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Auditor Galloway finds conflicts of interest and lack of transparency in audit of Cornland Special Road District

Citizens requested an audit of the board that oversees 12 miles of gravel road in rural Bates County

09/13/2022 - Jefferson City, Mo.

Missouri State Auditor Nicole Galloway today released the findings from an audit of the Cornland Special Road District. Taxpayers in Bates County petitioned Galloway's office for an audit of the district, which oversees 12 miles of gravel road outside the city of Butler. The audit resulted in a rating of "fair."

Auditors found that two commissioners were paid for performing road repair and maintenance work in 2021. Commissioners receiving payments for road work services while also serving on the board creates an apparent conflict of interest. Missouri law prohibits elected officials from performing any service for compensation, other than compensation for the performance of their duties. Additionally, the board did not prepare and file IRS 1099 forms to report the payments made to these commissioners.

Additionally, auditors found that the board only held one public meeting in 2021, but did not keep an agenda or meeting minutes in compliance with the Sunshine Law. One commissioner indicated to auditors that the board met informally on other occasions throughout the year to discuss and vote on district business without providing public notice or keeping meeting minutes. In one of those informal meetings a vote was taken that awarded road work business to a vender owned by a family member of a commissioner. 

The district also does not have a formal bidding policy and bids or proposals were not solicited for gravel and rock hauling. After flooding damaged district roads in 2019, the district applied for and was awarded up to approximately $130,000 in federal and state disaster assistance grants to reimburse repairs to roadways. The grant requires the district to have a documented procurement policy that complies with applicable federal, state, and local regulations, and publicly solicit competitive bids. At the time of the audit, federal and state disaster assistance reimbursements actually received by the district were below the total amount approved and much of the repair work remained unfinished. In 2020, the board asked residents living in the road district to donate money for the repairs.

A complete copy of the audit is available here.