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|Audit says money missing in Ferriday|
Cash received from Ferriday utility customers is missing, a check substitution scheme has been used and a host of other accounting problems were cited Monday in an audit released by the Louisiana Legislative Auditor.
Auditors examined town utility records over a period of nine days selected at random in 2007 and learned, said the report, that cash collected from customers totaling $3,568 is missing and that payments received on those days were more than the amounts deposited in the town's bank accounts.
Records were audited in 2007 on two days in February, three days in April, two days in June, one day in October and one day in November.
To cover missing cash, auditors said a check substitution scheme -- which may have begun in October 2004 -- was implemented in which funds deposited were less than payments received, and that certain checks "were received and deposited in the town's bank accounts but were not recorded in the utility system. These checks were substituted for the missing cash."
In some cases, customer billing records were either deleted "or payment posted as a credit at a later date to conceal the missing cash."
Customer billing stubs accompanying "these payments made by check were missing but the checks received were deposited."
Net losses in the town's utility fund for water and sewerage totaled $277,099 in 2005 and $463,118 in 2006. This forced the town to transfer $280,633 from the general fund to the utility fund in 2005 and $482,306 was transferred in 2006.
In 2005, 95 percent of the town's customers who were audited were charged the minimum fee, and 89 percent audited for 2006 were charged the minimum fee -- $32.80 for residential and $85.40 for commercial, resulting in significant revenue losses.
Water meters are broken and other meters were read incorrectly. Often the last digit of the customer meter readings are not entered in the billing system, said auditors. This omission "reduces the number of gallons of water billed to customers."
The town's water cut-off policy is also not being followed and a master meter is not being used to "analyze water consumed and billed to customers."
Auditors also found that:
Current financial statements are not always provided to the mayor and aldermen. One review indicated that a statement was provided six months after the month for which the figures were compiled.
Written policies and procedures are not complete.
An organizational chart showing lines of authority and responsibility for all employees does not exist.
Checks received by mail are not listed "on a daily receipts log and restrictively endorsed before they are given to the town clerk or other appropriate employee for processing."
The balance for accounts receivable in the general ledger "is not reconciled with the accounts receivable balance in the detailed utility customer listing each month.
The town is not seeking quotes for some purchases. Auditors found that the town paid $124,000 for chemicals in 2007 without obtaining competitive bids as required by law. Individual purchases did not exceed the $20,000 bid limit, but auditors said the Louisiana Attorney General has opined that "recurring purchases that exceed the bid limit must be advertised and let by public bid."
Deficiencies were found in time card and time sheets for the employee payroll.
Improved controls are needed over gasoline and diesel purchases.
The police department is not "accounting for the numerical sequence of traffic/misdemeanor tickets."
Police personnel who collect fines are not bonded but should be, said auditors.
Although the town's minutes reflected approval of a contract for legal counsel, town officials could not provide auditors "with that contract."
Scores of recommendations to remedy the problems cited were provided by the LegislativeAuditor.
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