?Auditor Galloway reports serious financial concerns, poor oversight in audit of City of Sparta government

Missouri State Auditor Nicole Galloway today met with residents of the southwest Missouri city of Sparta in Christian County to discuss the results of an audit of city operations. The audit was initiated by a petition of citizens, and raised serious concerns related to the city's finances and management policies.

"My team found serious financial concerns in Sparta, combined with too few procedures to ensure taxpayer money is managed responsibly," Auditor Galloway said. "We've outlined a number of necessary steps to better protect citizens' resources and help city officials create stronger safeguards."

Auditors found a city in financial distress, with a number of public funds in poor financial condition. For example, the city's police fund carried a negative balance for at least five years and owed more than $200,000 to other city funds. Sparta's park and general funds are also in weak condition. Auditors determined the board of aldermen had failed to monitor the city's budget and were unaware of the severity of the financial challenges facing the city, resulting in actual expenses exceeding budgeted amounts by more than $90,000. 

Failure to address problems first raised by a private accounting firm in 2013 also contributed to the city's issues, including significant transfers among city funds and a lack of oversight of clerks' accounting work. In their review, auditors found the city maintained 20 bank accounts, creating cumbersome and sometimes inaccurate records.

• Other problems identified in the audit are listed below:

• Lack of an employee manual and other critical policies, along with noncompliance with established ordinances, contributed to inconsistent treatment of employees and potential violations of state and federal employment laws.
• Errors in payroll calculations and poor documentation led to inaccuracies in employee records for payroll and leave balances.
• Sparta officials failed to follow city code related to soliciting bids for a number of major purchases and did not ensure compliance with the state's prevailing wage law in overseeing capital projects and expenses.
• There was an apparent conflict of interest and  lack of documentation in a bid accepted by the board that was not the lowest bid received for a project.
• Other findings in the audit addressed potential cybersecurity weaknesses and Sunshine Law compliance issues.

An audit of Sparta's municipal court was released in July 2016 with a rating of "fair." Because the city received an overall performance rating of poor, a follow-up review will be conducted next year. A copy of the complete audit of the City of Sparta is available here.

For more information, contact: 

media@auditor.mo.gov