St. Louis Recorder's Office makes improvements after audit raised serious concerns about management practices

Auditor Galloway releases follow-up report on problems found in recorder's office earlier this year; Report details progress on issues ranging from inappropriate spending and improperly bid contracts to thousands of dollars in account errors

Missouri State Auditor Nicole Galloway has released a follow-up report to an audit of the Office of the St. Louis Recorder of Deeds. The review was conducted after the initial audit gave the office an overall performance rating of poor and recommended multiple changes to office practices.


"The results of the initial audit of the St. Louis Recorders Office were concerning and raised serious questions about how the office was being managed and how operations were generally being conducted in the office," Auditor Galloway said. "Since the report's release, the recorder's office has shown a genuine interest in improving office operations.  This follow-up review shows there are still areas of concern, but I do want to commend the individuals who do the day-to-day work in the office for their commitment to making improvements based on the report findings."


A team of auditors followed-up on several key findings from the January report, including concerns related to construction contracts being awarded to the son of the previous deputy recorder without following proper bidding procedures. After the report was issued, the recorder outlined new office policies that require open bidding on major purchases and projects. According to a review of purchases made this past spring, the office appears to be complying with the new requirements.


Another issue of concern was related to thousands of dollars in inappropriate and undocumented purchases made from the Records Preservation Account, which is supposed to be used for records preservation and related technology. Purchases made from the account since the audit's release appeared to be appropriate and in compliance with the law, and the recorder has since split the account into three separate funds for records preservation, technology and miscellaneous expenses. The intent is to ensure fees are deposited into the correct fund going forward, in order to allow for future expenditures to be made using the correct fund. The continuing concern is that the money that was in the Records Preservation Account was not divided up properly between the funds, and therefore may not be spent on its intended purpose. The entire amount, totaling $340,000, was deposited into the miscellaneous fund, without appropriate accounting or tracking.


Recorder's office staff indicated they are continuing work to determine where $38,000 in the office's escrow account belongs. The amount was identified by the State Auditor's Office and was caused, in part, due to the recorder's office not balancing its escrow account against the city's records. This led to errors not being detected, and over time the errors amounted to a substantial difference between the city's official records and records kept by the recorder's office. The recorder's office has started comparing its escrow account against the city's records on a monthly basis in order to detect and prevent future errors, but the unidentified balance has fluctuated each month, and was $66,000 in May of 2016. Even as office staff are committed to determining where the unidentified balance amount belongs, it may be impossible to fully determine because these reviews did not take place for decades.


The initial audit was released in January 2016, and auditors returned for a follow-up review in August. The complete follow-up report on the Office of the City of St. Louis Recorder of Deeds is available online here.