Audit finds big problems in Carterville’s water and sewer fund
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Carterville’s water and sewer fund fell more than $634,000 into the red as city leaders failed to adequately monitor spending, follow bidding rules and comply with several state requirements, according to a Missouri state audit.
During the fiscal year ending Oct. 31, 2024, the water and sewer fund collected about $963,000 but spent more than $1.7 million. The fund began the year with nearly $107,000 and ended with a negative balance of more than $634,000.
Auditors also found actual spending exceeded budgeted amounts in eight of the city’s 10 funds. Water and sewer spending exceeded its budget by more than $1 million, while general fund spending went over budget by about $886,000. City officials did not amend the budgets as required.
The audit raised additional concerns about Carterville’s water system. From January through April 2025, the city’s calculated water loss ranged from 52% to 63%. Missouri’s standard is 10%.
City officials said they have received grant funding for engineering studies and are working to identify leaks, faulty meters, billing problems and other infrastructure issues.
The audit also found the city paid employees about $3,600 in bonuses in November 2023, which auditors said violated the Missouri Constitution. City leaders said the payments stopped in December 2024.
Auditors found the city failed to seek bids for $7,200 in playground equipment, $5,800 in road salt and a $5,000 salt spreader. The spreader was purchased from a city councilman’s son after the councilman abstained from voting. City rules require formal bids for purchases of $2,000 or more.
Other findings included missing documentation for about $1,200 in spending, incomplete records for closed meetings, shared employee passwords, a lack of vehicle mileage records and no monthly reconciliation of an emergency account that handled about $500,000 in grant money.
The audit also determined the city had not completed annual audits of its water and sewer system as required by state law and bond agreements.
City leaders said several corrective steps are underway. Water and sewer rates were increased in December 2025, and officials pledged to provide monthly financial reports, monitor budgets, follow bidding requirements and improve oversight of the utility system.
The city disagreed with part of the Sunshine Law finding involving a closed meeting about repairs to a water well. Auditors responded that the meeting minutes did not mention the potential legal action the city claimed justified closing the meeting.
