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Auditor Galloway's audit of the city of Rockville in Bates County results in rating of "poor," the lowest possible.

Review of city operations was initiated by citizen petition

11/17/2022 - Jefferson City, Mo.

Missouri State Auditor Nicole Galloway today released her audit of the city of Rockville, located in Bates County in western Missouri. By petition, city residents requested the audit, which resulted in a rating of "poor," the lowest possible rating.

Auditors identified numerous concerns related to accounting controls and procedures as well as a lack of oversight in the handling of city finances.

Rockville officials pointed to difficulty in hiring a full-time City Clerk. As a result, the duties of the Clerk have been taken over by the City Treasurer while the Board of Aldermen conducts their fourth search in six years for a new Clerk. Combining financial positions diminishes the effectiveness of segregation of duties and increases the need for stronger oversight. The audit found that the Board of Aldermen's oversight of city finances was inadequate. In Rockville, the Treasurer is the spouse of a member of the Board of Aldermen, who himself is a relation of the Mayor.

Auditors found that city personnel did not issue receipt slips for all money received or maintain a complete log of receipts. The Treasurer did not deposit city receipts timely or intact, deposit utility receipts into the proper accounts, did not prepare adequate or timely bank reconciliations, nor provide adequate supporting documentation for some disbursements. The audit also identified concerns with utility controls and procedures. For instance, the city Treasurer failed to remit some sales taxes collected on city water services to the state by the due date, which resulted in interest and penalties being charged to the city by the Department of Revenue. The Treasurer also mailed property tax bills to residents after the date in which payments would be considered delinquent, and utility billings were not sent timely.

The city has not prepared an annual budget for the past three years nor published semiannual financial statements. The city has also submitted inadequate annual financial reports to the State Auditor's Office, which did not meet requirements of state law. The financial reports submitted consisted of receipts and disbursements for only three of the city's eight bank accounts. In addition, the reports did not include the city's property tax levy, and statement of indebtedness as required by state regulations.

Auditors also questioned the city's procedure for filing a vacancy on the Board of Aldermen following an election resulting in a three-way tie of write-in candidates for the seat in April 2021. Instead of ordering a special election as required by law, the Board installed one of the candidates of their choosing, suggesting that the other two had previously resigned and weren't interested in serving. After receiving complaints, the city obtained legal advice and sent letters to the three write-in candidates giving them the option to request a special election or decline the position.

The audit report includes numerous recommendations to the Rockville Board of Aldermen to improve accounting procedures, oversight of city finances, and compliance with state law.

A complete copy of the audit report is available here.