Financial errors revealed in Livingston audit report
LIVINGSTON — Livingston Parish government’s 2011 audit cites 38 negative findings for last year, plus several findings auditors said were not corrected from the 2010 audit.
The latest audit cites widespread problems, including lack of internal controls to “deter losses from employee dishonesty or error,” though no cases of theft were reported.
The auditors found inventories showing that the number of some “items increased while the Parish Council indicated that no purchases were made of the items during the year.”
That appears to be one of the many bookkeeping errors in which the audit found money or equipment value were listed in the wrong places.
Lingering problems from the 2010 audit include administration of state and federal grants, collections for utility services and failure to comply with state law on amending budgets.
Parish President Layton Ricks said his administration has begun trying to resolve all those issues.
The 2010 audit said the parish lacked “a comprehensive grant administration policy.” The previous administration promised to develop one, but the 2011 audit says the parish apparently did not implement such a plan.
The latest audit cites numerous grant transactions that were “inconsistently recorded” and says parish officials lacked sufficient knowledge of the requirements of a number of grants.
Ricks said he is particularly concerned about the grant issues because the parish depends heavily on state and federal money and cannot afford to lose it.
He said he is looking at additional training for key personnel and possibly adding someone with an accounting background to help work with grants.
Ricks said he has also begun to look at the utility collections problems cited in the 2010 and 2011 audits.
Last year, the parish’s general fund had to contribute $600,000 to the utility fund, said Jennifer Meyers, who became director of finance last month.
Marshall Harris, director of the Parish Council’s Finance Committee, said he wants to see the parish’s utilities, which include sewer and water systems, pay for themselves.
That’s going to mean a change in rate structure and requiring people to pay their utility bills, he said
The latest audit shows that the utility fund had $164,000 in bad debts at the end of 2011.
Both the 2010 and 2011 audits recommended the parish collect overdue utility bills and penalties or get legal advice on its options for collection.
The Parish Council cannot terminate certain utility services, the parish said in its response to the 2010 audit.
The problem is with several parish sewer systems where customers receive water from private companies. In areas where the parish provides both water and sewer, the parish can cut off water to people who do not pay their bills, Ricks said.
It’s physically more difficult and expensive for the parish to cut off sewer service, Ricks said, adding that many customers who don’t pay their bills wouldn’t care if their sewer service were cut off, even though it might result in discharges that could cause environmental and health problems.
Ricks said he is looking at the possibility of agreements with the water companies that would result in water being cut off if sewer bills aren’t paid.
In the future, sewer service won’t be installed by the parish in areas where the parish doesn’t control the water, he said.
In its answer to an audit citation in 2010 on failure to amend some budgets that had more than a 5 percent or greater change, the parish said it was monitoring its operating budget more closely in 2011.
However, the 2011 audit found “the council did not amend the final budgets to comply with state law and continues to report fund balance deficits.”
Ricks, who took office at the beginning of this year, said his administration will take action to see that doesn’t happen in 2012.
The audit cited a number of situations in which payments or receipts were not recorded in the general ledger, including a $94,512 wire transfer.
A $981,069 sales tax payment “was recorded in the general ledger, but not properly reflected on the bank reconciliation,” the audit states.
“We noted several clerical errors in the road fund inventory spreadsheet due to formulas not being used or inaccurate calculations,” the auditors reported.
The Parish Council’s approval process for cash disbursements does not contain sufficient “evidence of a review of invoices prior to payment,” according to the audit.
Auditors also found two payments without sufficient supporting documentation or an explanation of the nature of the expense.
Auditors also said they found a “lack of preparation of timely reconciliations of the various accounts” when they began their work.
In its response to that and numerous other findings concerning record keeping, the parish said that it began revising current accounting procedures with “the addition of an experienced finance director in June.”