District K Audit

MoDNR Topics

District K

Audit Finding Resolution Summary
Ozark Rivers Solid Waste Management District – Region K
Date of Final Audit Report: Oct. 30, 1996
For The Fiscal Years: 92-95
Date of Final Resolution: May 13, 1997

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 at 573-751-5401. The summary below was taken from the actual audit documents and is presented in its original form.

Audit Finding and Recommendation:
Interest Income Not Reported. Interest income was earned on grant funds held in the district’s checking account in the amount of $1,979 for fiscal year 1995, $1,799 for fiscal year 1994, $1,488 for fiscal year 1993, and $575 for fiscal year 1992. The district did not report the interest income to the Department of Natural Resources or deduct the interest from outlays as required by the department's General Terms and Conditions.
The auditor recommended the district request a reduction in future payments from the department for the interest earned in fiscal years 1992, 1993, 1994 and 1995 or that the district obtain written permission from DNR to retain the interest income earned for the administration of the program.

District Response:
The district was not required to take any actions. The Solid Waste Management Program has made changes to the Special Terms and Conditions to allow districts to use income generated from interest earned on district grant agreement funds. The expenditure of income earned from such interest must comply with 10 CSR 80-9.050 Solid Waste Management Fund - District Grants. Interest earned from grant monies may be used to fund costs as long as they are reimbursable under the provisions established in the Solid Waste Management Fund - District Grants rule and directly benefit the district grant program.

Final Resolution:
The DNR considers this matter resolved.
Audit Finding and Recommendation:
Procurement Procedures. The district does not require documentation of subgrantee procurements. The subgrantee is required to administer the grant agreement in accordance with all applicable federal, state, and local laws and regulations. Compliance with the applicable laws and regulations include following proper procurement standards as depicted in the department's General Terms and Conditions.
The auditor recommended the district require documentation of the subgrantee’s procurements as part of the formal financial assistance award process to ensure compliance with applicable regulations.

District Response:
The district developed and submitted a district grant policy manual. The policy manual addresses the procurement procedures issue.

Final Resolution:
The DNR considers this matter resolved.
Audit Finding and Recommendation:
Physical Inventory of Equipment – Restricted to Subgrantees Only. The auditor noted that the district did not conduct a physical inventory of the equipment purchased by subgrantees as required by DNR General Terms and Conditions.
The auditor recommended the district take a physical inventory at least every two years to ensure all equipment purchased with district grant funds is being used for the intended purpose.

District Response:
The district addressed equipment management procedures to safeguard assets purchased with grant funds in the district grants policy manual referenced in number 2 above. The policy also identified procedures for proper equipment disposal. The district indicated in the policy manual that it would conduct an annual inventory of all equipment purchased with district grant funds. The district also provided a list of equipment purchased with district grant funds.

Final Resolution:
The DNR considers this matter resolved.
Audit Finding and Recommendation:
District Grant Evaluations. The fiscal year 1994 district grant evaluations could not be located by the district. Without documentation of the evaluation process, there is no assurance that a proper evaluation was performed and the district grant proposals met the established criteria as required by regulation.
The auditor recommended the district maintain documentation that supports that proper evaluations are conducted for all district grant proposals.

District Response:
The district located and submitted the fiscal year 1994 district grant evaluations. The district also submitted procedures for evaluating, ranking, and making funding decisions on grant applications.

Final Resolution:
The DNR considers this matter resolved.

Audit Finding and Recommendation:
No Tax- Exempt Letter.

During a test of cash disbursements, the auditor noted one instance of the district paying sales tax on items purchased for district purposes. Items purchased for use by a tax-exempt agency are exempted from sales taxes. The district should have a sales/use tax exemption letter from the Missouri Department of Revenue.

The auditor recommended the district take measures to ensure sales tax is not paid on district disbursements and a tax-exempt letter be acquired from the state. Furthermore, the district should return all sales tax paid on previous purchases to the program. Questioned costs of $1.79.

District Response:
The district submitted a copy of a tax-exempt letter with an effective date of August 1, 1996. The district submitted documentation showing the $1.79 had been returned to the district account on April 18, 1997.

Final Resolution:
The DNR considers this matter resolved.
Audit Finding and Recommendation:
District Grant In-Kind Match. Of the eleven district grants we sampled, we noted four cases where the subgrantee’s match contributions were not properly documented as required by the DNR General Terms and Conditions.
The auditor recommended the district review district grant files upon the subgrantee’s request for payment to ensure proper documentation related to in-kind contributions is submitted.

District Response:
The district submitted written procedures to ensure adequate documentation for in-kind match prior to advancing any grant funds. The district indicated that it was working on obtaining adequate documentation for match amounts for each of the four subgrants.

Final Resolution:
The DNR considers this matter resolved since the district submitted documentation for match amounts for the four projects on April 25, 1997.