City of Carterville officials need to significantly improve their oversight of taxpayer funds according to a new report issued by State Auditor Scott Fitzpatrick

An audit conducted by the office of Missouri State Auditor Scott Fitzpatrick has identified multiple city funds in the City of Carterville with a negative balance because of the failure of city officials to adequately monitor the municipality's financial condition. The petition audit, which was triggered by the signatures of 203 Carterville residents, gives the city a "fair" rating while recommending that city officials closely monitor and take steps to improve the financial condition of the city's Water and Sewer Fund, which had a negative balance of more than $634,000 during the audit period.

"There are some very simple but very important things that officials in the City of Carterville need to do in order to improve the financial condition of the Water and Sewer Fund and their overall level of oversight of city funds. The City Council must take a more active role in monitoring the city's finances so it can make decisions that improve the condition of the Water and Sewer Fund as well as the other city funds that have a negative balance," said Auditor Fitzpatrick. "The good news for the people of Carterville is that we've given the city a roadmap for how to improve and it seems like city officials are taking our recommendations seriously. For everyone who signed the petition to initiate this audit, take pride in the fact your efforts will hopefully result in some much-needed changes to how your city government operates."

The audit conducted by Fitzpatrick's office found the city's Water and Sewer Fund is in poor financial condition as it had a negative fund balance of $634,029 for the year ended October 31, 2024. In addition, the Water and Sewer Contingency Fund had a negative fund balance of $24,839 and the Capital Improvement Fund had a negative fund balance of $5,013. The report notes this could have been noticed by the City Council if city officials were providing the proper financial information. However, the City Council is not adequately monitoring the city's financial condition, and does not receive budget-to-actual information by fund or accurate financial reports. The report points out the city performed a rate study in September 2025 and set new water and sewer rates in December 2025, but recommends the city take additional steps to address the financial condition of the city's Water and Sewer Fund in both the immediate and long-term future.

The audit report also found the City Council does not have adequate procedures to prepare or monitor budgets. City officials did not include all statutorily required elements in the budget prepared for the fiscal year ended October 31, 2024. Additionally, the City Council does not adequately monitor budget-to-actual receipts and disbursements, and actual disbursements exceeded budgeted disbursements for 8 of the 10 city funds during the year ended October 31, 2024. The report notes the city did not prepare budget amendments for these funds as required by state law. The audit recommends the city prepare annual budgets that contain all information required by state law and ensure budgets are adequately monitored and properly amended.

Another finding in the report documents how the city paid approximately $3,600 in bonuses to employees in November 2023 in violation of the Missouri Constitution. The Mayor indicated the City Council was unaware that bonuses for employees were inappropriate. City officials could not provide supporting documentation for 2 disbursements totaling $1,206, one of which was for a $515 Christmas dinner provided to city employees. City officials also failed to follow the city's written procurement policies. City officials did not solicit bids for playground equipment totaling $7,200, road salt totaling $5,800, and a salt spreader totaling $5,000.

Other findings in the report include a failure by the city to obtain annual audits of its waterworks and sewerage systems as required by state law; a failure to perform reconciliations for the city's Emergency Account and to consistently perform reconciliations related to utility services; inadequate mileage records for any of the police department vehicles to track the on duty mileage and commuting mileage from officers' homes to the city; closed meeting minutes that are insufficient and not compliant with the Sunshine Law; insufficient controls over the city's computers; an inadequate electronic communication policy; and a failure to maintain records of capital assets including office furniture in city hall and the police department, and equipment used by the public works department.

The full audit report for the City of Carterville is available here.