Howardville gets poor rating from state auditor

JEFFERSON CITY, Mo. -- An audit requested by the residents of Howardville uncovered numerous problems, prompting State Auditor Tom Schweich to rate the overall performance of the city as poor.

However, second-term Mayor Jessie Newson said the city has already implemented some of the auditors' recommendations and is working with their attorney on other issues.

"I don't have a problem with [the audit]," Newson said. "I helped them. We were making the changes."

One of the first issues of concern for the auditors, which prompted them to give the New Madrid County city the lowest possible on the state auditor's rating system, involved former members of the city government, Newson said.

In the auditor's report, it pointed out the city leases the Public Safety and Service Building from the not-for-profit Howardville Development Corp. The mayor at the time and two aldermen who voted for the lease were also officers of the corporation, a violation of state law, the report said.

Also, since the beginning of the lease, the city has paid for all insurance, maintenance and utilities on the building, but according to the lease the Howardville Development Corp. should have been responsible for some, if not all, of those expenses.

Other findings by the audit included:

* The audit also found that accounting duties are not adequately segregated, and accountability over city receipts and deposits is inadequate.

* The city did not properly retain some records, and officials authorized to sign checks were not bonded, exposing the city to risk of loss.

* The city does not prepare budgets for any city funds, publish semiannual financial statements, submit annual financial reports to the state auditor's office, or obtain audits of its sewer system, all of which are required by state law.

* The city's personnel records need improvement, the city does not maintain records of vacation and sick time earned and taken, and it appears the former city clerk was paid for unused leave which did not comply with city policies. The city also provided an advance to an alderwoman.

* The city did not abide by its own procurement policy, and controls over disbursements need to be improved. The city does not always pay invoices on time and has incurred interest and late fees.

* The city needs to improve the controls and procedures for the city's sewer and sanitation services and properly track restricted monies.

* The city does not always comply with the Sunshine Law regarding meeting minutes, and city ordinances are not up-to-date and complete.

* The city did not maintain records for its capital assets, carry insurance on some city assets, tag assets for identification, or conduct annual physical inventories of its assets, leaving city assets vulnerable to waste, fraud or abuse.

According to Newson, the current city officials are working to implement the changes and added some were already in place before the audit began.

The auditor's office also praised the current city government.

"It is important to note that the current city government was very receptive to the audit and agreed to implement the audit recommendations," Schweich said in the news release.

"I sincerely hope the citizens of Howardville will make sure their elected officials keep their promise to make these improvements," Schweich said. "Ultimately the path to change and accountable government is in the hands of the community, but my office will be following up in 90 days to help encourage the speedy implementation of these recommendations."

The audit was conducted pursuant to a petition signed by 102 qualified voters of the 75 needed. In accordance with state law, the city will be responsible for the cost of the audit, estimated to between $15,000-$35,000.

Newson said he was informed it should cost about $20,000, but added the city currently does not have that money in its budget.

To view the complete audit report, visit http://www.auditor.mo.gov/press/2011-90.htm.

Pertinent address:

Howardville, MO