Report No. 2012-08
February 2012
Complete Report
Findings in the audit of the Monarch Fire Protection District
Retirement Incentive
It is the position of the State Auditor's office that some retirement incentives paid to employees as part of an early retirement package are a violation of the Missouri Constitution. In addition, as part of the retirement package, the district paid additional excessive health, vacation, and sick leave benefits. In an effort to reduce salaries and overtime expenses, due to the large amount of vacation earned and taken by senior employees, the Board approved a retirement incentive package, limited to the first seven employees to sign up. The Board gave additional compensation for years of service ($2,000 per year of service for the first employee and $1,500 per year of service for the next six employees), but the Missouri Constitution forbids granting any extra compensation to public employees for services already rendered. The additional health benefits of the incentive package could cost the district an extra $280,000 over the next 5 years. Because the incentive package allows the seven employees to remain on the district payroll while using accumulated leave time, they continue to receive district benefits even though they have effectively retired.
Expenditures
The district has not obtained proposals or written contracts for some legal services, making it difficult to ensure it is getting the best value and allowing the pension attorney to overcharge the district by approximately $4,300. The district spent over $212,000 on legal services during 2010.
The district spent approximately $26,000 for a service awards banquet in September 2011, which may not have been an appropriate use of district funds.
The district needs to improve its expenditure review and approval procedures. The district made a duplicate payment of $2,130 to the pension attorney and paid the wrong vendor $1,200 for cleaning supplies. In addition, the district's lobbyist is not required to submit written reports summarizing the lobbying efforts, and neither the lobbyist nor the pension attorney regularly provide invoices with sufficient detail of the hours worked or services provided.
Meeting Minutes and Public Records
The district did not document the reasons or the votes regarding meeting closure for 40 meetings between January 2010 and September 2011, as required by state law. On some occasions, the Board went directly into closed session without starting in open session, and on others there was no indication in the open meeting minutes that a closed meeting was held.
The closed meeting minutes did not sufficiently demonstrate issues discussed were allowable under the Sunshine Law. Some of the questionable topics include: how to respond to inquiries regarding the state audit, advertisement of the fire chief position, discussion of hiring a search firm for the fire chief position, the hiring process for firefighters, and an ethics resolution.
The district does not maintain a log of public Sunshine requests, making it difficult to document compliance with the Sunshine Law.
Salary Survey
The district did not include 18 senior and administrative positions in the 2008 salary survey of firefighters and emergency medical technicians, and it is unclear whether the salaries of these positions are in line with similar districts.
Bank Reconciliations
The Controller did not always perform bank reconciliations promptly and did not adequately investigate and resolve differences discovered. A $266,000 discrepancy was identified but not investigated until audit staff made inquiries. Although most of the discrepancy was attributed to a system conversion, a $2,200 variance remained unexplained.
District Procedures
The district needs to improve procedures and records for district property to protect assets from theft or misuse. The district does not regularly conduct an annual physical inventory of property and does not require written Board authorization for asset disposal. In addition, the district lacks effective monitoring procedures for fuel and vehicle use.
In the areas audited, the overall performance of this entity was Fair.*
American Recovery and Reinvestment Act 2009 (Federal Stimulus)
The Monarch Fire Protection District did not receive any federal stimulus monies during the audited time period.
*The rating(s) cover only audited areas and do not reflect an opinion on the overall operation of the entity. Within that context, the rating scale indicates the following:
Excellent:
The audit results indicate this entity is very well managed. The report contains no findings. In addition, if applicable, prior recommendations have been implemented.
Good:
The audit results indicate this entity is well managed. The report contains few findings, and the entity has indicated most or all recommendations have already been, or will be, implemented. In addition, if applicable, many of the prior recommendations have been implemented.
Fair:
The audit results indicate this entity needs to improve operations in several areas. The report contains several findings, or one or more findings that require management's immediate attention, and/or the entity has indicated several recommendations will not be implemented. In addition, if applicable, several prior recommendations have not been implemented.
Poor:
The audit results indicate this entity needs to significantly improve operations. The report contains numerous findings that require management's immediate attention, and/or the entity has indicated most recommendations will not be implemented. In addition, if applicable, most prior recommendations have not been implemented.
Complete Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
