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Story Archives: DA reviewing Ferriday check scheme, former clerk; former mayor responds


DA reviewing Ferriday check scheme, former clerk; former mayor responds
posted Thursday, February 26th, 2009 @ 9:40 amE-mail Story E-mail Story | Print Story Print Story 
Dist. Atty. Brad Burget said Wednesday he has been asked by the Louisiana Legislative Audit Advisory Council to review an alleged check substitution scheme involving a former clerk who worked during the administration of former Ferriday Mayor Gene Allen.

Burget said he received a letter from the audit advisory council today, postmarked February 23, asking for a response in 30 days.

"I've been asked to report any action that this office might propose after the review and to notify the council in 30 days," said Burget. "I shall do exactly what they've asked. Once we get the audit report we'll conduct the review and make a decision."

A financial report issued by Natchez CPA Silas Simmons on February 18 criticized Allen for taking $2,917 in vacation pay on his last day in office, and criticized Allen and the town council for the payment of almost $20,000 to the Harvest Baptist Church for damages in which the town had no liability, and for spending more than $800 to send Allen to a beauty pageant.

Auditors ask the town to seek restitution from Allen for the vacation pay and for the Vegas trip.

Allen said today he will discuss the matter with his attorney and "let him look at it. If he says I have to reimburse the town for travel and vacation I will pay it back. First they have to send me a letter of request."

But the matter the DA has been specifically asked to review involves the town's employment of a clerk who legislative auditors said last spring was "concealing" cash. The audit also criticized Allen for making "no changes to stop the theft" of that clerk.

"We had four different people handling the money up front and a computer with a glitch in it," Allen said. He said when the auditors visited "they had to bring their own. There is no way I could track that money to anybody."

That Legislative Audit released last year said cash received from Ferriday utility customers was missing, and for the first time cited a check substitution scheme and a host of other accounting problems.

Auditors examined town utility records over a period of nine days selected at random in 2007 and learned, said the Legislative Auditor, that cash collected from customers totaling $3,568 was 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 the 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."

Yet, in the 2008 financial report issued last week, Silas Simmons reported: "Subsequent to March 19, 2008, Mayor Allen continued to employ the employee who was concealing the cash and made no changes to stop the theft."

Concerning personal expenditures, Silas Simmons said the town should seek reimbursement of $822.16 from the former mayor for a trip Allen made to Las Vegas in June 2008 to watch a beauty pageant which included a contestant from Ferriday, the daughter of Alderman Gloria Lloyd.

Silas Simmons said the town should pay no travel expenses "that are not for official business."

The council voted 2-1 to finance the trip with aldermen Gloria Lloyd and Johnnie Brown in support and Jerome Harris voting no. Aldermen Robin Chapentier and Glenn Henderson were absent.

In addition, Silas Simmons said the town should seek restitution from the Harvest Baptist Church or an insurance company for the $19,528 the town shelled out in "expenses for damages to a local church purportedly related to a back up in the town's sewer lines." The report said the town's insurer "later determined that the town had no liability for the incident and refused to cover the town's loss."

Silas Simmons' report also noted that the town's net assets increased from $6,536,329 in 2007 to $6,788,824 in 2008.

Revenue from governmental activities, which includes sales, property, occupational license and franchise taxes, and fines, dropped from $2,862,247 in 2007 to $2,773,506 in 2008. Governmental expenses increased slightly, from $2,102,200 in 2007 to $2,125,811 in 2008.

Other highlights of the Silas Simmons report show that Ferriday's population as of July 1, 2005, according to Louisiana Tech University, was 3,698, that the town had 44 employees as of June 30, 2008, and a total of 1,410 residential utility customers and 230 commercial customers.
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