[StBernard] St. Bernard Parish budget practices get lowest ranking from Louisiana legislative auditor

[Westley Annis]

St. Bernard Parish budget practices get lowest ranking from Louisiana
legislative auditor

Published: Friday, July 27, 2012, 10:30 PM

 By Benjamin Alexander-Bloch, The Times-Picayune 

The Louisiana Legislative Auditor's Office has given St. Bernard Parish the
lowest grade ranking -- a D -- on its audit of parish government budget
practices in 2011. The audit notes government credit card transactions
previously highlighted by The Times-Picayune "that appeared to be of a
personal nature that were not timely reimbursed by the Parish President,"
along with several other issues including poor parish oversight of federal
disaster recovery projects, sloppily recorded parish assets and an
aggressive spending of cash accounts.

The St. Bernard Parish government would not comment on the 117-page audit
until it is officially released by the Legislative Auditor on Monday. The
Times-Picayune received a draft copy.

The audit was supervised by Jeremy Thibodeaux, an accountant with Ericksen,
Krentel & LaPorte of New Orleans.

Overall, the audit states it "identified certain deficiencies in internal
control over financial reporting that we consider to be material weakness
and other deficiencies that we consider to be significant deficiencies."

In terms of the credit card transactions, the audit notes that "state
revised statutes prohibit public funds to be used for non-public purposes."

A Times-Picayune review of parish credit card records earlier this year
showed that taxpayer money was spent on bicycle supplies, marathons and
numerous meals and travel under former Parish President Craig Taffaro. The
day after the newspaper story on the credit card abuses appeared, the state
attorney general's office picked up copies of all Taffaro administration
credit card records.

Taffaro has responded that while in public office his role "and that of the
team members of my administration was to respond to and rebuild a devastated
community" after Hurricane Katrina and "we overcame enormous obstacles,
established productive partnerships with local, state, and federal agencies
and set St. Bernard Parish on a course toward a successful recovery."

The Times-Picayune found that Taffaro's administration charged about
$180,000 to credit cards from 2008 to 2012 and that credit card expenses on
a few of the meals included alcohol -- a violation of state law -- and
despite a stringent parish policy, hardly any documentation was kept for
many purchases and meals.

The audit notes "several transactions that appeared to be of a personal
nature" but does not go into specifics.

In August 2011, Beverly Gariepy took over the parish finance department and
developed a new form that requires card users to explain the "Public Purpose
of Expense." At that point, use of the parish credit dropped dramatically.

In additional to the credit card expenses, the recent audit notes that CDM
Smith, whom the Taffaro administration contracted to manage recovery
projects, spent much more on federal disaster recovery projects than
budgeted and yet the parish never amended its budget to reflect the added
expenditures.

The audit states that numerous recovery projects were not closed out because
of lingering questions surrounding the eligibility of expenses submitted for
reimbursement. Many recovery projects had significant cost overruns.

The parish is required by state law to amend its adopted budget when
expenditures exceed budgeted projections by 5 percent or more, but the audit
notes that the parish did not do so for the recovery department expenses.

Due to such overspending, the audit states that "the parish may face a
shortfall of funding and potential liability as it closes out the recovery
process."

CDM Smith's apparent lack of oversight also was noted.

"St. Bernard Parish personnel were not empowered to provide oversight or
maintain accountability over the recovery effort," the audit states.

Additionally, the audit discusses inadequate accounting of the parish's
general fixed assets, mainly property and equipment.

"Significant 2011 asset additions were not accurately identified, quantified
and added to the fixed asset system until June 2012," the audit states.

The electronic data files that existed detailing parish assets were
corrupted, and during the transition from Taffaro's administration to that
of David Peralta, who took office in January, the new IT department did not
know where the backup files were and thus could not retrieve and restore
such files, the audit states.

Also during 2011, the parish administration reduced most of its cash
accounts to below zero, according to the audit. Essentially, the
administration borrowed cash from other funds that had positive balances to
compensate for draining the general fund, the consolidated fire protection
districts fund and the human resources fund to negative balances.

And the audit states that the parish lacked receipts for some of its cash
purchases.

The St. Bernard Parish Housing Authority also is highlighted. The audit
states that the parish underreported the parish housing authority's assets
by about $1.2 million and that its total cash and investments were
insufficient to support such assets.

In other words, the housing authority improperly tracked and used its U.S.
Housing and Urban Development funds. Also, the audit states that neither the
housing authority nor the parish could account for the spending of about
$1.7 million.

Benjamin Alexander-Bloch can be reached at bbloch at timespicayune.com or
504.826.3321.



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