[StBernard] St. Bernard has questions about audit that cleared SDT

[Westley Annis]

St. Bernard has questions about audit that cleared SDT

10:14 PM CST on Thursday, January 29, 2009

Lee Zurik and Dominic Massa / Eyewitness News 

St. Bernard Parish President Craig Taffaro has new questions about an audit
done last month, which cleared SDT Waste and Debris Services. 


As Eyewitness News reported, Taffaro had said SDT owed the parish as much as
$3 million, for billing St. Bernard for trash for which SDT, or even Orleans
Parish, should have paid. 


An accountant picked by the parish, and paid by SDT and St. Bernard, said
SDT did nothing wrong. 


Eyewitness News had four different forensic accountants review the SDT
report and all came to similar conclusions. 


"Obviously there is not enough information to come up with a conclusion,"
said Lee Yao, a Loyola University accounting professor and certified
forensic accountant. 


"I am not saying there is something wrong, just that there is not enough
information," Yao said. 


He adds that the audit done by accountant Harold Asher did not review enough
information, did not verify the information given and therefore, in his
mind, it is difficult to come to the conclusion Asher did: that SDT did not
overbill St. Bernard parish for garbage. 


"I cannot come to the same conclusion with the information given.  It's
almost impossible," Yao said. 


Another forensic accountant, who asked WWL not to use his name, went a step
further, saying "This was not a forensic report, but a report based on
undocumented conclusion."  This is a statement both SDT, and the auditor
hired by the parish, dispute. 


"If what you are looking for is a conclusion based on absolute certainty, I
would say that's correct," Harold Asher said.  "But the standard that is
generally used is reasonable certainty.  I would say with a high degree of
reasonable certainty that my conclusions are correct." 


St. Bernard Parish President Craig Taffaro says the most noticeable
potential flaw with the audit involves the number of households where SDT
claimed to have picked up garbage.  When Eyewitness News reviewed the cart
list, or list of homes with garbage containers, supplied by SDT, it showed
that more than 2,600 duplicate and triplicate listings.  One home was even
listed six times. 


"Let's say there are 2,600 duplications.  If you substitute it into the
calculations that the Asher report identified," Taffaro said, "it can have a
significant impact on the numbers that would certainly effect the resolution
agreement." 


Taffaro says the Asher audit is based on assumptions that he says are hard
to prove. 


"One of the things I've continued to ask is that when we look at this
information, does it pass the reasonable person's test?" Taffaro asks. 


"There are still questions, when I show this to a reasonable person, that
they still have." 



>From the monthly increase of the carts in the parish, the audit assumes that

6,700 homes were renovated in St. Bernard during the time in question, when
a transfer station in St. Bernard was open.  The audit also assumes each one
of those homeowners or contractors hauled six tons, or 12,000 pounds, of
debris to SDT's transfer station.  In other words the audit assumes not one
home under renovation had a dumpster in which to place debris. 


"That wasn't something I thought was realistic," Taffaro said. 


WWL talked to the owners of four different dumpster companies and also two
contractors, and all said they had plenty of work in St. Bernard parish at
the time SDT's transfer station was open. 


Unlike the Asher audit's assumption, all of those companies and contractors
say dozens of dumpsters were taken directly to the landfill and not to the
transfer station during that time. 


When asked whether it was realistic to believe every home under renovation
brought debris to the transfer station, Asher replied, "It's reasonable to
conclude given its location and proximity and its cost, zero, that yes, the
people hauling away the debris would have all gone to the transfer station."



The Asher audit also fails to take into consideration people who dropped off
trash and debris at the transfer station and were charged.  Remember, the
transfer station was free for St. Bernard residents.  But WWL received about
a dozen calls from St. Bernard residents who said they were charged.  One
even provided a receipt to prove it.  


The Asher audit also assumes commercial contractors dropped off debris at
the transfer station, but doesn't take into consideration that SDT may have
charged those contractors.  Eyewitness News found three who were; one who
supplied WWL with a stack of receipts. 


"It wasn't represented by the parties that it was an issue and it was known
by all parties," Asher said. 


The Asher audit also doesn't figure in $5 million of 30-yard containers that
SDT's own records estimate held 32,000 tons of debris.  Those containers,
available for St. Bernard residents to drop off trash, were placed at two
spots in the parish.  But they were never figured into the report. 


The Asher audit never reviewed SDT commercial numbers and garbage charged to
Orleans Parish.  Other forensic auditors raise questions because St. Bernard
Parish said SDT charged it for some SDT commercial garbage and possibly some
Orleans parish garbage.  Those auditors ask how it is possible to come to a
conclusion without reviewing those numbers.  There is also a question about
SDT's GPS records. 


"We started looking at that," Asher said.  "Although SDT made absolute
access available to us, the information was not in a readily-identifiable
format." 


This week, St. Bernard Parish President Craig Taffaro sent a letter to SDT,
saying these new findings put the audit in question. 


"We may never get to a firm factual resolution," Taffaro said. 


But the forensic accountant hired by the parish and SDT says, even with
these questions, SDT in his mind did nothing wrong. 


"To find that now, because of relatively minor assumptions taken out of
context improperly, that my findings are invalid, is totally improper.  My
findings are reliable.  I still stand by them," Harold Asher said. 


SDT owner Sidney Torres IV refused WWL's request for an on-camera interview,
but sent a statement through his public relations representative.  It
appears below in full. 


"I am disappointed WWL-TV continues to pursue this story even though this
matter has been resolved.  The St. Bernard transfer station at issue had no
scales and had no one monitoring who was allowed to place trash and
construction debris at the site for SDT to collect and remove.  In most
civil disputes, both sides customarily hire experts and argue over
assumptions.  Here, SDT cooperated fully with Mr. Asher who was selected,
not by SDT, but by St. Bernard Parish.  He is a well-respected forensic
accountant.  If WWL-TV wishes to continue casting aspersions on SDT, it can
pick and choose aspects of any expert report and criticize it.  Mr. Asher's
recommendation satisfied both St. Bernard Parish and SDT," the statement
reads. 


"SDT has supplied the parish with a complete cart registration list.
Additionally, SDT, at its own expense, has hired a well known firm, GCR, to
assist both parties in attempting to achieve an accurate service location
list, given the rapid growth of St. Bernard in recent months. Parish
officials are aware that some addresses have multiple cans and some are on
locations where FEMA trailers once stood," Torres writes. 


"As for claims SDT improperly collected fees at the transfer station, a sign
was clearly posted that outlined processing fees charged to private
individuals for dumping at the site.  Those dumping in containers were not
charged.   The amount collected was minimal. At all times, St. Bernard
Parish was fully aware of this," Torres said in the statement.