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YELLOW SHEET Office of the State Auditor of Missouri |
March 10, 2004
Report No. 2004-21
The following problems were discovered as a result of an audit conducted by our office of the City of Wright City, Missouri.
Between
January 2002 and July 2003, city receipts totaling at least $5,764 were not
deposited in the city's bank account.�
These missing monies represent cash receipts which were received by the
city but not deposited.� The missing
funds were not detected on a timely basis due to numerous record keeping
deficiencies and internal control weaknesses and additional monies may have
been received and not deposited that were not discovered during the audit
process.
Numerous problems were noted concerning accounting controls and procedures.� The duties of receiving, recording, and depositing monies collected by the city are performed primarily by the accounts receivable clerk and are not adequately segregated, and no reconciliation is performed between the composition of receipt slips issued by the city and the monies deposited.
Receipts
are not deposited on a timely basis.�
Bank deposits were generally made only once a week.� On August 8, 2003, we counted $13,958 in cash
and checks at city hall which had not been deposited.� Most of the money had been held three to four
days.� Additionally, some monies
collected were not recorded and deposited upon receipt, including: building
permit checks totaling $6,860, $715 in checks and $190 in cash for park
reservation� receipts, and two checks
dated in November 2002, totaling $100 and $50 cash stapled in the conditional
use building permit files.
Bank reconciliations performed during 2002 were not complete and accurate.� As of December 31, 2002, bank reconciliation records showed $6,234 more in the bank than the city general ledger.� The prior City Clerk did not correct the errors, or investigate the differences between the reconciled bank balances and the ledger balances in a timely manner.� In addition, from January to August 2003 no bank reconciliations were performed.
Numerous
weaknesses were found in the city's water, sewer, and trash billing
system.� The city is using General Fund
monies to subsidize the cost of trash collections.� Also, there is no supporting documentation or
independent approval of utility credit adjustments.� All city employees with access to the city's
computerized billing system have the ability to record credit adjustments to
the computer system without documenting each adjustment.� Total adjustments during 2002 and 2003 were
$22,149.� In July 2003, credit
adjustments totaling $3,390 were made to two utility accounts held by the same
customer.� There was no documented
explanation of why these adjustments were made.
Periodic
reconciliations of total billings, payments received, and delinquent amounts
are not performed for the water, sewer, and trash services.� The city is unable to perform such a
reconciliation, in part, because not all trash service billing was performed
through the computerized billing system.�
We noted ten instances totaling $4,785 in which trash billing was done
on two-part unnumbered forms.�
Additionally, the city does not compare the number of water meter
deposits to the number of water billing accounts to ensure water deposits have
been collected and recorded for all applicable water customers.� The city informed us that in one apartment
complex only 37 of 64 apartment units had recorded water deposits.
While the city has established formal procedures regarding the handling of delinquent water, sewer, and trash accounts, these procedures are not being followed.� As of October 31, 2003, water, sewer, and trash accounts receivable totaled approximately $36,700.� Of this total, $19,269 represented accounts that were over three months delinquent.
The
city needs to develop a new long range comprehensive plan for city expansion
and planning including zoning, economic development, city sewer and water
systems, and city streets.� Additionally,
an annual maintenance plan for city streets should be prepared.
Numerous
problems were noted regarding city budgets and financial reporting.� City budgets were not approved on a timely
basis, disbursements were approved in excess of the budgeted amounts for
various funds, annual financial reports were not filed with the State Auditor's
office, and the city had not obtained an annual audit since fiscal year 1999.
Numerous
problems were also noted in the city disbursement procedures.�� No one independent of the disbursement
process reviews invoices and compares the approved accounts payable list to
actual checks written, the city does not have a formal bidding policy nor a
formal written purchasing policy, and vendor invoices or other supporting
documentation were not always properly retained.� Also, the city does not have written agreements
in place regarding payment of the city attorney, cemetery caretaker or Cemetery
Memorial Society.�� Additionally, there
are no formal contracts with Warren County regarding prisoner board bills, or
the Warren County Council on Aging for the meals on wheels program.
The audit also includes some matters related to board meetings and records, personnel records and policies, and city property records which the city should consider and take appropriate corrective action.
