State audit critiques Parish GovernmentOct 21st, 2013 | By Candace Griffin | Category: Top Story
An audit of parish finances by Legislative Auditor Daryl Purpera notes that some of St. Bernard Parish Government’s accounting policies and procedures are sub par, along with a few other criticisms.
Parish officials have stated that these inadequacies were due to personnel changes and timing issues, and that they are in the process of rectifying the concerns in the report.
“Some of these findings were already in the process of correction through the positive change in the finance department—our new Finance Director,” said Council Chairman George Cavignac.
Councilman at Large East, Guy McInnis noted that the constant changing of department heads during new administrations has a negative effect on the Parish’s ability to handle issues. He stated that these department heads, most importantly the Finance Director, should be independent of any elected official—”they need to be autonomous.”
“Until we can provide this government with continuity of its top officials,” said McInnis, “we are going to continue to have these types of write-ups.”
The audit also found that St. Bernard Parish Government:
▪ Lacks adequate policies, procedures and related internal controls to prepare accurate and complete financial statements on a timely basis and did not have controls to ensure capital assets were accounted for promptly.
▪ Allowed the same employee to add new vendors to the accounting system; input invoices; decide which checks would be paid; and process, print and sign checks with a rubber stamp. Auditors said those duties should not be concentrated in the hands of one person.
▪ Lacked a formal process to administer computer access for new employees and delete computer access for terminated workers. It also said that non-information technology employees have the same access to the accounting system as IT workers.
▪ Identified assets that were destroyed in Hurricane Katrina in 2005 but not previously recorded.
▪ Did not have controls in place to ensure expenditures were reported on a timely basis.
The Parish Government sustained two thefts in 2012.
One of the thefts was bleachers valued at $100,000 that were sold as scrap. This theft resulted in arrests, and the parish received about $96,000 in insurance proceeds.
The second theft was approximately $1,100 in proceeds from a parish-operated recreational boat facility.
The audit said the money was taken home by an employee for safekeeping, but the employee’s home was vandalized and the money was stolen. The parish government notified the police of the boat rental theft, but no arrests were made, and restitution was not received by the parish.
St. Bernard officials said they have reviewed the circumstances related to the two thefts and improved controls to ensure that incidents of this nature do not happen in the future.
According to Ross Gonzales, the Parish’s Finance Director, in order to stop this from happening again all money will be turned over to management, who will then give it to the Finance Department. This department will then make the bank drop-off.
The audit disclosed that eight parish funds including sanitation and garbage funds, had deficits totaling about $30 million. The largest being a $25.2 million federal block grant fund for disaster recovery. The Garbage District No. 1 Fund had a shortfall of more than $1.1 million.
The Sanitation department is also in the red. But according to Gonzales, the deficit in Sanitation will be made up by increased sales tax revenue and additional transfers of sales tax revenue to the Sanitation budget.
He also stated that all departments are working to ether to resolve these issues as quickly as possible.
The Parish’s Response
“In regard to the auditor’s findings, SBPG is working diligently towards implementing corrective action in order to resolve these issues,” said Parish President Dave Peralta. “Most of these issues relate to under staffing due to budget constraints as well as continued personnel turnover experienced over the years since Hurricane Katrina. We have hired a CPA to head up our Finance Department and replaced two of the departed accountants.”
Gonzales explained that the deficits found by the auditors were partly caused by a timing dilemma.
“As to the funds with deficit balances totaling $30 million, approximately $26 million, due to the date received, was recorded as deferred revenue and recognized in 2013 rather than 2012 therefore creating timing differences and the ensuing deficit balances,” said Gonzales. “These Funds are from FEMA and CDBG funding sources. These deficit Fund Balances were substantially replenished in 2013 upon receipt and recognition of such revenues from FEMA and CDBG.”
The audit report can be viewed by visiting www.sbpg.net and clicking on the Public Information Portal, then Finance.