Citizen-requested audit released by Missouri State Auditor provides Pierce Township with “fair” rating

Audit News Graphic
Share To Your Social Network

An audit released by Missouri State Auditor Scott Fitzpatrick gives Pierce Township, located in Texas County, a rating of “fair” and highlights the township officials’ failures to budget responsibly and provide accurate financial statements. The audit, which includes several recommendations for improvements to the township’s administration, was initiated after 94 residents signed a petition requesting the State Auditor’s Office review the township’s finances.

“I appreciate the residents of Pierce Township investing their time and effort to make this audit possible, and I hope our final report gives them the detailed information they need to better understand the strengths and weaknesses of their township government,” said Fitzpatrick. “The ‘fair’ rating indicates that there are several areas where the Board of Directors can make significant improvements to make the township run more effectively and efficiently. I’m encouraged to see they are taking our recommendations seriously and hope they will implement them as quickly as possible.”

The audit report details how the township’s budgets for the years ended December 31, 2022, and 2023, did not include all statutorily required information and were not approved by the Board. In the 2022 budget, the only revenue budgeted was interest, and neither the 2022 nor 2023 budgets included estimated ending cash balances. In 2022, budgeted disbursements, totaling $81,277, exceeded budgeted revenues, totaling $53, by $81,224. The estimated beginning cash balance on January 1, 2022, was only $69,053, resulting in a deficit budget balance of $12,171. Additionally, the township failed to publish complete and/or accurate financial statements.

The report also details how the Board of Directors does not review and approve disbursements before payments are made and lacks supporting documentation for all disbursements made. It found that the former Township Treasurer outsourced payroll services to a bookkeeper without Board approval, and the bookkeeper was paid by the township without having a written contract with the Board. Additionally, the Township Treasurer failed to perform monthly bank reconciliations, leading to errors in the general ledger that township officials did not identify. The audit identified more than $12,500 in checks and deposits that were not recorded in the general ledger. After the errors were corrected, there remained a difference of $5,798 between the general ledger cash balance and the bank balance, which was identified and corrected by the township’s bookkeeper. The report also found the Treasurer’s reports presented to the Board each month did not reflect all financial activity of the township, and the cash balances reported were inaccurate.

The Board also failed to solicit bids for major purchases in accordance with state law and violated the Missouri Constitution by providing year-end bonus payments of $100 to both township employees. Additionally, the Board classified township officials as independent contractors rather than employees for income tax purposes without documenting the reason for the decision and violated the Missouri Constitution by giving an employee $800 of bereavement pay.

While the primary duty of the township form of government is to maintain the county roads located within its borders, the audit found Pierce Township has not developed a formal annual maintenance plan for township roads. The report notes the Board President indicated he monitors employees’ work but had not considered the importance of a documented plan. The audit recommends the Board establish a formal annual road maintenance plan that will provide a means to more effectively monitor and evaluate the progress made in the repair and maintenance of roads throughout the year. The Board indicated in its response that it has already started the process of developing a plan.

The audit report also finds the township needs to develop a records management and retention policy that includes electronic communication in compliance with the Missouri Secretary of State Records Services Division guidance, and properly document the passing of official township records to successor officers when elected or appointed to office as required by state law.

The complete audit of Pierce Township is available here.


Share To Your Social Network