District A Audit

MoDNR Topics

District A

Audit Finding Resolution Summary
Region A
Northwest MO Regional Solid Waste Management District
Date of Final Audit Report: Dec. 11, 1999
For The Fiscal Years: 1992-1997
Date of Final Resolution: Dec. 23, 1999

This document is a summary of the actual findings and resolutions determined by this audit. The document is posted here for informational purposes only and not all data from the audit is included here. A complete copy of the audit material may be requested under Section 610, Revised Statutes of Missouri and can be obtained by contacting the Solid Waste Management Program (SWMP) at 573-751-5401.

Audit Finding and Recommendation:
Inadequate Match Documentation. For fiscal years 1994 through 1997, the district could not adequately support the one-third match for the districts’ $20,000 administrative grant. The district’s practice is to estimate the number of hours members of the Council and Executive Board, as well as, the daily non-reimbursed staff time provided by the Regional Council of Governments contribute to the district for local match requirements. This estimate appears as Attachment A on the District Grant as local match. No other form of local match as provided by the district. However, Attachment A to the District Grant is not supported by any form of documentation to support its authenticity.

The Department of Natural Resources’ (DNR) General Terms and Conditions (GTC) II.D. states, "In kind (non-cash) contributions are allowable project costs when they directly benefit and are specifically identifiable to the project or program." Also, II.D.(1) states, "Recipient must invoice the DNR, as required by the particular agreement, and provide financial records for total expenditures of state and match or cost share funding."

The auditor recommended the district obtain the supporting documentation to authenticate the in-kind match for the administrative grants. For instance, a spreadsheet could be developed to document by respective meeting, the length of the meeting and attendees as recorded in the minutes to support the computation of the fair value of local match. If the proper supporting documentation is not provided, then the district may be ineligible to receive funding for five years.

District's Response:
We concur with the finding. The district will submit supporting documentation to authenticate the in-kind match. The district will develop a spreadsheet document to monitor and record the actual amount of time dedicated (in-kind) to district administrative grant activities. This information will both be put into district minutes and submitted to the department before or at the scheduled audit resolution meeting.

Final Resolution:
The DNR considers Finding 1 resolved. The district provided to the SWMP on Oct. 12, 1999, a copy of a proposed tracking system it will use during future District Administrative Grant (DAG) cycles to document in-kind match. Documentation of in-kind match for fiscal years 1994, 1995, 1996, and 1997 DAGs was provided to the SWMP on Nov. 10, 1999, to comply with GTC, II.D. as recommended by the contracted auditor. All documentation will be retained in the district’s permanent file.

District Response:
We concur with this finding. The district will amend its procurement policies to include provisions relating to the encouragement of utilizing disadvantaged enterprises. A form 334, MBE/WBE Utilization Report, will be submitted quarterly to the DNR’s district grant manager.

Final Resolution:
The DNR considers Finding 2 resolved as the district provided Form 334 to the SWMP on Nov. 18, 1999, with their most current Quarterly Status Reports as required by GTC, II.W. All documentation will be retained in the district’s permanent file.

Audit Findings and Recommendations:
MBE/WBE Utilization. The district’s current practices do not include a formal policy to encourage utilization of minority, women, and small disadvantaged businesses when procuring goods and services. The DNR’s GTC, II.W. and RSMo, Section 260.320.4 require the district to establish policies which encourage the utilization of such disadvantaged enterprises. The auditor recommended that the district’s procurement policies be amended to include the provisions relating to the encouragement of utilizing disadvantaged enterprises. Appropriate documentation should be maintained in the file supporting submission of Form 334 "MBE/WBE Utilization Report" to the DNR.

Final Resolution:
The DNR considers Finding 2 resolved as the district provided Form 334 to the SWMP on Nov. 18, 1999, with their most current Quarterly Status Reports as required by GTC, II.W. All documentation will be retained in the district’s permanent file.

Audit Findings and Recommendations:
Interest Income. All grant funding is placed in two interest bearing accounts but interest income was not reported to the DNR. Earned interest income amounts to $7,220 through June 30, 1997, with no related expenditure against such proceeds. The DNR’s GTC, II.C. states, "Program income shall be deducted from outlays which may be both federal and nonfederal, unless the DNR, as negotiated with the recipient, or federal awarding agency specifies an alternative method in the agreement." Furthermore, in accordance with sound accounting practices, all program income must be tracked with proper accountability.

The auditor recommended the program reduce future payments to the district for the interest earned in Fiscal Year 1992 through Fiscal Year 1997 or that the district obtain permission from the program to use this interest income for administration of the program. Should the district receive permission from the DNR to retain interest income, then they are required to implement a system of tracking and accounting for all funds that is accurately maintained and ensures interest is treated as project money.

District Response:
We concur with the finding. The district will obtain written permission from the SWMP to use interest income for administration of the district’s operation. Additionally, the district will use appropriate tracking and accounting procedures for the interest funds to be used as project money.

Final Resolution:
The DNR considers Finding 3 resolved. The district requested the use of interest money in correspondence to the SWMP on Oct. 4, 1999, as recommended by the contracted auditor to comply with GTC, II.C. A policy regarding the use of the interest income was provided to the SWMP on Dec. 3, 1999. A letter of approval dated Dec.13, 1999 was sent from SWMP to the District approving use of the interest money. All documentation will be retained in the district’s permanent file.

Audit Finding and Recommendation:
Budget and Scope of Work Revisions. It is the policy of the district to discuss with subgrantees proposed budget and scope of work revisions and then obtain board approval. The district then discusses project revisions with DNR but does not obtain DNR advance written approval. Specifically, the Fiscal Year 1996 district grant awarded funds to the City of Rockport for project number 96126. The original project cost estimate was approved by the DNR, but the revised actual/estimated project costs were significantly lower. The DNR’s GTC, II.G. Budget and Scope of Work Revisions requires prior approval from the DNR for approved changes in the Scope of Work or budget that must be incorporated in the subgrantee’s written amendment.

The auditor recommended the district incorporate into their procedures compliance with GTC, II.G. requiring advanced approval from the DNR for subgrantee budget and/or scope of work changes.

District Response:
We concur with this finding. The district will provide the DNR’s SWMP with a copy of minutes reflecting any discussion about any past changes to district grants’ budget or scope of work. Additionally, the district will require, in writing, notification of approval from the DNR’s SWMP for any future budget revisions or Scope of Work changes as a means to insure that any future revisions will be subject to this policy.

Final Resolution:
The DNR considers Finding 4 resolved. The district provided a copy of the Oct. 20, 1999, Executive Board meeting minutes to the SWMP on Nov. 10, 1999, in which the board discussed and voted to amend the project discussed in the finding. A procedure indicating how all future project changes will be handled by the district was provided to the SWMP on Dec. 3, 1999. All documentation will be retained in the district’s permanent file. >