Do you suspect fraud where you live? How Missouri residents can get their town audited

When Missouri residents suspect fraud, corruption or other abuses of power by their local government, they have a powerful tool to investigate: a state audit.

Under Missouri law, residents of a political subdivision – cities, school districts, taxing districts, etc. – can submit a petition forcing the Missouri State Auditor’s Office to conduct an audit. Petitions have spurred investigations in recent years that have documented significant problems.

An investigation by The Star shows how weak financial safeguards in small towns in Missouri and Kansas create the conditions for fraud and other misuse of public funds in local government. For years, state auditors in Missouri have documented significant problems through audits — including numerous audits started because of resident-driven petitions.

An audit report released last year following a petition in Cross Timbers found a city clerk had misappropriated more than $44,000 from 2017 to 2020. Another petitioned audit in Fairview revealed that officials violated the city’s own conflict of interest code when they paid a total of $17,325 in 2019 and 2020 to a business owned by the mayor at the time. In Orrick, a petitioned audit found the city gave bonuses to employees in violation of the state constitution.

Here’s how the process works and what you should know if you’re thinking about seeking an audit. Information about petition requirements and rules come from the Missouri State Auditor’s Office.

How do you start a petition?

Anyone can submit a petition audit request form to the Missouri State Auditor’s Office. The petition request form is available on this website: https://auditor.mo.gov/petition-audits.

The requestor doesn’t have to be a resident of the political subdivision. Individuals who gather signatures don’t have to be residents, either. The form includes space for the requestor to describe their concerns.

What are the requirements for a petition?

Petitions require a certain number of signatures, which are generally determined by how many voters cast ballots in the last election for governor in the political subdivision to be audited. Signers must be a resident of the political subdivision and a registered voter.

If fewer than 1,000 votes were cast, 25% of all registered voters must sign the petition.

For 1,000 to 4,999 votes, signatures equal to 15% of actual votes are required, with a 200-signature minimum.

For 5,000 to 49,999 votes, signatures equal to 10% of actual votes are required, with a 750-signature minimum.

For over 50,000 votes, signatures equal to 5% of actual votes are required, with a 5,000-signature minimum.

The Missouri State Auditor’s Office suggests getting more signatures than the minimum needed in case some are thrown out.

After I have the signatures, what do I do?

You have one year after the petition audit request form is submitted to provide signatures. The person who submits the signatures must live or own property within the political subdivision, and is known as the chief petitioner. The name of the chief petitioner is a public record.

The state auditor works with the local election authority to verify the signatures. If the petition is found to have enough signatures, the political subdivision is added to the list of upcoming audits.

Individuals can withdraw their signature from a petition up to 10 days after it is submitted. The form to remove a signature can be found here: https://auditor.mo.gov/petition-audits

Is a petition the only way to get an audit?

No. The governing body of a political subdivision can also request an audit, though whether that happens can depend on how open or defensive officials are to an inquiry.

But in municipalities, petitions are the only way to force an audit unless the governing body requests one. Missouri lawmakers this spring considered a bill that would allow the state auditor to initiate audits in municipalities without a petition or request, but the legislation didn’t pass before the end of session.

What are the kinds of things that have been found by petitioned audits?

In Orrick, a group of residents concerned with city finances amid rising water bills and the sale of the city water system led a successful petition effort in 2021 for a state audit.

An audit report released in December 2022 found the city violated the state constitution when the board of aldermen approved year-end bonuses of $175 to full-time workers and $100 to part-time workers. The board also paid a $1,000 bonus to the city attorney. The constitution prohibits bonuses after services are rendered.

City officials may have also violated the state constitution when it sold a property for $2,500 in 2018 for a multi-family housing development that never happened. The constitution prohibits public property from benefiting private individuals or organizations.

City leaders have downplayed the findings and emphasized that auditors found no misappropriation. They have instead directed attention to the $29,469 cost of the audit, which the city must pay.

In Cross Timbers, auditors reported that a city clerk had misappropriated at least $44,452 between 2017 and 2020. Auditors also found a former alderman received free utility services for several years, which he said was in exchange for helping a former maintenance supervisor. But auditors said the arrangement hadn’t been approved by the board of aldermen and also appeared to violate conflict of interest laws.

What happens after the audit is finished?

The Missouri State Auditor’s Office will release the report publicly. The reports typically come with an executive summary that includes key findings, along with a full report that’s more detailed and sometimes includes supporting documents.

Along with outlining any problems found, the report will include recommendations for how the local government can improve. But the auditor’s office can’t require local leaders to adopt the recommendations.

After an especially poor audit, the auditor’s office will sometimes conduct a follow-up report on how well local leaders have done in implementing recommendations.

What if I live in Kansas?

Kansas has no state auditor. The position was eliminated by the Legislature in the 1970s.

The Legislature maintains an auditing operation, called the Legislative Division of Post Audit, but it operates at the discretion of lawmakers. It’s often tasked with investigating policy questions and the performance of state programs and agencies – not digging into small town corruption.

If you want the Legislature’s auditors to investigate something, contact your state representative and state senator and ask them to seek an audit. You can also contact the Legislature’s Post Audit Committee, which votes on what audits to approve.

Municipalities with more than $275,000 in annual receipts or bonds must either have a financial audit or have their finances reviewed by an accountant, according to state law. But if that doesn’t apply to where you live, you can petition local leaders to have an audit conducted.

If a petition for an audit is signed by 20% or more of the voters who voted in the last election for local officials, the municipality must hire an accountant to conduct a financial audit.

Financial audits, often performed by certified public accountants, are not the same as the investigations conducted by the Missouri State Auditor’s Office or the Kansas Legislative Division of Post Audit. These state-level auditors typically examine the performance and procedures of a government agency, while CPAs focus on financial matters.