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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2005-38
June 2005
The following problems were discovered as a result of an audit conducted by our office of the City of Bragg City, Missouri.
Inadequate controls and oversight resulted in approximately $9,740 in missing monies. The City determined that during June and July of 2003, seven of the city's checks totaling $3,120, had been processed by the bank with either no payee indicated or that were payable to the former City Clerk/Treasurer/Collector, for which no supporting documentation was available. The endorsement on each of these checks showed the former City Clerk/Treasurer/Collector. In January 2004, the City Attorney notified the Pemiscot County Sheriff's office of their findings. A letter written by the former clerk indicated payments would be made until the debt was paid, however, as of November 2004, the city had been reimbursed only $2,550 from the former clerk. City personnel indicated they did not investigate transactions before May of 2003, because their records had been destroyed or lost. However, information we obtained from the bank indicated additional checks written in the same manner totaling $6,050. In addition, during the year ended May 31, 2003, $1,520 in checks were written to the former clerk which appeared to have been payroll; however, the clerk should have been paid only $960 ($80 per month times 12 months). It appears the city had not thoroughly investigated the situation and was not aware of all the unusual checks at the time of their "agreement".
The City Clerk also serves as the City Collector and the City Treasurer contrary to an Attorney General's opinion. Additionally, the City sometimes signed checks in advance, did not adequately bond officials, and has not entered into a formal written agreement with the city attorney.
The City used public monies on expenditures that did not appear to be reasonable and prudent, including $477 for decorations, school supplies, prizes, food and candy for a back to school party in August 2003.
The City had no supporting documentation for approximately $2,500 of additional expenditures made between June and November 2003. The Mayor indicated that these records had been destroyed. Additionally, the board minutes do not normally contain indication of board approval for expenditures, and the board does not normally review invoices before approval of payment.
The City has not filed annual financial reports with the State Auditor's office since 1999, published semi-annual financial statements, or prepared annual budgets, as required by state law.
Also included in the report are recommendations related to accounting procedures, property tax procedures, meetings, minutes and ordinances, payroll, and the volunteer fire department.
