Butler County has received the second lowest rating possible on a routine audit by the state. The results of the audit appear to mean the county will need to pay back more than $200,000 in over-collected property taxes, something officials say may bring significant stress on the county’s finances.
The public administrator’s office has been questioned for what auditors say is collection of “excessive fees,” and commissioners are being questioned about a raise given to Butler County Sheriff Mark Dobbs of more than $21,000 over two years. Auditors say this raise violated state rules for a mid-term elected official and must also be paid back, Dobbs maintained the raises were supported by actions of the state legislature.
“That’s a legal opinion (the auditor) is not qualified to give,” Dobbs asserted. “This auditor is trying to grab a headline to run for higher office one day. He’s citing laws as if he were a judge or a lawyer, and he’s not.”
Several officials have said problems with county procedures were inherited from previous officeholders and are being corrected.
Presiding Commissioner Vince Lampe said, “I personally think we’ve corrected most everything that they’ve wrote us up on.” He argued there were a number of new elected officials taking over problems from previous administrations.
“We all make mistakes,” Lampe stated, “I don’t think the elected officials meant to do it. I think that it was just a minor mistake, and I don’t think it’s going to hurt anybody in any big way because that audit was conducted for a three year period.”
He expressed, “I don’t believe there was anybody trying to harm our county or steal from our county or anything else as the way some of that read in that audit.”
Routine audit
Butler County received an overall rating of “fair” from Missouri State Auditor Scott Fitzpatrick due to several significant discrepancies, according to a document released this week. The state auditor is required to evaluate the county once per term of its elected officials.
The report noted issues with the public administrator’s excessive fees, inadequate reviews of the property tax system, the county collector’s improper withholding for the Assessment Fund, the prosecuting attorney’s office not following up on 137 outstanding checks, unauthorized salary increases by the county commission for the county sheriff, excessive county credit card limits, $222,770 in excess property taxes collected due to improperly calculated sales tax rollback by the county clerk, absent Sunshine Law policy, poor data security, nonexistent records management policy, and improper controls for contracts with the Board for the Care of the Handicapped.
Public Administrator
The auditor found the public administrator, Jeff Darnell, charging wards, “excessive and unreasonable fees that did not reflect the actual time spent to handle ward finances. As a result, a significant portion of some wards’ income is being used to pay public administrator fees and offset office costs.”
Darnell remitted to the county collector $81,890 in 2022. The report noted he set a rate of $45 per hour and, “pre-set time frames for some tasks, such as three hours for preparing annual settlements and 30 minutes for performing bank reconciliations in the computer system.”
The auditor stated Darnell did not have proper documentation to show how the fee regimen was determined or monitored.
“The standard fee for preparing or reviewing annual settlements (three hours) resulted in $135 charged to each ward regardless of the ward’s financial activity, and it is unlikely a ward’s annual settlement would need three hours to review or prepare if the ward had limited financial activity,” the auditor remarked.
In addition to the excessive fees, the report found Darnell did not file the needed annual and final settlements in a timely manner. For the observed wards, “We noted the public administrator filed all applicable settlements after the due date.”
Seven settlements were late from a range of 447 to 952 days. One was past due by 1,743 days.
The report noted three of these late settlements were leftover from the previous public administrator’s term. A similar state of affairs was found in the previous two audits.
In addition to being late with settlements, the auditor found Darnell to be late with ward bill payments. One telling incident showed the public administrator paid for late room and board bills using two separate checks.
When questioned on this action, “The deputy clerk indicated they did not want the probate court to question one large payment.”
The audit stated Darnell did not properly segregate accounting duties, document reviews, and signature stamp use. The three deputies with access to signature stamps did not use their initials to show which individual used the stamp.
“The public administrator indicated he has a small office, and he did not consider the importance of segregating duties. The public administrator also indicated he did not realize the importance of safeguarding the signature stamps and identifying the clerk that used them,” the auditor stated.
For the auditee’s response, the public administrator’s office said the backlog and lack of training are to blame for excessive fees and late payments.
“We followed the direction and approval of the courts in order to ensure we are not charging excessive and unreasonable fees,” the response rebutted.
Regarding late settlements and payments, the auditee said, “All efforts are in place to improve timely filing (and payment).”
Darnell stated the charging regimen was inherited from the previous administration. He did not know how long before his tenure the rates had been in place.
“It was a mess when I took over,” Darnell asserted. “We’re going to take all of their recommendations, we’re going to get it all fixed.”
He also pointed to the ongoing switch to e-filing as a time saving measure to reduce costs for wards. Regarding the backlog and delays, Darnell stated probate Judge John Shock directed which cases to work on.
“I told the judge, we’ll do what you tell us to do,” he added.
Darnell maintained the backlog and charging regimen of the public administrator’s office will be taken care of in time.
“Early on, it took a lot more time because we couldn’t find documentation,” he informed.
Darnell said the move to paperless documents and e-filing would take care of both issues.
Property Tax System
The auditor found County Clerk Donna Hillis and the county commission, composed of Don Anderson, Dennis LeGrand, and presiding commissioner Vince Lampe, were not properly monitoring the collection of property taxes. County Collector Emily Parks took in $33.5 million in taxes in 2023.
The auditor found the county clerk’s account book was missing entries, did not record all taxes collected, and did not match the county collector’s submitted annual settlements. The report remarked the previous audit of the county showed a similar condition.
The auditor found the county clerk and county commission did not properly review additions to property tax and abatements. In August 2023, the collector ceased providing real property additions and abatements.
As a result, County Assessor Chris Rickman aggregated the data by hand.
“Neither the county collector’s nor assessor’s reports included reasons for the additions or abatements, and the county commission did not request this information because it did not know it was available,” the report said.
The auditor noted no comparison of additions or abatements between the collector’s system and the assessor’s report was taking place.
The auditee’s response asserted the county clerk and the county commission, since 2024, have rectified the issues in the audit for financial review.
County Collector’s Controls and Procedures
The report indicated the county collector’s office needs improvement in its controls and procedures.
The auditor found, “During the year ended Dec. 31, 2022, she withheld $68,740 more from tax collections for the Assessment Fund than allowed by state law and disbursed less funds to taxing authorities.”
The total amount withheld by Parks was $143,740, while the state maximum is $75,000.
“The county collector stated she believed the county assessor’s office was responsible for paying this overage back,” the auditor relayed.
The report also found an absence of procedures to follow up on outstanding checks. As of Feb. 28, 2023, there were 82 outstanding checks totaling $18,757 without proper investigation.
“Procedures to track, routinely follow up on, and reissue outstanding checks, as appropriate, are necessary to prevent the accumulation of money in the account and to ensure funds are disbursed to the appropriate payees,” the auditor informed.
Finally, the report showed the county collector did not compare the protested tax account balance to a list of liabilities. Due to this discrepancy, the county collector had unidentified balances totaling $100,540 across the main, protested tax, and drainage bank accounts as of Feb. 28, 2023.
For the auditee’s response, the collector’s office said the county switched banks in 2010, resulting in a substantial portion of the unidentified balances. The collector also committed to putting “void after 90 days” on all new checks issued.
Prosecuting Attorney’s Controls and Procedures
Prosecuting Attorney Paul Oesterreicher’s office had 105 checks amounting to $18,720 for the restitution account and 32 checks totaling $4,444 for the bad check account left outstanding for more than a year.
The auditor found a similar issue with the unidentified balances as with the county collector’s office. The report showed an unidentified balance of $2,148 as of Dec. 31, 2022. The prosecuting attorney responded by saying the balance is made up of interest accumulated before 2019.
“However, the office was unable to obtain records confirming this,” the auditor stated.
Sheriff’s Compensation
The auditor also found the county commission authorized $21,732 in mid-term salary increases to Butler County Sheriff Mark Dobbs, “in violation of constitutional provisions and state law.”
The audit stated no increases in annual pay for the sheriff are permitted in the middle of an elected term except if there is no existing compensation, new duties are assigned outside of the normal functions of the sheriff, or the mid-term increase is the result of a statutory formula.
Dobbs started his current term in 2021.
“None of these circumstances exist; therefore the increase to the sheriff’s salary should be effective only for any sheriff elected and sworn into office after the new salary schedule was authorized,” the auditor informed.
Furthermore, if an increase is over $10,000, it must be spread over a five-year period. The report found the commission conferred with legal counsel on the issue but did not receive written permission to authorize the salary increase. Dobbs received an increase of $4,699 and $17,033 in 2022 and 2023 respectively.
The auditor stated the raises needed to be spread out over five years as required by state law. The county commissioners stated they thought they were adhering to the regulation.
The auditor recommended that, “The county commission discontinue the mid-term salary increase and consider various methods for possible recoupment of money already paid.”
The auditee’s response indicated the commission would discuss possible restitution with legal counsel. Dobbs strongly disagreed with the findings of the audit and stated his intention to not comply with the recommendation to recoup the raise.
He maintained the raises were supported by actions of the state legislature.
“That’s a legal opinion (the auditor) is not qualified to give,” Dobbs asserted, “This auditor is trying to grab a headline to run for higher office one day. He’s citing laws as if he were a judge or a lawyer, and he’s not.”
The sheriff is referring to Missouri Senate Bill 510 which authorized a $6,000 bump regardless of the salary schedule.
The bill also, “repeals the provision that the salary commission of any third class county may amend the base schedules of county officials to include certain assessed valuation factors.”
Butler County qualifies as a third class county. Dobbs maintained both raises were authorized by SB510.
“After the first raise, there (were) legal opinions given that... there’s actually nothing in the law to say that the commissioners couldn’t grant that raise,” he stated, “That was just a guideline or a ceiling of sorts.”
Dobbs reiterated he did not intend to comply with the auditor’s recommendation to repay the raises.
“I suppose if he wants to take the matter to court, a judge can decide that,” Dobbs expressed. “Apart from that, I will rely on the law as it’s written and not his opinion.”
Lampe echoed the sheriff’s sentiment.
“I went under legal advice on that,” he contended, “(The state legislature) mandated us to do that raise.”
County Credit Cards
Next, the credit limits for officials’ cards were determined to be more than necessary.
The auditor wrote, “Excessive credit card limits and purchasing ability increased the risk of abuse and potential large liabilities for the county.”
The sum credit limit across the 12-county credit cards was $116,500 in 2022. The auditor said the limits were excessive given the small portion actually spent by those issued a card.
The report showed the presiding commissioner, human resources director, county clerk, and county assessor used at most 9% of their $20,000 limits. Similar numbers were cited for the Juvenile Office and the County Road and Bridge Department.
The auditee stated the county is in contact with the credit card companies to lower the credit limits to $2,500 each.
Sales Tax Rollback
For the sales tax rollback, the report showed that $222,770 in extra property taxes were collected for the years 2020-2022.
“The county is required to estimate the annual property tax levies to meet the 50% reduction requirement and provide for an adjustment for actual sales tax collections of the preceding year that are more or less than the estimate for the preceding year,” the auditor explained.
The report attributes the over-collection to a failure to account for the interaction between estimated and actual sales tax collected by the county clerk. Hillis stated she used the previous clerk’s method to calculate the tax.
The audit recommended re-examining the formula and ameliorating the incorrect collection of property taxes. The auditee agreed to immediately implement the correct tax rate.
However, the plan to correct the over-collections may bring significant stress on the county’s finances.
“The county clerk notes that taking an additional reduction in the tax rate in any one given year will prove to be a burden on the budget of the county,” the auditee affirmed, “The county clerk will make a recommendation to the county commission to take a voluntary reduction in odd years in order to recapture a portion of the amount over collected.”
Lampe said the formula used for calculating the tax had been in use for years prior to Hillis’ tenure. Doing some calculations of his own, he claimed each resident was only over-charged $1.61 per year.
“To me, that’s pretty minute,” Lampe said.
Other Issues
The report also noted the county commission’s state-mandated Sunshine Law public access policy for public records was absent. The auditor found the electronic data security regimen of the county to be lacking in several areas.
The report recommended mandatory changing of passwords, automatic locking of computers, and throttling login attempts.
On the subject of electronic communications, the auditor found the county had, “not developed a records management and retention policy ... in compliance with the Missouri Secretary of State Records Services Division guidance.”
Finally, the report said the Board for the Care of the Handicapped did not put proper controls in place for the funding of not-for-profit entities such as progress reports, monthly financial reports, and personal property records.
“The contracted NFP entities did not provide the board information required by the contracts,” the auditor wrote.
The auditees agreed to implement the recommendations of the report for all of these last issues as soon as possible.
Lampe concluded, “I feel I still need further speaking with the auditor’s office.”
He said he would take every action to correct the problems pointed out by state auditor.
“I’m going to work as hard as I can to make it right,” Lampe emphasized, “I believe in our elected officials at the county.”
Editor's note: The story was updated at 3:10 p.m. to add comments form Presiding Commissioner Vince Lampe.
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