LAFAYETTE, La. (KLFY) — The Louisiana Legislative Auditor’s office has released its regular audit of Lafayette Consolidated Government, for the fiscal year ended Oct. 31, 2022.
The audit report had 29 findings, 12 of which were repeated from the previous year. Findings included missing policy controls over fuel credit cards, inconsistent contract terms and pricing for communication services to internal departments, incorrect accrual of construction project expenditures, misappropriation of cash register receipts at the municipal golf course and lack of complete purchasing documentation.
Other findings included no signed contract for a public works project totaling more than $1 million and an overdraft of $19.8 million related to a grant for construction of detention ponds.
The audit reported that LCG executed a Public Works project in the amount of $1,044,000 with a
contractor without obtaining a signed contract.
“In accordance with the Government’s Purchasing Policy, written contracts are required for all
construction contracts, annual contracts, and professional services contracts,” the audit reads. “The Government did not adhere to their internal policies and procedures.”
In its official response, LCG said the project cited, which was not identified, was performed under an emergency ordinance.
“During an emergency, LCG normally gets quotes as opposed to contracts due to time constraints. PPM 0150-1 Section 2(c) states ‘Contracts are used for purchases that involve labor and materials (construction), Professional Services, reoccurring purchases, annual contracts, etc.’ This language was intended to be examples of what contracts could be used for and not when they must be used. As such, the PPM will be revised to include specific language so no further misinterpretations occur. This project is expected to be completed within four months and will be overseen by the Interim Chief Financial Officer Lowell Duhon.”
The audit reported LCG had a grant-related fund participating in its consolidated cash account that recognized an overdraft of approximately $19,952,918 with approximately $19,800,000 being related to the construction of detention ponds within the unincorporated parish limits. The overdraft from this fund was allocated to the City General fund and reduced its average balance when calculating the distribution of monthly investment earnings.
“The Government may not have complied with their Home Rule Charter, policies and
procedures, and/or enabling legislation by improperly utilizing the resources of other funds
participating in their pooled cash account,” the audit said. “Management should review its funds participating in consolidated cash and determine the appropriate alternate funding source to utilize the proper resources should an overdraft occur. Specific project locations should be identified for reimbursement grants to identify the appropriate resources to utilize until funding is received.”
In its response, LCG admitted that the fund which recognized an overdraft included projects that
pertained to both City and Parish and therefore should have been allocated accordingly.
“The Government is in the process of selecting a new ERP system which we believe will be
helpful in correcting this finding,” the response said. “This project is ongoing with an expected completion date of November 2024 and will be overseen by Interim Chief Financial Officer Lowell Duhon.”
The audit said LCG had money stolen at one of their municipal golf courses by a Parks and
Recreation Department employee. A golf shop attendant was manipulating register transactions and not entering sales in their point-of-sale system to misappropriate cash collections. The audit reported LCG’s controls identified irregularities with the types of transactions entered into the point-of-sale system.
“The suspected employee was questioned by the Police Department on April 13, 2022 and
subsequently arrested after admitting to the misappropriation of cash collections for a period of
approximately three months,” the audit reads. “Since the sales transactions were not recorded or recorded incorrectly in the point-of-sale system, the amount of the misappropriation is unknown at this time. The person that committed the misappropriation is no longer employed by the Government. As of the date of this report, an arrest was made, charges have been filed, and the case is pending.”
The auditor said the case is currently closed and the Government received a restitution of $66 on Oct. 4, 2022. LCG’s official response noted it has implemented additional internal control measures, including requiring management approval of certain register transactions and video footage of the register area have been reviewed more frequently.
The audit reported multiple issues with LCG-issued fuel cards.
“The Government has active fuel cards assigned to assets that have been disposed, assets that
do not appear in the government’s records, unidentified assets labeled as miscellaneous, and assets that have not been used in excess of 120 days,” the audit reads. “Additionally, the Government has vehicles/equipment that require fuel usage that do not have an active fuel card assigned. The Government has active PINs for former employees, names that are not in the employee master file, and employees with minimal usage.”
The audit said the issues with government-issued fuels cards were first found in 2019.
“The Government has not fully implemented procedures to ensure active fuel cards are assigned to all vehicles within the Government’s fleet and to ensure active PINs are only assigned to current employees that require consistent use of the government fleet to perform their daily duties,” the audit read. “Inadequate policies and procedures for active fuel cards and PINs will not allow the Government to detect misuse or fraud in a timely manner.”
LCG responded with a list of new controls and procedured regarding the fuel cards.
“This project is expected to be completed within four months and will be overseen by Drainage Director Chad Nepveaux,” the response read.
The independent auditor also found improper use of money collected from sales tax, various public bid law violations and acquisition of certain property without an ordinance and at a price higher than appraised value.
Additionally, the auditor found improper use of money collected from drainage millage, improper suspension of utility late fees and noncompliance with reporting and monitoring requirements for U.S. Department of Housing and Urban Development and U.S. Department of the Treasury programs.
This audit, which was performed by the accounting firm of Kolder, Slaven & Company, LLC, is the regular, contracted state audit. The Legislative Auditor’s office has also begun a separate, investigative audit unconnected to this one.
Read the complete audit here: