A state audit has revealed that the City of Howardville in New Madrid County has received a "poor" rating from the state auditor.
In an audit by State Auditor Tom Schweich, the overall performance of the city was rated the lowest possible on the state auditor's rating system.
According to the auditor's office, the city leased Public Safety and Service Building from the non-profit Howardville Development Corporation raises serious concerns.
The then-mayor and two aldermen who participated in discussions about the lease and voted in favor of it, were also members of the HDC, according to Schwich's office. State law prohibits elected officials and employees of political subdivisions form participating in this manner when a conflict of interest exist.
Because the lease does not contain a provision allowing the city to cancel it, the Board of Aldermen might have violated the Missouri Constitution by entering the lease without voter approval, according to Schweich's office.
The state auditor's office also released the following findings:
-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 semi-annual 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.
Although the current audit contains many serious findings, it is important to note that the current city government was very receptive to the audit and agreed to implement the audit recommendations, according to Schweich.