A new report released today by Missouri State Auditor Scott Fitzpatrick details the Village of Leslie's struggles to perform essential duties such as preparing annual budgets and filing adequate financial reports, and failure to provide sufficient oversight for the city sewer system. The audit, which was requested by the citizens of the Village of Leslie, gives the municipality a rating of "Poor."

"As our audit shows, the Village of Leslie has failed to perform some of the most essential duties that are necessary for a municipality to be managed effectively, efficiently, and transparently. Our report gives the Board of Trustees actionable steps that can be taken to put the village on a better path to ensure their decisions are in the best interests of taxpayers," said Auditor Fitzpatrick. "I'm encouraged by the cooperation we have seen from the Board members to date, and urge them to continue working to put all of our recommendations into place."  

The audit describes how the village's Board of Trustees does not actively monitor or manage sewer accounts and fails to obtain sufficient financial reports from the contracted accounting firm performing accounting functions for the sewer system. Because of this lack of oversight, the Board is not monitoring sewer billings and accounts receivable, and can't be certain all money receipted by the accounting firm is handled properly and deposited into the village sewer account. The audit found the Board has not attempted to collect payments for 2 accounts with outstanding balances totaling $7,097 and $1,788 respectively. The Board also failed to stop billings for 4 accounts to which the village was no longer providing service. The Board is unaware when property owners change and the accounting firm's practice is to transfer the old owner's outstanding accounts receivable balance. The audit recommends the Board establish policies to monitor and manage the village's sewer accounts, including how to handle new owners, obtain financial reports and bank statements from the accounting firm hired to maintain the village sewer accounts, and to review the information to determine actions needed.

Additionally, the report explains how the Board has not developed a formal maintenance plan for the sewer system. The absence of routine, village-wide maintenance has left the village with minimal knowledge of the state of its sewer system, repair prioritization needs, and potential financial impacts. The Board has also violated state law by failing to obtain annual audits of its sewer system and has failed to perform a recent formal review, such as a cost study, of its sewer rates. Without current cost studies, it is unclear whether the rates assessed are set at an appropriate level.

The audit report also details how the Board failed to complete the village's 2023 property tax rate certification process. As a result, the Franklin County Clerk set the village's 2023 tax rate levy at zero. The village only received $839 in property tax revenues for the year ended March 31, 2024, compared to $6,843 received for the year ended March 31, 2023. Without having a property tax levy the village lost approximately $6,000 in property tax revenue.

The audit notes how the Village of Leslie has not prepared annual budgets for the years ended March 31, 2024, 2023, 2022, and 2021. The members of the village's Board of Trustees indicated they were not aware a budget needed to be prepared annually. As the report points out, a complete and well-planned budget is statutorily required and can serve as a useful management tool by establishing specific financial expectations for each area of village operations. The village also violated state law by failing to file adequate annual financial reports with the State Auditor's Office for the years ended March 31, 2023, 2022, 2021, and 2020, and failed to comply with state law by not publishing or posting semiannual financial statements as required by state law. The village did not timely file its financial reports for the years ended March 31, 2021, and 2020. Section 105.145.9, RSMo, requires political subdivisions to be fined $500 per day for missing filing deadlines, and as a result of the village's failure to timely file financial reports it owes $362,500 in fines, which stopped accruing on December 14, 2022, when the village filed its fiscal year 2020 and 2021 financial reports. Because the village does not impose a sales or use tax, the Department of Revenue (DOR) has not recouped any money from the village. The DOR further indicated if the village imposes such a tax in the future, the DOR would begin recouping the fine from any tax distributions the DOR would make to the village.

Other findings in the audit include the village having ordinances that are not organized, complete, or up to date; a vacancy on the Board of Trustees the village has not filled for years; the Board failing to comply with the village's procurement ordinance to solicit bids or obtain written contracts for services procured; the Board failing to ensure compliance with the Sunshine Law; and a failure to develop a records management and retention policy that includes electronic communication.

The complete audit of the Village of Leslie can be found here.