By Victor Skinner | The Center Square contributor
A recent audit for the city of Shreveport uncovered numerous issues, from delayed bank reconciliations to incorrect employee information to late financial filings with the state.
An independent audit for Shreveport published by the Louisiana Legislative Auditor last week highlighted a total of seven findings for 2021.
Auditors identified a material weakness with cash reconciliations that were not conducted for operating, payroll and water and sewer accounts, something that’s supposed to occur on a monthly basis.
A second material weakness was identified for a lack of adequate procedures to support and track receivable amounts for various property standards categories.
“The city has historically had many issues related to these accounts. In 2019, the city converted systems to MGO (My Government Online), and have not been able to adequately obtain accurate reports to support the balances that have continued to be carried in the financial records,” auditors wrote. “The city has never properly addressed this issue or devoted necessary resources to address this issue.
“The city also does not have adequate procedures to accrue for amounts to be collected,” according to the report.
Because the city is not pursuing collections of the balances, the amount to be collected has grown to $5.5 million through December 31, 2021, auditors wrote.
A significant deficiency identified in the report centered on three personnel files with incorrect employment dates, a problem that can cause issues when calculating years of service and retirement eligibility.
Another significant deficiency involved six employees whose retirement system contributions were miscalculated at a lower rate. The employees were “hard coded” into the system with a 28% city contribution, but were not adjusted to 30% when the city amended the ordinance and changed the default contribution percent.
Auditors also found the city was not in compliance with Louisiana law that requires the city to prepare and submit annual audited financial statements to the Louisiana Legislative Auditor within six months of the end of the city’s fiscal year.
“There were various factors that contributed to the late filing, including personnel changes, and delays in obtaining final adjusted balances for the audit,” according to the report.
The independent audit also noted that the LLA is conducting an investigation into Shreveport finances after “certain allegations were communicated to the Louisiana Legislative Auditor for investigation.”
The only other finding from the independent audit noted a material weakness with numerous funds and accounts that needed corrections.
“In the course of our audit procedures, we proposed various material adjusting journal entries for various funds and accounts, including revenue, receivables, deferred revenue, transfers, expenses and capital assets,” auditors wrote.
City officials worked with the auditor to develop a corrective action plan. Officials blamed some of the issues on personnel changes, lack of training, COVID and “unforeseen circumstances,” and described how they plan to rectify the problems.
Some of the corrective actions involve training, adding a new procedure, or hiring a new employee, while others issues were remedied with a new general fund accountant and fiscal agent.
The full audit, recommendations and management’s response are available on the LLA website.
