Feb 21, 2013 21:43 Jefferson Parish withholds funding from performing arts group pending final audit Jefferson Parish withholds funding from performing arts group pending final audit Audit questions theater society’s money handling by Allen Powell II| New Orleans bureau Feb. 21, 2013 Comments Metairie — An audit of the Jefferson Parish Performing Arts Society has found several troubling practices within the organization, and Parish President John Young has agreed to withhold public funding for the group until those issues are addressed. A preliminary draft of an audit being conducted by Jefferson Parish Internal Auditor William “Tommy” Fikes found that the performing arts society lacked many of the standard internal controls needed to prevent waste, fraud and abuse. In particular, the audit found that the group allowed rampant use of credit cards by employees, constant access to blank checks and allowed employees to work as full-time employees and independent contractors for the same agency. Council Chairman Chris Roberts raised some of his concerns about the initial findings in the audit to Young in an email and said he didn’t view it is as “prudent” for public money to continue to flow to the group. The performing arts society was approved for a $325,000 “emergency payment” from the parish this summer after it stopped receiving a similar amount from a state auto tax. It also receives about $100,000 from the parish under a cooperative endeavor agreement and hundreds of thousands of dollars more in separate state grants. “I believe it would be prudent on the parish’s part to withhold any additional public funds from the organization until these matters are resolved,” Roberts wrote in a Feb. 5 email. He also questioned the $165,000 salary paid to the group’s executive director and Young’s attempts to secure funding for the group through West Jefferson Medical Center. Young responded that he would direct Chief Administrative Office Christopher Cox to begin withholding payments until the completion of the final audit. On Tuesday, Young said that he wouldn’t be able to discuss the audit because it’s still a “draft” copy, and the JPAS hadn’t had a chance to respond. However, he said that once the audit is finalized, he would have a comment. However, Performing Arts Society Executive Director Dennis Assaf said what the audit found was “sloppy” bookkeeping, not fraud or abuse. Assaf, who was livid that the audit had been leaked to some media outlets before he saw it, said because of the workload of his staff at times they have not followed proper procedures for credit card receipts and other issues. However, he stressed that it was never anyone’s intention to do anything illegal. “We’re not guilty of anything illegal; we’re guilty of sloppiness,” Assaf said. “I can tell you without a doubt there’s not one shred of fraud, theft.” Assaf said he’s already taking steps to create new procedures for the nonprofit and is considering hiring an internal “watchdog” who would produce monthly or quarterly reports on the group’s progress. He said that within the next few weeks his group will post the audit on its website complete with rebuttals for all of the findings by Fikes. “We have absolutely nothing to hide,” Assaf stressed. “We look forward to this coming out.” The Jefferson Performing Arts Society is one of several local groups that receive parish funding but are not directly controlled by the parish. In 2011 the Parish Council ordered audits of all of those groups to determine how the parish’s money was being spent. Audits of the Jefferson Economic Development Commission and the Jefferson Convention and Visitor’s Bureau already have been completed, and several others are pending. The audit found that the performing arts group lacks safeguards to prevent waste and fraud, particularly a mechanism where separate individuals review and approve payments. Assaf has the ability to authorize and then disburse funds without anyone else signing off, according to the audit. It also found that the group uses pre-signed checks and photocopied contracts that multiple individuals can access. Another issue was that the group allows widespread use of credit cards by employees and doesn’t require detailed receipts for expenditures. One example cited was more than $1,000 spent during one trip to Mississippi on hotel rooms and food with no explanation of the purpose of the trip. Fikes suggested that the group develop a clear credit card policy and limit who has access to credit cards, according to the audit. He also suggested that the group clean up its policy on reimbursements. Fikes found thousands of dollars in checks written to “cash,” and also found $15,000 in personal reimbursements to Assaf. All reimbursements should be vetted to be certain they are related to agency business, and personal expenses should be exempt, the audit report said. The audit also noted some irregularities in how the performing arts society classifies and pays employees. It found that some individuals were listed as both employees and independent contractors. Fikes also found that the group lacked contracts for some contractors and hired some of Assaf’s family members to be paid performers. In a surprising finding, Fikes found that the group hadn’t tracked personal or vacation days since Hurricane Katrina and had no idea how many were taken annually by employees. It was not immediately clear when the final version of the audit would be released. The Jefferson Performing Arts Society is the largest nonprofit theater production company in the state. Assaf said the group put on 18 productions during its last season with shows in five parishes and two states.