12/17/2020
Missouri State Auditor
Nicole Galloway today released an audit of the City of Raytown, located in
Jackson County. The audit was completed after citizens petitioned for a review
of the city's finances and operations. In response to the audit, the city has
committed to making changes to address the findings.
"Citizens requested
this audit for a thorough and independent review of their city government. We
found several areas in which improvements can be made to increase transparency
and ensure the city is managed effectively," said Auditor Galloway.
"I appreciate city officials' commitment to make positive change in
response to our recommendations."
The audit found the city
needs to better monitor the use of restricted funds as they relate to Tax
Increment Financing (TIF) for the Raytown Live Redevelopment Area. The $40
million TIF project included transportation and stormwater improvements, and a
variety of capital improvements. With a TIF project, costs are funded through a
portion of property taxes generated in a redeveloped area, as well as taxes
generated through increased economic activity in the area. These taxes are then
diverted from local taxing districts to go toward project costs.
The city has contributed
several restricted sales taxes, including those for capital improvements,
transportation and stormwater, to help pay down the TIF debt. However, the city
cannot ensure the restricted funds are being used appropriately because it has
not tracked the actual outstanding costs. The city also needs to better account
for the sales taxes diverted from the city to ensure transparency in how the
city's portion of these funds are budgeted and reported in the financial
statements.
The report discussed
concerns with severance agreements made with nine police department employees
in 2017. The city made severance payments to two officers, six detention
personnel and one member of administrative staff, but none of the individuals
had employment contracts requiring these payments. Additionally, one agreement
was not approved by the Board of Aldermen. Later in the year, 17 police
officers resigned and the city hired back four of the former employees who had
previously received severance payments.
The audit also found the
city did not always comply with the Sunshine Law. The Board of Aldermen and
Park Board did not maintain meeting minutes for all closed meetings in fiscal
years 2018 and 2019. Additionally, both boards did not always properly report
or limit the topics discussed in closed meetings.
In November, after audit
fieldwork had concluded, the State Auditor's Office received a whistleblower
complaint related to potential bonus payments for Raytown city employees during
the current year. While the audit is now complete, the allegation is being
reviewed by the office's Public Corruption and Fraud Division.
The complete audit
report is available here.