Carterville officials respond after audit reveals massive water and sewer deficit

Carterville, Missouri, officials acknowledge that poor recordkeeping, limited oversight and repeated staff turnover contributed to problems uncovered by a state audit.

The citizen-requested audit gave Carterville a “fair” rating and found its water and sewer fund was in poor financial condition.

For the fiscal year ending Oct. 31, 2024, the fund recorded about $963,000 in revenue and $1.7 million in disbursements.

It ended the year with a negative balance of $634,029.

Mayor Alan Griffin stressed to Newstalk KZRG that the figure represents a deficit, not missing money. “There’s no missing $634,000,” Griffin said. “It’s just a negative balance.”

City Administrator Jonathan Cook joined the city near the end of the audited year. He said the records contained duplicate entries and transactions assigned to the wrong funds. The city later hired a certified public accountant to review thousands of transactions and correct its records.

Cook said Carterville is not disputing the report because its findings accurately reflect the records the city initially provided.

The audit found the problems went beyond bookkeeping. Water and sewer expenses had outpaced revenue for several years, indicating the city’s rates were insufficient. Carterville completed a rate study in 2025 and later increased its base water and sewer rates.

Auditors also found that eight of the city’s 10 funds exceeded their approved budgets and required budget amendments were not completed. The City Council was not receiving accurate financial reports or comparisons of budgeted and actual spending.

Griffin attributed the problems to employee turnover, accounting software issues and a shortage of workers experienced in municipal finance. Officials said Carterville went through about six city clerks during the period.

Cook said the city has since strengthened its oversight. A finance committee now reviews bills and financial activity every two weeks, while the council receives monthly reports showing fund balances and spending.

The audit also found Carterville paid about $3,600 in employee bonuses in November 2023 in violation of the Missouri Constitution. The city ended that practice in December 2024.

Other findings included failures to seek competitive bids, maintain supporting documents for some spending and obtain required annual audits of the water and sewer system. Auditors also cited problems with bank reconciliations, computer security, property records and compliance with Missouri’s Sunshine Law.

City officials agreed to implement the auditor’s recommendations.

“That’s what the taxpayers deserve,” Cook said. “Now we have to get to work and improve things.”