Lawrence County gets ‘fair’ grade from State Auditor Galloway

Galloway lists findings, makes suggestions for county in audit report, officials to update many practices
 
Missouri State Auditor Nicole Galloway released the results of an audit her office conducted of the operations of Lawrence County. The audit gave the county an overall rating of “Fair.”
In the audit, Galloway noted that she and her auditors “identified … deficiencies in internal controls, … noncompliance with legal provisions, and … the need for improvement in management practices and procedures.” In addition to these “deficiencies,” Galloway also listed suggestions for how the different officers in county government could improve their operations. The auditees’ responses to these suggestions were also included in Galloway’s report.

County Collector’s Controls and Procedures
In the Citizen’s summary section of her report, Galloway listed several findings regarding the controls and procedures used by the County Collector, much of them centering on how records were kept. These included:

1.    Office personnel do not always issue receipt slips for duplicate tax receipt payments or deposit intact.
2.    (The) County Collector's office personnel do not always record the method of payment accurately in the property tax system and do not reconcile the composition of receipts (cash, check, money order, or debit/credit card) recorded in the property tax system to the composition of deposits.
3.    The County Collector does not prepare adequate bank reconciliations for the main bank account and does not prepare bank reconciliations for the partial payment bank account.
4.    The County Collector does not prepare monthly lists of liabilities for either bank account to reconcile to the available cash balances.
5.    The County Collector has not established procedures to routinely follow up on outstanding checks in the main bank account.
6.    Personal commissions received for the collection of city taxes are not reported to the Internal Revenue Service as employee compensation by the county.

Galloway’s report included four suggestions for improving operations in the County Collector’s office:

Lawrence County Collector Kelly McVey’s responses to Galloway’s suggestions were included in the report. In response to three recommendations, McVey stated that he would “look into” implementing Galloway’s suggestions.

Property Tax System
In the Citizen’s Summary of her report, Galloway stated the following about the county’s property tax system:

1.    The County Clerk and/or County Commission did not review and approve outlawed 2010 personal property taxes totaling $49,189 in March 2020, and outlawed 2011 personal property taxes totaling $50,835 in March 2021.
2.    The County Collector's annual settlement for the year ended February 28, 2021, did not include 2010 taxes outlawed during the year, totaling $49,189, resulting in the annual settlement being incomplete and inaccurate.
3.    The County Clerk does not have procedures in place to ensure aggregate abstracts are accurate.

In response, County Clerk Tammy Riebe and the County Commission stated, “The County Clerk and County Commission will work with the County Collector to review and approve outlawed taxes.”
Riebe also issued a response regarding another recommendation, in which she stated, “The County Clerk will review procedures in place and make adjustments to ensure accuracy in the future.”
Responding to one recommendation, McVey said he would “implement this recommendation.”

Public Administrator’s Controls and Procedures
Galloway’s audit report listed the following findings about the Public Administrator’s Office:

1.    The Public Administrator does not always file status reports or asset inventory reports in compliance with state law.
2.    The Public Administrator does not provide adequate supporting documentation to the court for the annual settlements or status reports of wards/estates, and does not always obtain court approval for large purchases.
3.    The Public Administrator has not adequately segregated accounting duties and does not perform documented supervisory reviews of detailed accounting and bank records.

Lawrence County Administrator Janice Martin responded to each of the three recommendations with a detailed list of how she intends to correct the shortcomings.

Sheriff’s Controls and Procedures

Galloway’s audit listed the following findings for the Sheriff’s Office:

1.    Sheriff's office personnel have not performed a physical inventory of seized property since November 2019.
2.    Sheriff's office personnel do not have proper controls and procedures in place to ensure all costs for boarding nonstate prisoners are adequately billed to the prisoner upon release and pursued.
3.    Sheriff's office personnel did not retain records from the prior commissary system.

In response to a media inquiry, Brad DeLay, Sheriff of Lawrence County, said his office is currently in the process of performing the inventory, but time constraints had prevented them from doing so earlier.

DeLay also criticized Galloway’s statement about the board bills as “highly misleading.”
“Up until about a month ago, this was never, and had never been the responsibility of the Sheriff’s Office,” he said. “This was the responsibility of the Circuit Clerk’s Office to handle all billing cost to inmates. However, OSCA as well as Missouri Courts, changed this and they have now dumped most of it onto the Sheriff’s Office. So, in short, the statement is partially true because we do not have anything set up because we never had to before and we had no need to have procedures and controls. However, since it was dumped on our lap unexpectedly, we are in the process of creating those controls.”
In regards to Galloway’s finding that the Sheriff’s Office did not retain records from the previous commissary system, DeLay said his office was prevented from doing by circumstances out of their control.

Other findings
The audit also stated that county officials “don’t always follow established written personnel policies.” It also found that certain county offices didn’t have “established password protection controls,” and that the county had not developed electronic records management retention policies “in compliance with the Missouri Secretary of State Records Services Division guidance, as approved by the Missouri Local Records Commission.”

The auditors made several recommendations on how to correct the issues.

In response, Bob Senninger, presiding Lawrence County Commissioner, stated the recommendations “would be taken under advisement as we are currently revising and creating an updated employee handbook and policy manual with the assistance of Lexipol.”
Senninger further explained that Lexipol is a consulting service “specializing in comprehensive risk management, policy and personnel manuals for training public safety and local governments.”

Audit text
The entire audit report can be seen online at the Missouri State Auditor’s website, www.auditor.mo.gov. Click on the tab “Audits,” and on the drop-down menu, click “Audit Reports.” From there, click on the “Counties” hyperlink, and then scroll down and choose the hyperlink for “Lawrence County.” The audit number is 2021-120.