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YELLOW SHEET Office of the State Auditor of Missouri |
November 14, 2000
Report No. 2000-117
The
accounting and financial records for Berkeley have severely declined since
1996.� In March 2000, former Governor
Mel Carnahan requested an audit.� The
findings of our audit fall into eight categories: overall accounting records,
police and fire pension fund records, property tax rates, receipt and
disbursement procedures, expenditures, city credit cards, payroll processes and
municipal court actions.� City officials
agreed with our recommendations and are already instituting several of
them.� The following summary highlights
our findings.
Poor records leave city unable to monitor financial status
Berkeley
officials have not been able to adequately monitor the financial condition of
their city due to poorly maintained records, an inaccurate general ledger, no
monthly financial activity reports and untimely bank reconciliations.� Several factors contributed to these issues:
vacancies in the city manager and finance director positions, disputes within
the city council, and a lack of cooperation or communication between city
officials.� The city�s outside
accounting firm began disclosing these significant accounting problems in
1997.� Due to the state of the city�s
records, the outside accounting firm has had to perform routine accounting
functions usually left to a city staff.�
Pension fund records not maintained
The city has not obtained an actuarial study since 1996 to
determine the long-term financial condition of the Police and Fire Pension
Fund.� In addition, city officials have
not recorded some fund transactions, regularly invested pension revenues or
prepared accurate records of employee�s contributions and balances.� Because all of an employee�s pension fund
contributions are refunded to the employee, it is imperative the city have
current and accurate employee statements.
Our
audit also questioned the Pension Board�s travel expenditures, which included
pension-related conference trips to Las Vegas, Lake Ozark and Phoenix.� These trips totaled nearly $15,000 in
expenses paid by the fund.� Some board
members were reimbursed for travel expenses in addition to receiving a $60
daily allowance.
City overcharged taxpayers
$575,000
Berkeley set its property tax rate too high, according to state law,� and in turn overcharged it residents $575,000 in property taxes from 1997 to 1999.� In April 2000, the city decided to refund the money. Rather than mailing a check, residents seeking a refund had to bring their paid tax receipts to city hall, a method which is not equitable to all residents.� As of June 2000, the city had only returned about $20,000.
One employee records,
stores, prints and signs checks
To safeguard against possible
loss or misuse of funds, the city needs to segregate the duties of printing and
signing checks from recording check information into the computer.� One employee is responsible for all of these
duties.� In addition, there is no
written policy for issuing manual checks to help prevent unauthorized uses.
Some city officials
reimbursed for travel expenses above allowance
The city reimbursed several
individuals for meals and other costs in addition to the $50 per diem payment
for travel-related expenditures.� In one
case, the city paid a hotel bill for a trip that included a $40 room service
charge, even though the city had already reimbursed $350 to the individual for
the same trip.
Officials do not pay for
personal celluar phone calls
The city does not have a
formal written policy on cellular phones and does not require officials to pay
for personal calls.� City officials said
the cellular phones are used for both personal and business use, with all costs
paid by the city.� During one month, a
city council member incurred 1,433 minutes in excess of the free minutes
provided by the monthly service plan.
Social Security
withholdings not reported
The city did not report city
employee wages and withholdings for 1997 and 1998 to the Social Security
Administration.� The city had corrected
the 1998 omission, but had not corrected the 1997 omission.
Municipal court bonds
not regularly deposited, arrest warrants not timely activated
Receipts are not transmitted to the city or deposited in the bond bank account on a timely basis,� open items are not properly accounted for, the checking account is not reconciled to the court records, and some bond account checks are signed in advance.�� The court had not properly disposed of some bonds, recorded the disposition of numerous cases on the computer system or activated arrest warrants in a timely manner.
Complete Audit Report