09/13/2021
A
report from State Auditor Nicole Galloway finds that Monroe City has
implemented some recommendations from a 2020 audit, but that other concerns remain. The June 2020 audit of Monroe City was initiated through a
citizen petition, which required 200 valid signatures of qualified voters in
the city. That audit highlighted concerns in several areas, including city
utilities, year-end employee bonuses, and a lack of transparency around city
budgets and real estate transactions.
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 made.
"The
taxpayers of Monroe City asked for my help to ensure that their tax dollars are being used
responsibly and efficiently," Auditor Galloway said. "This follow-up
report shows that while city officials have implemented some of my
recommendations, other concerns remain. I urge Monroe City to implement all of
the audit recommendations to ensure they are transparent with taxpayers."
The
2020 audit found that the city made periodic transfers from restricted utility
funds to the general fund, including a 2018 transfer of $150,000 each from the
electric and gas funds to the general fund to prevent the general fund from
having a deficit balance. Auditors recommended that the Board of Aldermen ensure any future payments
from the Electric, Gas, Water, and Sewer Funds to the General Fund represent
reimbursement of actual costs of operations and maintain documentation to
support the amounts transferred. However, in the follow-up report, auditors
found that the city continued to make payments from the Electric, Gas, Water,
and Sewer Funds to the General Fund totaling $741,936 during the year ended
September 30, 2020 without documented support for the amounts transferred.
After city officials could not provide
auditors with documentation that a formal review of electric, water and sewer
rates has ever been performed, Galloway recommended that the city review
utility costs to ensure rates are set at an appropriate level. After a
contractor performed a water and sewer rate study, the Board of Aldermen passed
a new flat rate that was added to both the water and sewer bills in November
2020. However, the
flat rate for water is more than the rate recommended by the study and the flat
rate for sewer is less than the rate recommended by the study. As a result, the
city may not generate enough sewer revenues to cover costs and will likely
generate more water revenues than needed to cover costs.
Additionally, after the 2020 audit recommended that the Board of
Aldermen discontinue paying employee year-end bonuses in violation of state
law, the Board authorized the payment of $2,422 in year-end bonuses in December
2020. The Missouri Constitution forbids the payment of additional compensation,
such as bonuses, to public employees for services already rendered.
In all, of the 20 recommendations followed up
on from the initial audit, three recommendations have been fully implemented by
the city. Another three recommendations are in the process of being
implemented. Six have not been implemented and eight were only partially
implemented.
A
copy of the complete follow-up report can be found here.