The State auditor’s office has completed the audit of the City of Chula. Four findings have been noted, including one area that resulted in daily fines that total over $1.1 million as of June of this year.
Under Accounting controls and procedures…
The Board of Aldermen has not established adequate oversight over various financial accounting functions, including receipting and depositing money, and reviewing and approving annual budgets in a timely manner.
The Board overlooked the existence of a city bank account, and related certificate of deposit, that was established prior to April 2014 for the city’s community center operations. As a result, activity and operations within this account occurred without oversight from the board.
The city did not file annual financial reports with the State Auditor’s Office as required by state law for each of the 7 years ending June 30, 2024. As a result, a daily fine is actively accruing on the city. According to the Department of Revenue (DOR), the city’s total fine is $1,159,000 through June 30, 2025.
Because the city does not impose a sales or use tax, the DOR indicated if such a tax were established in the future, the DOR would begin collecting the fine from any tax distributions to the city.
The city has not obtained annual audits of its combined waterworks and sewerage system as required by state law.
The city does not publish or post semiannual financial statements as required by state law.
A sunshine law violation was also noted as a finding.
The City of Chula Board of Aldermen conducted a meeting without a quorum and approved a new ordinance under the mistaken belief that a quorum was present.
The city has not established a policy that includes electronic communication in compliance with the Missouri Secretary of State Records Services Division guidance, as approved by the Missouri Local Records Commission.
The State Auditor’s office gave the City of Chual a “FAIR” rating. This indicates the city needs to improve operations in several areas. The report contains several findings, or findings that require management’s immediate attention.
The city filed a 16-page response to the findings.
The full audit can be found by following the link below.
https://auditor.mo.gov/AuditReport/ViewReport?report=2025094&token=7215137949
