District I

Audit Finding Resolution Summary
Region I
East Central Missouri Solid Waste Management District
Date of Final Audit Report: April 22, 1999
For The Fiscal Years: 1992 - 1997
Date of Final Resolution: May 9, 2000

Note Icon. 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:
Interest Income Not Reported. Interest income was earned by the district in their checking account. The district did not report their interest income and the program did not deduct the interest income from outlays. Total interest earnings for fiscal years 1992 –1997 amounted to $9,587. The Department of Natural Resources’ (DNR) General Terms and Conditions (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." The auditor recommended the program reduce future payments to the district for the interest earned for fiscal years 1992-1997 ($9,587) or that the district obtain permission from the program to use this interest income for administration of the program.

District Response: 
The district is in receipt of correspondence that states the SWMP has determined that it is acceptable for districts to use accrued interest income for approved activities.

Final Resolution:
The DNR considers Finding 1 resolved as the district provided to the SWMP on March 2, 1999, a copy of a Dec.13, 1999, letter from the SWMP to all twenty districts giving permission to use and instructions as to how to use accrued interest income to comply with GTC, II.C. A copy of the minutes from the Feb. 8, 2000, district’s executive board meeting in which this issue was discussed was also provided. All documentation will be retained in the district’s permanent file.

Audit Finding and Recommendation:
Composition of the Executive Board.  The district’s executive board is comprised of five voting members and one non-voting member. RSMo, Section 260.315.4.(2) states that the council shall select seven persons to serve on the executive board. East Central Missouri Solid Waste Management District (SWMD) believes that the by-laws of the district were intended to demonstrate that an alternative management structure had been formulated and compliance to state regulations achieved. They cite DNR’s Model Plan Guidelines for Comprehensive Solid Waste Management, Chapter 3, under the heading Alternative Management Structure, "The district can determine the number of members to serve on the executive board, as well as their terms of office and the manner of selection and replacement for the members." However, East Central Missouri SWMD does acknowledge that they have not obtained from each local political subdivision member a letter approving the Alternative Management Structure. The auditor recommended that the by-laws, Alternative Management Structure, and approval letter from each participating local political subdivision member be submitted to DNR to demonstrate compliance with RSMo, Section 260.315.

District Response:
The district’s by-laws, which were revised and adopted June 1996 show that an alternative management structure has been formed and is in compliance with RSMo, Section 260.315. This issue is being re-affirmed by a resolution letter from each participating political subdivision.

Final Resolution:
The DNR considers Finding 2 resolved as the district provided a copy of its by-laws showing that the district adopted an alternative management structure as required by Section 260.300(3) RSMo. The district has also decided to re-affirm this structure by current resolution. A copy of the resolutions forwarded to pertinent entities was provided to the SWMP on March 22, 2000. The district has indicated that the signed copies will be forwarded to the SWMP upon their receipt, which are due to the district on April 15, 2000. This documentation was received on April 28, 2000. All documentation will be retained in the district’s permanent file.

Audit Finding and Resolution:
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. Additionally, DNR has no record of the district submitting Form 334, "MBE/WBE Utilization Report." The DNR’s GTC, II.W. and RSMo, Section 260.320.4 require the district establish policies which encourage the utilization of such disadvantaged enterprises. The auditor recommended the district procurement policies be amended to include the GTC provisions relating to the encouragement of utilizing disadvanteged enterprises. Appropriate documentation should be maintained in the file supporting submission of Form 334 "MBE/WBE Utilization Report" to the DNR.

District Response: 
The administering agency does have a MBE/WBE utilization policy in place. The executive board has also adopted this policy and the district’s by-laws will be amended by a vote of the full Council at their next meeting. Form 334 will be filed with quarterly reports.

Final Resolution:
The DNR considers Finding 3 resolved. The district provided to the SWMP on March 1, 2000, a copy of the administering agency’s policy, the district’s amendment to its by-laws and a copy of the executive board meeting minutes in which this issue was discussed and approved in compliance with GTC, II.W. The district provided a copy of the administering agency’s policy on March 22, 2000. All documentation will be retained in the district’s permanent file.

Audit Finding and Recommendation:
Evaluation Criteria Not Followed.  The district has a policy to review and rank district grant proposals that is lacking components of the criteria set by the DNR. 10 CSR 80-9.050(2)(c)3 states that the executive board shall evaluate each proposal that is determined to be eligible and complete according to the criteria required by the DNR. The board will also develop a District Targeted Materials List to be used as one of the evaluation criteria. The auditor recommended the district adopt the DNR’s evaluation criteria to be used in ranking future proposals.

District Response:
Evaluation criteria was revised to comply with 10 CSR 80-9.050(2)(C)3 and approved by the district’s executive board.

Final Resolution:
The DNR considers Finding 4 resolved. The district provided to the SWMP on March 1, 2000, a copy of evaluation criteria that was a part of its Fiscal Year 2000 (FY00) grant cycle and executive board meeting minutes in which this issue was discussed and approved in compliance with 10 CSR 80-9.050(2)(C)3. All documentation will be retained in the district’s permanent file.

Audit Finding and Recommendation:
Quarterly Reports Not Filed – District Grants. The auditor noted that quarterly reports for district grant 94103 were not submitted to DNR as required. 10 CSR 80-9.050(3)(B) states that "The district shall submit to the department at the end of each fiscal year quarter, a report…" The recipient had not submitted a report to the district. The auditor recommended that the district hold payment to the project recipient until all reporting requirements are met.

District Response:
A copy of page 3 of the application for financial assistance for FY00 is attached. This information will be stated in the subgrantee’s Financial Assistance Agreements as well.

Final Resolution:
The DNR considers Finding 5 resolved. The district provided to the SWMP on March 22, 2000, a copy of criteria from its application packet to potential applicants that outlines the district’s policy on reimbursements, quarterly/final reporting, and 15 percent withholding. The SWMP does not elect to take further action regarding previous late quarterly reports as this situation is no longer occurring and SWMP believes the district understands and intends to comply with this requirement in the future. All documentation will be retained in the district’s permanent file.