The city of New Bloomfield's accounting and budgeting procedures have room for improvement, Missouri State Auditor Nicole Galloway said.
"Our report makes several recommendations to improve the processes in New Bloomfield," Galloway said in a Tuesday news release. "I encourage city officials to implement those recommendations to ensure a government that operates transparently and in the best interests of taxpayers."
Galloway's office released the results of a citizen-requested audit of the city Tuesday. The audit began in January after months of work by local activists to collect signatures and petition the state. Members of the group, Committed Citizens of New Bloomfield, raised concerns about the town's budget, compliance with Sunshine Law requirements and more.
Members of the auditor's office looked into the city's compliance with legal provisions, management practices and internal controls over management and financial processes. Auditors reviewed documentation for 2018 and prior years and also interviewed staff and "external parties."
New Bloomfield's government practices received an overall rating of good, indicating the entity is "well-managed."
"We're very pleased with the results of the audit. It reflects the work we've been doing to make our government more efficient," Mayor Terry Shaw said.
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However, the audit did find several issues.
First, Galloway noted a lack of segregation of duties among city personnel when it comes to accounting or reviewing work.
"We've had that on every audit we've ever had," Shaw said, pointing out the city has an audit every year. "We don't have a large enough staff to segregate duties."
Second, the audit reports several elements were missing from the city's 2018 budget, like a budget message, a budget summary, information on debt payments and other required items. Accounting procedures weren't perfect, either: One vendor was overpaid by $2,108. Auditors found errors in 14 percent of the monetary disbursements they reviewed.
"Mistakes are always made because nobody's perfect," Shaw said. "There were no significant or intentional errors."
The audit report contains spaces where the auditee responds to findings. The responses are not attributed to any particular official.
Officials state the Board of Aldermen is making sure budget forms are in compliance with statutory requirements and that the 2019 budget was correctly presented.
Third, the audit found problems with the Board of Aldermen's compliance with Sunshine Law requirements. Board members are supposed to reference the section of the law allowing for a closed session when voting to go into a closed session. They failed to do so at three of eight closed sessions during 2018, the report states.
Officials responded that the law was verbally referenced but was not always recorded correctly in the minutes.
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Lastly, Galloway found the city didn't always follow proper bidding procedures, including not soliciting competitive bids for auditing services in accordance with the city's bidding policy. The city is supposed to advertise bids for expenditures more than $5,000. Officials paid $9,400 to a CPA firm for the 2017 audit but did not solicit other bids that year or in the three previous years.
According to officials, the city bids out professional contracts every three to five years but was unable to go through that process for the 2018 audit due to time and personnel shortages. The board has corrected personnel issues to prevent future occurrences, officials stated.
When asked whether the city will make further changes based on the audit's responses, Shaw began reading aloud the definition of a "good" rating from the audit report. None of the auditor's findings were "significant," he said.
"'The report contains few findings, and the entity has indicated most or all recommendations have already been or will be implemented,'" he read. "I think $25,000 is a lot to pay to hear someone say you're doing good. I think this was an unnecessary expense."
The City of New Bloomfield must pay for the execution of the audit; the average cost to cities is $20,000-$40,000, Galloway has said previously.
The audit report did not address some areas of concern raised by locals, such as seemingly high salaries for certain city employees. Some residents had objected to the city superintendent and clerk receiving raises in the wake of the elimination of the town's police department for budgetary reasons.