St. Martinville Audit Finds Continuing Problems, Legal Issues
The city of St. Martinville's auditors are sounding the alarm about multiple accounting issues within city government, some of which are violations of state law.
Those findings should be no surprise to outgoing mayor Melinda Mitchell or members of the city council. The 14 findings listed in this year's audit report are the same 14 problems auditors noted last year.
Utility Fund Facing Major Problems
On of the biggest problems surrounds the city's utilities, specifically the waste water department.
That audit, conducted by Kolder, Slaven, & Company, LLC, found that the city government had inadequate controls over utility fee collections and utility deposits.
"The City does not have procedures in place to ensure that penalties and late fees are added to customer accounts when the account become delinquent," the audit reads. "Additionally, management is not consistently following the City's policy relative to the date accounts should be disconnected.
"The City's utility billing software is not setup to automatically add the designated penalties and late fees in accordance with the City's policies. There are no procedures to verify customer accounts are being disconnected on the proper cutoff date."
That, according to auditors, has led to inconsistent billing.
"There are delinquent accounts including employees and related parties that are not consistently being charged the appropriate fees in accordance with the City's policy," the audit says. "The inconsistency of this policy could be considered a violation of Article VII section 14 of the
Auditors also found that the city has no controls over the collection of utility deposits, and, as a result, the city has incomplete records pertaining to those deposits.
Those issues could be the cause of money issues within the city's utility fund. According to the audit:
The City of St. Martinville's Utility Fund experienced an operating loss in their Water and Wastewater Department in the amount of $98,886 and $372,678, respectively, for the fiscal year ended June 30,2021. The City of St. Martinville should consider increasing water and wastewater rates and/or decreasing expenses within these departments to operate on a profitable basis.
City Hall Lacks Accounting Controls
The audit also found other accounting problems within city hall.
The auditors noted that the city lacked controls over some of the city's basic financial functions. For starters, city officials have failed to reconcile their ledgers on a monthly basis. According to auditors, that's because "(t)he City does not have adequate procedures in place to reconcile general ledger accounts to appropriate supporting documentation." The audit also notes that the city does not have proper procedures in place for reconciling municipal bank accounts. This, the audit says, has led to city leaders missing deadlines to complete bank reconciliations.
"The City's bank reconciliations were completed in excess of 60 days of the related statement closing date," the audit says. "The City's bank reconciliations included duplicate checks and deposits as outstanding items."
Auditors also noted that the city has not been keeping track of municipal employees' hours because the city policy does not require those employees to sign time sheets.
"The City did not have a control policy to ensure adequate documentation is being maintained to substantiate the hours worked by each employee or verifying timesheets are signed by the appropriate personnel," the audit states. "The City does not have the employee's certification for the hours being paid. In accordance with AG Opinions 15-186,99-397, and 94.284, the City does not have the required documentation to substantiate the accrual of leave."
According to the audit, the city improperly mixed restricted bond issue money with the general fund. Auditors discovered the city leaders used money from a dedicated bond fund to pay for general operating expenses.
"The City did not comply with the intended purpose of the recreation bond issue by transferring $250,000 to the General Fund for general operating expenditures," the audit states. "The restricted funds were replenished by June 30,2021."
The audit also says the city does not have proper policies and procedures to inventory and identify city government property and capital assets.
Ticket Procedures May Violate State Law
Auditors also found that city leaders may be violating state law by not properly handling its ticket books and ticket fees.
"Controls over traffic tickets were not adequate," the audit states. "The traffic ticket log was not properly maintained: (1) there was no accounting for the numerical sequence of tickets issued and (2) ticket books were issued to police officers before the previously issued book is accounted for and before all issued citations are received fi-om the police officer. No quarterly audit by traffic citations is being performed by the Municipal Clerk."
Furthermore, auditors found the city "did not have procedures in place to properly account for the collection of ticket fines."
The audit continues by saying the lack of controls over the city's ticket books may have cost the city revenue. It also says the fees from the revenue that has been collected were not remitted to the agencies to which they were supposed to go.
"State statues require various fees to be collected in fine revenues, then subsequently remitted to the appropriate organization," the audit states. "The organization and related revised statues are as follows: Acadiana Criminalistics Laboratory (R.S. 40:2266.1), Louisiana Commission on Law Enforcement (R.S. 46:1816 (E)(1)), Indigent Defender Board (R.S. 15:168), St. Martin Crime Stoppers, Inc. (La. Code of Criminal Procedure Article 895.4), LA Association of Chiefs of Police, and Louisiana Supreme Court.
"The City failed to remit funds timely to the appropriate organizations. The City is in violation of the various state statutes, identified above, which require the collection of and remittance of fine fees to appropriate organizations."
In their response to the audit, city leaders said they would begin making the appropriate changes to their policies to avoid another repeat of these problems. However, the response did not say when the city would begin making those changes.
The full audit is available below.