DIAMOND, Mo. — A state audit released this week identified numerous problems with the financial operations of Diamond Municipal Court and gave it a “poor” rating — the lowest grade possible.

State Auditor Tom Schweich’s office released the results of a petition audit Monday, and found that many court records were in disarray and that money could not be accounted for. A larger audit of overall city finances is under way.

The audit of the court operations comes on the heels of personnel changes over the past year.

Teresa Setzer, former court clerk, resigned in September 2011. Former City Collector Fran Horton was appointed as court clerk that month, but she resigned in April. Former police Chief Keith Brumfield resigned in July 2011.

Among the audit findings:

• Procedures were not in place to ensure that all money received by the municipal court was properly deposited and accounted for. Some deposits were placed in the wrong bank accounts, and other deposits were not made in a timely manner.

Auditors noted that $207 in court payments received in April and June of 2011, for example, could not be traced to a deposit. Also, $521 was received between April 26 and May 3, 2011, but only $391 was deposited in the city’s bank account. The audit did not indicate what happened to the missing money.

A $200 credit card payment received in April 2011 was not deposited in the proper account, and many other credit card transactions were not completed properly. After the problems were pointed out to city officials by the city’s accounting firm, the municipal court attempted to process some of the credit card transactions again in November 2011, but several of the payments were denied.

Auditors found that municipal court funds often were incorrectly deposited into the city’s sewer and water accounts. Receipts totaling $1,720 were incorrectly deposited into those accounts in September and October of 2011.

• Court records were not properly maintained and in some cases could not be located, and the court clerk was not filing a monthly list of all cases heard by the court. The report states that the lapses in record keeping constitute noncompliance with legal requirements.

The report indicates that some court records were “filed in general disarray.”

A “poor” rating indicates that the court needs to significantly improve operations and also requires the auditor’s office to perform a 90-day follow-up to ensure that issues are being addressed.



Transparency

The audit was initiated last August, when a petition signed by 187 residents of Diamond was submitted to Newton County Clerk Kay Baum. Baum completed the verification of 175 signatures that day and relayed the petition to Schweich’s office.

According to former Alderman Dale Privett, residents who were concerned about financial problems in the city met several times before launching the petition drive. Privett said the primary concerns were an alleged lack of transparency in the city’s budget, and whether bidding practices, contract awards and equipment purchases were done properly.

Privett said Tuesday that although he has not had an opportunity to read the complete audit report, he believes the findings validate the concerns of the petitioners. He said he expects an upcoming audit of the city’s overall finances to turn up more irregularities.

Spence Jackson, a spokesman for Schweich’s office, said auditors have completed the field work for the audit of the city’s finances, and the final report should be released in about a month.

Privett said the sense of validation is tempered by the fact that several city officials who served during the time in question have departed.

“There aren’t any of them left from back then,” he said.

Mayor Shane Hunter said Tuesday, after reviewing the audit report, that he expected some issues to surface, but he did not expect the operations of the municipal court to receive such a low rating.

Hunter said he has met with the Board of Aldermen to determine how best to correct the problems. He said he knew when he was elected in April that the city was being audited.

“I inherited a headache,” he said. “I knew there would be some issues, but I didn’t know how many.”

The auditors’ findings on the municipal court do not bode well for the audit of the city’s overall finances, he said.

“I don’t know what to expect, but I’m really concerned about the results of the city’s audit,” he said. “I think if you asked the board, they’d say the same thing.”



‘Poor’ rating

ACCORDING TO THE OFFICE of Missouri Auditor Tom Schweich, a “poor” rating means that the agency that was audited needs to “significantly improve operations. The report contains numerous findings that require management’s immediate attention and/or the entity has indicated most recommendations will not be implemented.”