AUDIT ALLEGES DISCREPANCIES IN LILBOURN'S FINANCIAL DEALINGS

LILBOURN - An audit requested by citizens of Lilbourn has revealed that city funds are missing, financial decisions made by city officials are questionable, and millions of gallons of water pumped by the city water system are unaccounted for.

State Auditor Margaret Kelly performed the audit, which she is authorized to do if requested by a certain number of residents in a city. Last year citizens petitioned Kelly to conduct the audit because of concern about how city finances were being handled.

Kelly suggested the board of aldermen investigate the $3,448 in missing funds, which they found was collected by a former city collector but never deposited. The missing funds included $2,547 in fines and crime victim compensation fees, $486 in merchant license taxes and $415 in water and sewer payments.

The auditor also pointed out that between April 25 and Aug. 22, 1991, the city could not explain 5.575 million gallons of water pumped by the city's water system that was not billed. If billed, this water usage would have generated $4,600 in additional revenue.

The amount of water not billed represents 23 percent of all water used during that time period; the Missouri Public Service Commission generally recommends an investigation if the usage not billed exceeds 15 percent.

City officials have been advised to consider possible legal action against the former collector. Information compiled by the state auditor's office will be made available to New Madrid County Prosecuting Attorney Riley Bock for review.

In the audit report, Kelly also questions more than $109,000 in financial decisions made by city officials.

Included in those were financial transactions involving the mayor and former collector. The city allowed the collector to obtain over $4,000 in unemployment compensation, even though state law prohibits elected officials from collecting unemployment benefits once they have left an elected position.

A business owned by the mayor received $5,578 in city funds for equipment repairs, supplies, gravel, gas and oil, said the audit. These purchases were made without a bid process, it said.

Under state statutes, government officials cannot sell items to the political subdivision for which they work that are valued at more than $500 unless that purchase goes through a bid process.

In several instances some payments were made without approval of the board of aldermen, said the audit.

For example, Kelly said $68,712 was paid from the street improvement fund without board approval, including $60,968 paid to one vendor.

Five trucking companies were also paid $7,688 without board approval. The mayor approved the expenditure without following the established procedures of consulting with the board before the money was spent.

In another instance, the city borrowed $10,676 from the Bank of New Madrid to purchase a new police car, with a loan agreement that required 36 monthly payments. But state law requires voter-approved bonds be issued to finance purchases that cannot be made from current operations.

Kelly also cited examples where money was transferred to different funds without appropriate documentation to insure those funds would be returned and spent in accordance with state law.

In one instance, $5,500 in the street fund was transferred to the water fund without supporting documentation. Money in the street fund includes gas taxes, which by law can only be used for maintenance and construction of roads and streets.