Thursday, May 30, 2024

Audit reveals issues with town of Roseland’s finances

by BIZ Magazine

(The Center Square) — The Town of Roseland struggled with financial duties, utility billing, bond requirements and traffic citations during the pandemic, an audit of the town’s 2020 finances shows.

An independent audit of Roseland’s financial statements and activities recently released by the Louisiana Legislative Auditor uncovered many issues for the year ending December 31, 2020, with several tied to the pandemic’s impact on the town’s small staff.

Auditors found Roseland did not properly segregate financial duties for individuals responsible for authorizing transactions, recording transactions and maintaining custody of related assets.

“Due to the size and nature of the Town, there are few administrative employees and as such, some incompatible duties are not adequately segregated,” the report read. “The Town does have dual signature checks with the Mayor and the Clerk since 2016.”

Roseland also “lacks complete standardized procedures for effective operation of a utility billing system and proper working internal controls over some transactions related to the system.”

The report notes that Roseland did not maintain strict adherence to its cutoff policy for delinquent accounts and did not have a sufficient system in place for collecting on past due accounts.

“Included at December 31, 2020, within the receivables balance were closed accounts of $42,388 and inactive accounts of $14,029 totaling $56,416 ($50,099 was delinquent by over 120 days). Additionally, at December 31, 2020, within the receivables balance were active accounts of $39,122 of which, $14,401 was delinquent,” according to the report.

“Customers with promissory note agreements to pay delinquent accounts were not disconnected from service in a timely manner when the terms of the agreement were not honored,” auditors wrote. “Additionally, the customers were reconnected upon a partial payment when the terms of the agreement stipulate that full payment would be required.”

Auditors tested delinquent accounts totaling $13,100 for collectability at the end of 2021 and found $4,309 were paid by February 2022, while $8,791 remained uncollected.

“The town was unable to provide documentation of referral of closed or inactive accounts or of delinquent active accounts to legal counsel for collection procedures,” the report read.

The issues with the cutoff policy also played into the town’s noncompliance with requirements of bonds financed by the U.S. Department of Agriculture, Rural Development, used as loan assistance.

“Revenue bond agreements require the Town to establish rates sufficient to pay bond installments and fund required reserves and to disconnect delinquent accounts over 90 days past due,” auditors wrote.

Other issues involved noncompliance with state laws on processing and tracking traffic citations. The audit showed ticket books were not properly maintained, docket sheets were not completed, two tickets were missing important information and gaps in ticket numbers on the docket without explanation.

The problems with delinquent utility accounts and lackadaisical ticket tracking also contributed to a possible violation of the Louisiana Constitution, which prohibits public funds, credit, property, or things of value from being loaned, pledged, or donated to any person or business.

Other issues included noncompliance with the Local Budget Act due to a Fire Fund that collected more than 5% less revenues than budgeted and late submittal of its annual audit report, which was submitted in November 2022.

All of the findings in the 2020 audit, with the exception of the late audit report, were repeated from the prior year.

Auditors made a series of recommendations that essentially called on town officials to follow state and federal laws. Town managers blamed some of the issues on complications from COVID-19 and staff shortages and promised to “consider implementing all of the Auditor’s recommendations immediately.”

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