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After citizen-initiated audit of Edgar Springs resulted in lowest possible rating, follow-up report from Auditor Galloway finds that serious concerns remain

10/07/2021

A report from State Auditor Nicole Galloway finds that the city of Edgar Springs in Phelps County has implemented some recommendations from her 2020 audit, but that other concerns remain. The November 2020 audit of Edgar Springs was initiated through a petition of city residents. That audit highlighted numerous problems with the city's accounting controls and procedures, as well as other operations of city government.

Because the audit gave a rating of "poor" — the lowest possible — the Auditor's Office conducted a follow-up review to measure the progress the city has since made.

"Taxpayers from Edgar Springs asked for my help to ensure that their city government is using their tax dollars responsibly and efficiently," Auditor Galloway said. "This follow-up report found that while city officials have begun working to implement some of my recommendations, serious concerns remain unaddressed. I urge city officials to implement all of the audit recommendations to ensure they are transparent with taxpayers."

Of the 20 recommendations followed up on from the 2020 audit, Edgar Springs officials have fully implemented only two. Eight recommendations remain not implemented with another ten either partially implemented or in progress.

While auditors found that the Board of Aldermen has begun reviewing monthly budget-to-actual reports as recommended, the city's official 2021 budget could not be located and supporting budget documents do not contain all the statutorily required elements. Nor have they prepared and maintained accurate financial statements and accounting records as recommended. City officials have not filed an accurate and timely financial report with the State Auditor's Office.

The Board has not adequately segregated accounting duties or ensured documented supervisory or independent reviews of work performed by city officials are completed. They have not developed better procedures for receipting and depositing city funds.

The follow-up review also found that the city has made no progress on the recommendation that they ensure ordinances are maintained in a complete and well-organized manner, and establish an index of all ordinances passed and rescinded. No progress had been made towards ensuring that sunshine requests are responded to timely.

Auditors found that progress is being made on recommendations relating to sewer system controls, maintaining supporting documentation for disbursements of city money, and a written policy regarding public access to city records.

A copy of the complete follow-up report can be found here.