���Petition Audits�

Missouri State Auditor’s Office

Kelly Davis, CPA, CFE, Audit Director

Discussion Topics

• Petition Audit Process

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• What Happens During an Audit

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• Common Petitioner Concerns and Findings

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• Best Practices

Ways Districts are Audited

• Petition
• Governor Request
• Initiated by State Auditor – Section 29.225, RSMo
• Contracted by the city with a private firm.

Petition Audits

Under Section 29.230, ​RSMo, the State Auditor`s Office may be called on to audit any political subdivision of the state if enough qualified voters of that political subdivision request the audit.

Petition Audits

Key provisions of the petition statutes are:

• Cost of the audit is the responsibility of the political subdivision.
• Petition signatures must be from registered voters who live within the boundaries of that political subdivision.
• Petition and signatures must be submitted to the State Auditor’s Office within one year of the initial request.
• The person who submits the petition and signatures to the State Auditor's Office must be a real property owner and/or resident of the political subdivision.
• At the time the petition signatures are submitted to the SAO, there is a 10-day period where withdrawal of signatures is allowed.

Petition Audit Process

• Election data (votes cast and registered voters) by political subdivision is provided by election authorities after each general election
• Required # of signatures is sliding scale based on votes cast in last gubernatorial election, as follows:

Petition Audit Process

Process Steps:

• Initial contact from potential petitioner/requestor
• Submission of petition audit request
• Manager contact & provide petition signature forms
• Signature forms provide estimated cost, information regarding scope of audit, date request was submitted, and information on removing a signature

Petition Forms

Petition Audit Process

Process Steps:

• Signatures submitted to SAO along with petition submission form, with affirmation re: residence &/or real property ownership

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• Receipt of signatures posted to SAO website for 10-day period for signature withdrawal

Petition Audit Process

Process Steps continued:

• Petition signature forms are sent to the election authority for signature verification after 10-day period

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• If enough valid signatures, petition will be added to list of audits to be conducted; if not enough valid signatures, we notify petitioner they must obtain more signatures

Petition Audit Process

Audit Process:

• Entrance
• Fieldwork:
• Survey
• Fieldwork
• Pre-Exit
• Exit Conference
• Report Issuance

Petitioner Concerns

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• Petitioner concerns are considered in our survey work, but we set the scope and establish our audit procedures

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• Audit Report is a public document

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Why do citizens request petition audits?

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• Lack of communication

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• Lack of financial information

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• Lack of audits

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Common Petition Concerns and Findings

• Procurement

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• Board Oversight

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• Capital assets

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• Sunshine Law compliance

Common Petition Concerns and Findings

• Personnel Issues/Pay

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• Findings
• Timesheets
• Overtime
• Annual Leave and Sick Leave Records
• Fair Labor Standards Act Compliance

Common Petition Concerns and Findings

• Travel expenses or allowances

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• Findings
• Excessive travel costs – spouse, alcohol
• Lack of support for credit card bills or expense
• reimbursement claims
• No $ limits or going over $ limits

Common Petition Concerns and Findings

• Disbursements

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• Findings
• Insufficient review
• Purchases

Common Petition Concerns and Findings

• Misuse of city vehicles/equipment

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• Findings
• No usage logs
• Inadequate fuel purchase records
• Not reconciling fuel purchases to usage

Common Petition Concerns and Findings

• Utility bills are too high

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• Findings
• No rate studies – no documentation to show rate is adequate
• Transferring money from utility to general or other funds with no support or inadequate support
• Not evaluating water loss
• Not reconciling customer deposits to available funds

Common Petition Concerns and Findings

• Related party/Conflicts of Interest

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• Findings
• Related party transactions
• Hiring relatives
• Not abstaining when a conflict of interest

Common Petition Concerns and Findings

• Behavior or Lifestyle of Officials/Fraud

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• Findings
• Missing Money
• Improper purchases

Common Petition Concerns and Findings

• Lack of Financial Information
• Not Answering Citizen Questions

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• Findings
• Bidding/Purchases
• Receipts
• Budgets and Financial Reporting

Common Petition Concerns and Findings

• Sunshine Law Violations

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• Findings
• No meeting minutes
• Not properly voting to close meetings
• Discussing unallowable subjects in closed meetings
• No Public Records Access Policy

Common Petition Concerns and Findings

• Financial Condition

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• Findings
• Declining revenues and no corresponding decrease in expenditures
• Fund balance decrease or negative

Best Practices

• Respect Public Assets
• Follow Personnel Policies
• Carefully Plan and Monitor Large Projects
• Use Good Procurement Practices
• Develop and Execute Budgets Properly
• Abide by Sunshine Laws
• Use Strict Receipting and Disbursement Practices
• Preserve Information as Required by Law
• Be aware of possible theft and use good controls.

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Best Practices – Internal Controls

• Segregation of duties
• Documentation
• Reviews and approvals
• Reconciliations
• Computer access, log-ins, backups
• Assets physically secured
• Cash/checks secured until deposited
• Signature stamps secured
• Checks restrictively endorsed
• More than one signature required for checks
• Etc.

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Contact Information

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Hearing from you is important!

Please let us know your questions, comments or suggestions.

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Email: moaudit@auditor.mo.gov

Website: auditor.mo.gov

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301 West High Street

Office 880

P.O. Box 869

Jefferson City, Missouri 65102

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Phone:  573-751-4213

Fax: 573-751-7984

Taxpayer Hotline:  800-347-8597

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Questions