The Joplin Globe, Joplin, MO

January 23, 2013

Diamond city government receives ‘fair’ ranking on state audit

By Roger McKinney

DIAMOND, Mo. — Many small problems with no big problems earned Diamond city government a “fair” ranking on its state audit.

“These are not big problems, but they are cumulative problems,” said Missouri State Auditor Tom Schweich, who repeated some form of the phrase several times during his presentation Wednesday at Diamond City Hall.

The audit was initiated through a petition signed by a required number of Diamond residents. It examined procedures and finances from June 2010 to June 2012. The team from the auditor’s office spent about 500 hours on the audit, and it will cost the city around $25,000 or $26,000.

“If the recommendations are implemented, you’ll experience cost savings greater than that cost,” Schweich asserted.

Schweich said the city already has implemented about half of the recommendations, and about 90 percent of the recommendations are in progress. He complimented Mayor Shane Hunter and city officials for their response to the audit.

Among the issues found in the audit were:

• The city no longer allocates a portion of its sales tax revenue to parks and recreation as originally was included in the city measure that was approved by voters.

• Accounting duties weren’t adequately segregated.

“You cannot pass an audit if one person handles all the money,” Schweich said. He said Diamond was fortunate to have an honest person in that position.

“We did not find any evidence of theft, fraud or criminality,” Schweich said. “There is no segregation of duties. You have honest people working for you.”

• The city in April 2010 entered into an agreement with an engineering firm on a sewer construction project for $55,000, but the final cost was $115,000.

“There should have been better evaluation and selection criteria,” Schweich said.

• The city didn’t always seek bids on products and services over $5,000.

• The Board of Aldermen approved a 5 percent increase in water and sewer rates, but it didn’t provide documentation to support the increase.

Unbilled water loss increased from 783,000 gallons in July 2010 to 2.5 million gallons in June 2012. That’s nearly half of the water the city pumps.

“The city water loss is huge,” Schweich said. “It is the highest water loss rate I’ve seen since I’ve been auditor.”

He said no one knows where the water has gone.

“It’s literally money flowing into your streets,” Schweich said.

Hunter said after the presentation that the city has purchased new water meters that have improved the situation and is expected to correct it when all are installed.

• The city overpaid on its trash service contract.

• City officials don’t always follow the city policy regarding overtime pay. Five of seven employee time cards reviewed in the audit had errors.

• “One thing you did have that I’ve never seen before is the city has nine different bank accounts,” Schweich said. He said that wasn’t necessary for a town of 900 people. He said funds often are deposited into the wrong account. “This is something I actually haven’t seen before.”

• There were violations of the open-meetings law.

“We consider open-meeting violations to be pretty important,” Schweich said. “That was one of the more serious violations we found.”

The Board of Aldermen didn’t always cite a specific reason as required by the law for going into closed session. Based on the minutes of closed meetings, some issues discussed behind closed doors weren’t allowable under the Sunshine Law. Among the items improperly discussed in closed meetings were employee work hours, job descriptions and the court computer system.

A closed meeting on April 19, 2012, included the improper topics of online bill paying, email accounts for city board members and city budgetary procedures.

City officials in the audit report said they would fully comply with the Sunshine Law from this point.

Hunter said the city already has corrected many of the issues and is diligently working to correct the rest. He said that when Schweich returns to deliver his follow-up report in three to four months, he will find that the city is operating according to the auditor’s “excellent” standard.

“The city is growing strong,” Hunter said. He wasn’t mayor during most of the period in the audit, taking office in April 2012.

Patty Hardy was one of the residents who signed the petition seeking the audit.

“It was a lot better than I thought it would be,” she said of the audit report. “They’re working on it. It will take time.”

Kathleen Warden, another resident who sought the audit, said the report was informative. She said the current mayor is doing a good job of keeping people informed of issues.

“It was something that we needed,” Warden said of the audit.


“YOU’VE GOT A GREAT COMMUNITY you can be proud of,” Missouri State Auditor Tom Schweich said at the conclusion of his presentation.