09/18/2025 - JEFFERSON CITY, Mo.
A report released today by Missouri State
Auditor Scott Fitzpatrick finds officials in the City of Louisiana need to cut
down the risk for fraud by increasing oversight of adjustments made to city's
water bills and need to improve their lacking financial reporting that originally
resulted in $196,500 in fines from the state, but now has been reduced by more
than $130,000 because of assistance from the State Auditor's Office. The
report, which was requested by the Louisiana City Council and gives the municipality
a rating of "fair," also identifies $900 in missing city funds and notes
the city's inadequate policies for overtime pay.
"While our audit did
not identify any evidence of major fraud in the City of Louisiana, it did
uncover a number of areas where city officials need to improve their level of
oversight and accountability to ensure taxpayer dollars are not stolen or
wasted in the future," said Auditor Fitzpatrick. "Adjustments made to
water bills without supporting documentation present an enormous opportunity
for fraudulent activity and I'm glad to see the city is taking steps to ensure
all adjustments are necessary and properly handled."
Fitzpatrick added,
"I am also encouraged by the city improving its financial reporting
process to ensure its financial statements are filed on time. The inability to
file the 2023 report timely ended up costing taxpayers of the City of Louisiana
$196,500 in fines and somehow the city was not aware of this until we brought
it to their attention. I understand they intended to file the report properly,
but the truth is city officials failed to perform a basic function that they
managed to do successfully both before and after this incident. I'm glad we
were able to assist them in reducing the fine amount by more than $130,000 so
the burden on taxpayers could be greatly reduced, but this is something that
should never have happened and should never happen again."
During the audit period, the city did not have policies or
procedures requiring Board approval or documentation to support water account
adjustments. Water records
indicate the city received approximately $803,000 in water revenues during the
year ended May 31, 2024, and personnel posted a total of 655 adjustments,
totaling approximately $373,000, during that time. A review of the list of
adjustments for the 3 fiscal years ended May 31, 2024 found many individuals
with adjustments in multiple years or significant adjustments. A review performed
by the city of the fiscal year 2024 adjustments identified 31 inappropriate
adjustments totaling over $2,000 for 26 individuals. Further review by the
State Auditor's Office (SAO) found some additional adjustments were inappropriate
because city staff processed them without accurate supporting documentation or
any explanation of the adjustment reason.
The audit also
found proceeds from some scrap metal sales totaling $900 were not
deposited and are missing. The city allows employees to take extra scrap metal
to a local scrap metal company and sell the metal, but the funds received for
the sale are to be turned over to the city. Reports
from the scrap metal company for the period December 2019 through December 2023
noted city employees received approximately $2,300 for scrap metal sales, but
city deposit records indicate only approximately $1,400
in scrap metal income was deposited, a difference of $900. The city has not
taken any action to investigate the difference.
Additionally, the
audit found the city does not have a written policy for overtime to
address the hours, including non-working time, to be considered when
calculating overtime. A review of the timesheets and payroll payments for all
employees for November 2023 and July 2022 noted 17 employees who were paid at
time and a half if they worked more than 8 hours a day, even though the
employees were not working more than 40 hours a week. The city paid
approximately 170 hours of overtime for July 2022 for employees who did not
work a total of 40 hours in a week because the city counted holiday or leave
hours as part of the 40 hours worked during the week.
The final finding in the audit details how the city failed to
submit its year ended May 31, 2023, annual financial report to the State
Auditor's Office (SAO) until April 18, 2025. As a result, the Missouri
Department of Revenue (DOR) assessed fines totaling $196,500, which the DOR
collected by withholding monthly sales tax distributions. The Mayor was not
aware of the DOR withholdings until he was informed by the SAO. After being informed
by the SAO, city officials
determined the report was erroneously sent to the DOR in August 2024, rather
than to the SAO. The Mayor contacted the SAO in July 2025, and provided
documentation of submission to the DOR and the SAO agreed to show the report
received as of the August 21, 2024, DOR submission date. Even with the earlier
submission date, the report was almost 9 months late and the city is subject to
over $60,000 in fines.
The complete audit
report is available here.
