Auditor gives city of Sparta worst rating

The state auditor released her audit of Sparta Wednesday, giving the city the worst rating available — "poor."

Residents of the small town in Christian County petitioned for the audit in 2015. The audit addressed several issues facing Sparta, including some that city leaders have previously spoken about, like overspending at the police department and high turnover in city offices.

The audit laid blame at city leadership, saying the Board of Aldermen "failed to adequately monitor the city's budget, cash balances, and other transactions of the city."

According to the audit, here are some of Sparta's other problems: Financial records are not complete, funds aren't consistently accounted for, city budgets were published late and with inaccuracies, payroll records have mistakes, and there's no formal policy for public record requests.

The auditor, Nicole Galloway, spoke with the News-Leader on Wednesday afternoon, saying city leadership appeared to know there were problems. What leaders didn't seem to know was the depth of those problems, she said.

She compared the situation to an individual who's not checking his or her bank account, then ends up overdrawing from that account.

Galloway pointed out that Sparta had about 20 bank accounts, but those accounts comprised only three budgeted funds — sewer and water, general and police. The city said it's working on paring the bank accounts down to eight, which Galloway called a "definite start."

The audit found that between 2012 and 2015, the police fund continually spent more money than it brought in, digging a hole that was more than $200,000 deep.

That deepening hole was covered by borrowing money from other city coffers, like the water, general and street funds.

While utility rates did not appear to be inappropriately affected by this, Galloway said using funds for utilities to pay for police is not allowed under state law.

The audit suggested that Sparta cut back on spending and evaluate how it monitors spending.

The audit also said the city knew about some of these problems after an independent audit in 2013, and that some problems showed up again in 2014 and 2015 audits.

"Weaknesses identified in that audit included deficit budgeting for the Police Fund, misuse of Water and Sewer Funds to subsidize Police Fund expenses, failure to amend the budget when needed, failure to properly allocate some revenues and expenses, and failure to adopt an investment policy," the state audit said.

The audit also said turnover negatively impacted how records were kept by the city. In 2015 , the city clerk, the court clerk and the utility clerk resigned, in addition to two Certified Public Accountants terminating their service with the city.

The audit contained responses from the city of Sparta. Those responses largely agreed with findings of the audit and pointed to work already being done to remedy the city's problems.

Galloway presented the results of the audit to more than 50 people who came to the Sparta Middle School Wednesday night. After a 30-minute explanation of her findings, Galloway took several questions from the audience.

One person asked what the audit cost, and Galloway said it cost the city of Sparta about $35,000.

Doreen Cagle, one of the initial organizers of the petition drive for the audit, then said residents were told the audit could cost anywhere between $15,000 and $35,000, so why did the audit cost the maximum?

Galloway explained that the cost was based on the work needed for the audit.

Rep. Lynn Morris, R-Nixa, was in attendance. He asked how many hours went into the audit, to which Galloway replied about 765 hours.

Galloway said because Sparta received a "poor" rating, there will be a follow-up report conducted in three to six months that will evaluate Sparta's progress.