This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0543 - State Auditor To Audit Certain Political Subdivisions
L.R. NO. 2241-01
BILL NO. SB 543
SUBJECT: Audits: Urban School Districts and Cities
TYPE: Original
DATE: January 8, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
General Revenue ($372,745) ($440,440) ($451,877)
Total Estimated
Net Effect on All
State Funds ($372,745) ($440,440) ($451,877)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Local Government* $0 $0 $0
*Does not include potential savings of approximately $400,000 if the urban
school district audits conducted by the State Auditor's Office would replace
the current external audits . It also does not include potential losses of
state aid under the Foundation Program to districts that do not comply.
FISCAL ANALYSIS
ASSUMPTION
Officials from the Office of the State Auditor (SAU) assume they currently
have offices located in St. Louis and Springfield, therefore, it is assumed
that audit work would be performed by the staff assigned to that office with
minimum travel cost being incurred. At the present time, SAU does not have a
Kansas City office location, therefore, staff would be assigned out of the
Jefferson City office and travel cost would be incurred for those audits in
the Kansas City and St. Joseph area.
The SAU assumes the following additional FTE would be necessary to perform
audit work as required to examine all funds received: 2 FTE Senior Auditor I
(each at $30,000 annually), 2 FTE Staff Auditor II (each at $28,000
annually), 2 FTE Staff Auditor I (each at $24,500 annually), 4 FTE Audit
Assistant (each at $23,400 annually) and .5 Manager (at $50,556 annually).
The Oversight Division assumes the Audit Manager duties could be absorbed
within the existing staff. The SAU assumes they would need five computers
and software costing $15,000 and the audits would require travel costs of
$180,208 annually. The Oversight Division assumes travel costs would be
$76,800 annually. Miscellaneous office expense would include communication,
EDP services, office supplies and postage costing $6,000 annually.
Officials from the Office of the Attorney General (AGO) assume they would
need an additional .25 Assistant Attorney General I to handle potential
litigation over the aspect of "lawfully requested information" and the
potential denial of school foundation formula monies over non-compliance
related to this issue. In addition, AGO has included associated equipment
and expense costs for the .25 FTE. However, the Oversight Division assumes
the AGO could absorb any additional duties with existing staff and therefore,
has not included the costs in the fiscal impact specifications below. If the
passage of more than one similar bill would result in a significant increase
in workload, then AGO could request increased appropriations through the
normal budget process to cover the cumulative administrative costs.
Officials from the Department of Elementary and Secondary Education (DES)
assume the proposed legislation would have no fiscal impact on their agency.
However, school districts which do not comply will be ineligible for state
aid under the Foundation Program until it complies. School districts that
could be affected include St. Louis, Independence, Kansas City, Springfield
and St. Joseph.
Officials from the St. Louis Public School District, City of St. Louis,
Kansas City Manager's Office and City of St. Joseph assume they would have no
fiscal impact as a result of this proposal.
In a previous similar proposal, the St. Louis Public School District noted
they paid approximately $150,000 annually for an independent audit and Kansas
City noted they paid $250,000.
Therefore, the Oversight Division assumes there could be an annual savings of
approximately $400,000 if the State Auditor's Office audit replaced the
external audits. This savings could affect state and local government.
Officials from the Kansas City Public School District did not respond to our
fiscal impact request.
FISCAL IMPACT - State Government FY 1997 FY 1998 FY 1999
(10 Mo.)
GENERAL REVENUE FUND
Costs-State Auditor's Office (SAU)
Personal Service (10 FTE) ($220,888) ($271,692) ($278,484)
Fringe Benefits (67,857) (83,464) (85,550)
Expense and Equipment (84,000) (85,284) (87,843)
Total Costs - SAU ($372,745) ($440,440) ($451,877)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND ($372,745) ($440,440) ($451,877)
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
$0** $0** $0**
** This does not include potential savings of approximately $400,000 if the
audits conducted by the State Auditor's Office would replace the current
external audits. It also does not include potential losses of state aid to
school districts that do not comply.
DESCRIPTION
This proposal would allow the State Auditor's Office to periodically audit
urban school districts which received at least thirty percent of its total
revenue from the state. Additionally, the proposal would allow the State
Auditor's Office to periodically audit any city which levied an earnings tax
pursuant to sections 92.110 to 92.300, RSMo, during the previous year. These
audits would be made at no cost to the school district or city and would
examine local, state and federal funds received or expended by the district
or city in the audit period. Any school district which failed to provide
information as requested by the State Auditor's Office would be ineligible to
receive state aid until such time as the auditor determined the district had
fully complied.
This proposal would also require that county audits be spaced four years
apart. Currently, they are required to be as near the end of the term as
possible.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Office of the State Auditor
Department of Elementary and Secondary Education
Office of the Attorney General
St. Louis Public School District
City of St. Louis
Kansas City Manager's Office
City of St. Joseph
NOT RESPONDING: Kansas City Public School District