Friday, May 17, 2024

Audit shows Shreveport mayor redirected city business to personal friend

by BIZ Magazine

By Victor Skinner | The Center Square contributor

A recent state audit shows Shreveport Mayor Adrian Perkins spent more than $35,000 on travel between 2019 and 2021 without proper documentation and redirected the city’s insurance policies to send business to a longtime friend.

Louisiana Legislative Auditor Mike Waguespack conducted an investigative audit for Shreveport “to determine the validity of complaints we received,” and issued a series of findings and recommendations last week.

The report centers on two main issues: Perkins’ requests to change the agent of record for the city’s workers’ compensation insurance and property insurance and travel expenses related to 23 trips totaling $35,845 between January 1, 2019 and December 31, 2021.

A staff member for then incoming Mayor Perkins directed city officials to change the AOR for excess workers’ compensation over $750,000 from Risk Services Louisiana, Inc. to 3rd Millennium Insurance and Financial Services, Inc. in late December 2018 and assign Roddrelle Sykes as the AOR. AORs aren’t the actual insurance provider, but instead broker the coverage.

“Mayor Perkins told us that the City used the same insurance agents for a long time, and he wanted to make a change to help the City,” the report read. “He said he wanted to hire local agents and have a competitive process, which he expressed to his team, but he was not involved in the selection. The Mayor also told us he had known Mr. Sykes personally for a long time.”

It was a similar process to change the AOR for the city’s property insurance, which involves several layers of insurance. In March and April 2019, the city switched its AOR from Arthur J. Gallagher Management Services, Inc. to Frost Insurance, which employed Roddrelle Sykes.

Sherrika Jones, then chief accounting officer, told auditors Perkins provided Sykes’ name and directed that he be selected as the AOR for the city’s property insurance.

“Mayor Perkins told us that he directed staff to use someone local, that the selection should be competitive, and that he was not involved in the selection,” the report read.

The premium for the excess workers’ compensation was $542,082, while the city paid Frost Insurance $914,465 for property insurance policies, plus a $250,000 service fee, in 2019.

The change in AOR for workers’ compensation was not advertised through a request for proposal for policies exceeding $10,000, as required by the city’s purchasing policy, and was not approved by the city council, as required by the city charter, according to the report.

The change in AOR for property insurance policies was approved by the council after the fact, a potential violation of the city charter, and the $250,000 service fee was paid without council approval.

Auditors also questioned the mayor’s travel expenses during 23 trips between 2019 and 2021.

“Sixteen of the trips included expenses, totaling $3,210, that may have violated City of Shreveport travel and procurement and travel card policies and procedures,” the report read. “In addition, 16 of the Mayor’s 23 travel expense statements (69.7%) were completed between 31 and 101 days after the event.”

Issues included 10 missing receipts totaling $1,196, $608 for six business meals without documented attendance or purpose, seven lodging charges where total cost exceeded the per diem rate by $592, and two reimbursements totaling $133 that were prohibited by city policy.

Auditors recommended Perkins comply with the city charter and purchasing policies, better monitor and document travel expenses, obtain and maintain documentation on business travel, and ensure only business related expenses are charged to the city.

Perkins responded to the report in a letter to Waguespack on Oct. 5 that provides the reasoning for insurance changes and “acknowledged the error.” Requests for proposals have been issued every year since, he wrote.

“Moving forward, this Administration will continue to comply with the City Charter and City purchasing policies for all purchases including insurance,” he wrote.

Perkins also wrote the city hired lobbyists to cut down on his travel, and outlined other “steps to better improve the implementation of purchasing policies” that include training sessions, and contracting with the Government Finance Officers Association to “make sure all city departments are compliant.”

“It was never the Mayor’s intention to not follow any policies that are in effect,” he wrote. “The Mayor will reimburse the City for all expenses that the audit shows may have violated City of Shreveport travel and procurement policies and procedures.”

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