Audit & Compliance — Cornland Special Road District

Background

2022 State Audit

In 2022, landowners of the Cornland Special Road District petitioned for a state audit. The Missouri State Auditor conducted a review and issued Report No. 2022-077, with an overall rating of "Fair." The full report is publicly available through the State Auditor's office.

The district is committed to presenting the findings of this audit plainly and honestly, and to describing the concrete steps that have been taken in response.

Read Full Report No. 2022-077 →

A limitation on the audit itself

Before the findings, one matter from the report's Scope and Methodology section should be stated directly, because it bears on everything that follows.

The Board of Commissioners and the district's Secretary/Treasurer refused to provide the written representations the State Auditor requested. Among the representations withheld were that no records relevant to the audit had been knowingly withheld, and that they had no knowledge of any fraud or suspected fraud affecting the district. The auditor recorded that this refusal was concerning and may indicate that information potentially relevant to the audit was knowingly withheld from her office.

The district also did not provide a response to any of the six findings. Where the report would ordinarily record the auditee's answer, it records only that no response was given.

The current board takes a different position. The commissioners who made those decisions are no longer serving. This district now publishes its financial records, its FEMA project records, and the gaps in those records on this website, and it responds to records requests rather than declining them. That is a change in conduct, not an explanation of the prior conduct, and the board does not offer it as one.

Audit Findings

What the Auditor Found

All six findings from Report No. 2022-077 are reproduced below, with the auditor's specific detail where it is material. Nothing has been omitted or softened. Where the report is unflattering to individuals, including a former commissioner related to the current commissioner, it is stated as the auditor stated it.

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Finding 1 — Services Performed By Commissioners Commissioners received payments for providing road work for the district, creating an apparent conflict of interest. Additionally, the district did not report amounts paid to the Commissioners to the Internal Revenue Service as required by law (1099 forms).
Finding 1.1, conflicts of interest. During 2021 the district paid $3,015 to Commissioner Hill and $1,820 to Commissioner Dirks for road repair and maintenance. In January 2022 it paid a further $1,140 to Commissioner Hill and $683 to Commissioner Dirks. The auditor records that these payments were for hours worked at hourly rates ranging from $45 to $65, according to invoices maintained by the district, and that in February 2022 the district submitted most of these disbursements for FEMA reimbursement. A further $2,545 paid to Commissioner Dirks in 2019 and 2020 was reimbursed through the FEMA grant in 2021. The district also paid $2,380 in January 2022 to a business owned by a family member of Commissioner Anderson; the auditor notes Commissioner Anderson stated he abstained from that vote, but that the vote occurred at an informal Board meeting for which no minutes were kept. The auditor further found no documented Board approval of any of these arrangements before the services were performed.

The report cites Sections 105.454 and 105.458, RSMo, and — because these costs were claimed against a federal award — 2 CFR Section 200.318, which requires written standards of conduct covering conflicts of interest.

Finding 1.2, 1099 forms. The district had no procedure to prepare and file 1099 forms and did not file them for payments made to Commissioners in 2021.

These are the same payments discussed on the 2019 FEMA Project page, where the district sets out what supporting documentation it has been able to locate and what it has not.
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Finding 2 — Bidding Procedures and Written Agreements The district did not have a formal bidding policy. Bids or proposals were not solicited for gravel costing approximately $9,200 and rock hauling services costing approximately $4,400. The district also did not enter into written agreements for road work, rock hauling, or administrative services.
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Finding 3 — Oversight and Segregation of Duties The Board had not established adequate oversight or segregation of duties over financial accounting functions performed by the Secretary/Treasurer. Some district checks were signed only by the Secretary/Treasurer.
The report states this plainly and the district will not soften it: the Secretary/Treasurer during the audit period was Annette Anderson, and Commissioner Gary Anderson — her husband — assisted her with those duties as needed. The Secretary/Treasurer handled receipting, posting transactions, preparing invoices for payment, preparing and distributing checks, bank reconciliations, and financial statements. Four of the 22 checks issued during 2021 carried only her signature.
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Finding 4 — Sunshine Law The Board did not always provide public notice of Board meetings. Agendas and meeting minutes were not prepared. The Board had not adopted a written policy regarding public access to district records as required by state law.
Addressed July 23, 2026. The district adopted a written Policy on Public Meetings, Public Records, and Public Votes (PDF), which designates a Custodian of Records, sets out how records may be requested and the deadlines for responding, publishes the fee schedule, and states the district's meeting notice and minutes procedures. Meeting notices and minutes have been posted on this website since June 2026.
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Finding 5 — Budgetary Procedures and Financial Reporting The Board did not prepare annual budgets for district funds and did not file timely annual financial reports as required by state law.
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Finding 6 — Electronic Communication Policy The district had not developed a records management and retention policy in compliance with Missouri Secretary of State Records Services Division guidance, as approved by the Missouri Local Records Commission.

On each of the six findings above, the report records: "The Board of Commissioners did not provide a response." The district declined the opportunity to answer any finding. The recommendations attached to each finding therefore stand in the report without any position from the district at the time. The current board treats those recommendations as the working list of what has to be fixed; the section below reports progress against them.

Response & Remediation

What Has Changed

The following actions have been taken since June 2026 to address the findings of the audit and move the district toward full compliance.

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New commissioner appointed with compliance commitment Layne Anderson was appointed Commissioner and Trustee ex-officio Treasurer on June 10, 2026, by the Bates County Commission, with an explicit commitment to achieving and maintaining full compliance with all state requirements.
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FY2025 annual financial report filed — district now current The FY2025 Annual Financial Report was filed with the Missouri State Auditor on June 18, 2026. The district is now current on all annual financial report filings through FY2025.
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Insurance coverage restored The district's insurance policy lapsed in June 2024. Applications for coverage were submitted to MOPERM (Missouri Public Entity Risk Management Fund) and Missouri Rural Services Corp. on June 22, 2026. A liability coverage proposal was received from MOPERM on June 23, 2026, and the district signed and returned the coverage acceptance on June 24, 2026.
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Public transparency website launched This website was launched June 23, 2026 to provide the public with ongoing access to meeting notices, minutes, financial reports, and district news — directly addressing the Sunshine Law and transparency findings in the audit.
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Sunshine Law policy adopted and records request process established On July 23, 2026 the district adopted a written Policy on Public Meetings, Public Records, and Public Votes (PDF), directly addressing Finding 4. The policy designates a Custodian of Records, confirms the three-business-day response deadline under Section 610.023.3 RSMo, publishes the district's fee schedule, and records the district's meeting notice and minutes procedures. A public request form was added to this website the same day, so that records requests, road reports, and agenda item requests are received and logged with a timestamp.
The district currently has one sitting commissioner. The policy states on its face that it will be presented to the Board for ratification once additional commissioners are seated.
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Contact established with the State Auditor's office The district has made contact with the Missouri State Auditor's office to ensure ongoing communication and compliance guidance. The FY2025 annual report was filed on June 18, 2026. Payment plan discussions for the outstanding audit invoice are underway with the State Auditor's Fiscal Manager.
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Late-filing fines waived in full Under Section 105.145 RSMo, every political subdivision in Missouri must file an annual report of its financial transactions with the State Auditor within six months of the close of its fiscal year — June 30 for a district with a December 31 year end. When a district does not file, the State Auditor is required to report it to the Department of Revenue, and the district becomes subject to a fine of $500 per day. As Finding 5 above records, this district filed late in several years and did not file at all for 2018, and fines were assessed against the district as a result.
Those fines have been waived in full. House Bill 199, enacted in the 2025 legislative session and effective August 28, 2025, amended Section 105.145 to provide that a political subdivision that has not levied or collected sales or use taxes in the fiscal year at issue is not subject to the fine. The Cornland Special Road District has never levied a sales or use tax; its revenue comes from a property tax levy and County Aid Road Trust (CART) distributions. The district received written confirmation of the waiver from the Department of Revenue in June 2026.

No district funds were paid toward these fines. The statute directs the Department of Revenue to collect such fines by withholding sales and use tax distributions, and this district receives none.
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Board composition and governance being reviewed The district is actively working through questions of board seat status, vacancy filling, and proper governance procedures under Chapter 233, RSMo — including meeting notice requirements and the adoption of bylaws. The county commission has been contacted regarding these matters, and the district is consulting appropriate resources to ensure it proceeds correctly.
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1099 filings being brought current The audit identified that required 1099-NEC forms were not filed for certain payments made by the district in prior years. The district has identified the applicable payment records and is working to file the outstanding forms. Going forward, proper information reporting will be maintained as part of routine year-end procedures.

Two separate matters, often confused. The late-filing fines described above came from the Department of Revenue and have been waived in full. They are not the same thing as the State Auditor's invoice for the cost of conducting the 2022 audit. That invoice, in the amount of $25,088.83, remains outstanding, and the district is in discussions with the State Auditor's Fiscal Manager regarding a payment plan. The waiver of the Department of Revenue fines has no effect on it.

Commitment

Statement of Commitment

The Cornland Special Road District is committed to transparency, accountability, and full compliance with Missouri law. The findings of the 2022 audit represent a serious record of prior mismanagement, and the current board takes that record seriously. This website, the timely filing of financial reports, the restoration of insurance, and ongoing communication with the State Auditor's office are steps toward rebuilding the district's record of responsible governance. The board will continue to report publicly on its progress.