votes taken and were not legible. Further, the LCRA Board has not followed its own by-laws regarding the election of officers.
Controls over the city's 72 vehicles are not adequate. The city does not have a comprehensive vehicle use policy. Vehicle mileage and fuel logs are not maintained for most city vehicles. The city allows 13 employees to take city vehicles home at night, but does not track or report the value of personal automobile (commuting) use as compensation. Of these 13 employees, 8 live between 6 and 40 miles (one way) from the city limits. The city has not documented the benefit of allowing these individuals to commute in city owned vehicles.
The city failed to retain adequate documentation for the calculation of a substantial increase in water rates. The city had not increased water rates for approximately 7 years prior to the increase. Additionally, the city's procedures for contracting with other political subdivisions could be improved, and the city's 2008 budget did not include all information required by law.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
