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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-32
May 11, 2000
The following problems were discovered as a result of a review conducted by our office of the Department of Agriculture.
As noted in our three previous audits, the Department of Agriculture has established several bank accounts outside the state treasury. The monies were deposited into bank accounts to fund various conferences, process payments to exhibitors at the state fair, and facilitate the operation of the AgriMissouri Market at the state fair. The audit noted seven bank accounts with deposits to these accounts totaling more than $294,000 annually. The department has no authority to open accounts outside the state treasury. Constitutional and statutory provisions require state funds to be held and disbursed by the State Treasurer. By maintaining program funds outside the state treasury, the department increases the risk that monies may be misused. Problems were noted regarding these various accounts.
� Cash collected for registration fees and the monies used for change at the 1998 Governor's Conference on Agriculture were not deposited to the bank account resulting in a shortage of at least $1,713. Control weaknesses such as untimely depositing, not reconciling receipt records to deposits, not recording all receipts to the registration system, and a lack of supervision allowed this shortage to occur and remain undetected until our audit.
� The annual Governor's Conference on Agriculture is funded in part by donations. The department actively solicits these contributions, and according to department records, totaled $19,400 during fiscal year 1999. Many of the companies and organizations on the list of contributors are licensed, inspected, and/or regulated by the department. Actively soliciting donations from these companies gives the appearance of, and may result in, a potential conflict of interest.
� Receipts records related to the AgriMissouri Market bank account were not adequate. One person was primarily responsible for preparing and making deposits, preparing and signing checks, and performing bank reconciliations. This person was also responsible for contacting and placing orders with companies, computing retail prices, tracking product inventory, and settling with companies after the fair by returning unsold products and issuing checks for products sold. Because of the minimal supervision and inadequate controls and records, the department has no assurance all monies received were deposited and payments to companies were appropriate.
The Agriculture Development Fund (ADF) was established with Rural Rehabilitation Program assets of the United States Department of Agriculture (USDA). An agreement between the USDA Farmers Home Administration and the Missouri Department of Agriculture requires the funds to be used for direct or indirect assistance to Missouri farmers. Assistance programs include interest rebates, loans, loan guarantees, and scholarships. On June 30, 1999, the ADF balance totaled approximately $4.2 million and approximately 1,590 loans and loan guarantees were outstanding. We noted some concerns with the administration of the fund and the related programs.
� One crop and livestock loan recipient is the daughter of a Department of Agriculture employee who serves as an ADF loan representative. Although the recipient appears to have met all award criteria and employees were aware of the relationship, the department did not clearly document the relationship in the applicant's file.
� In one instance, the department awarded a $500 scholarship to an applicant who reported no family farm income, although family farm income is required for participation. While the department indicated information was obtained to resolve questions as to eligibility, this additional information was not documented in the applicant's file.
� In another case, a $20,000 alternative agricultural enterprise loan to an applicant for a retail hog venture was noted which does not appear to meet the department's criteria for an alternative agricultural enterprise. Additionally, the use agreement with the USDA prohibits the purchase of conventional livestock.
� No written agreement exists with the custodial bank for the fund's investments.
The purpose of the Livestock Enforcement Program is to ensure the control of livestock diseases in Missouri. Livestock enforcement officers may issue citations to those suspected of violating animal health regulations. The citations are reviewed by the Enforcement Officer Supervisor and State Veterinarian, the appropriate fine determined, and a letter sent to the offender. The offender is given the option of paying the fine by a specified date or appearing at an administrative hearing to contest the citation. Our review revealed that some citations are not reviewed on a timely basis. Additionally, the numerical sequence and ultimate disposition of citations are not accounted for properly.
The Missouri Department of Agriculture, Division of Weights and Measures did not perform some of its required inspections of commercial scales and petroleum dispensing meters at service stations.
The department has not formally evaluated its vehicle needs despite obtaining significant funding to replace a portion of its vehicle fleet, vehicle usage logs are not prepared for some vehicles, and the assignment of department vehicles to specific employees appears unnecessary or inefficient in some cases.
