Audits rip district’s finances

Advocate staff photo by ADAM LAUChairman Jessie Thomas, right, asks questions during Waterworks District No. 2's public meeting at St. Gabriel City Hall on Wednesday

ST. GABRIEL — Iberville Parish Water District No. 2 board members indicated Wednesday night they would try to regroup after getting hit by a pair of independent audits blasting the body’s fiscal affairs, accounting and money handling.

As a result of the audit findings, the district is no longer eligible for state or federal funding due to unacceptable financial practices of its employees, according to the reports.

“I’m very, very shocked, and disappointed,” water board Chairman Jessie Thomas said in an interview. “All along we thought we were in tip-top shape. Our members are going to have to get together and have a meeting to see where we stand.”

Parish Council President Matt Jewell told the board members during their public meeting in St. Gabriel City Hall the council plans to hold a special meeting to determine the parish’s next course of action.

During Tuesday night’s Parish Council meeting, where the contents of the audits were made public, Ourso recommended the council “abolish” the water district and assume complete control.

“I can’t tell you what’s going to happen in terms of a possible criminal investigation,” Ourso said Wednesday. “The attorney general and local District Attorney’s Office will have to figure that out.”

Officials with the two accounting firms that conducted audits on the water district’s financial records for the 2010 fiscal year briefed the council on their findings.

According to a July 13 letter from the Louisiana legislative auditor, Waterworks District No. 2 was placed on the department’s noncompliance list because of a disclaimer opinion included in the parishwide audit report conducted by Baxley & Associates.

Staff accountant Margaret Pritchard told the council that Baxley issued the disclaimer because the water district’s financial records lacked documentation supporting the values assigned to financial statements, cash accounts and meter deposits.

“This puts a black eye on the parish as a whole,” Ourso replied. “The most serious matter is the accountability. This is an embarrassment to the parish.”

Officials said the parish stepped in to manage Waterworks District No. 2 back in March at the request of the council.

The parish then hired the Postlethwaite & Netterville accounting firm to conduct a separate in-house, independent audit of the district.

Fred Smith, of Postlethwaite & Netterville, reported back to the council that the water district’s financial discrepancies ranged from missing bank deposits and weaknesses in internal control to questionable employee practices and undocumented payroll expenditures.

“When we got over there, there was only one employee remaining at the district who had only been full time for several months,” Smith told the council. “That was the only person there that we could converse with about the condition of the records. Her knowledge was limited, therefore we could only go on what she was telling us.”

The parish president explained that since the parish takeover of the district in March, three of the four district employees resigned. The fourth was transferred to the parish Utilities Department.

Further, the waterworks district failed to maintain adequate employee attendance and timesheet records, Smith said.

“We interviewed the lone employee still working at the district and that person indicated she had never signed a timesheet or never kept any attendance records at the district,” he said.

In another instance of improper fiscal management cited, a district employee who retired at the end of the 2011 fiscal year was paid $5,300 for accrued leave.

But Smith said the district lacks a policy on accrued time and how it is calculated for payout after an employee leaves.

“The bottom line is, that person was just paid according to what the district thought was its policy without having any true records of what that person’s accrued leave was,” Smith said.

Baton Rouge Water Co. supplies Waterworks District No. 2 with drinking water, which is then distributed by the district to customers in the St. Gabriel area of Iberville Parish.

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