Simmesport Mayor Draper says fiscal ‘cesspool’ is clearing up

Simmesport’s financial mess is well on its way to being resolved, Mayor Leslie Draper III said following the release of a highly critical audit for the 2016-17 budget year.

The audit was presented and adopted by the Town Council at a special meeting on April 11 and was published by the Legislative Auditor on April 29.

The audit -- prepared by Marksville accounting firm Kolder, Slaven & Company -- found several failings, including some violations of state law. The report also included recommendations to improve the municipality’s budgeting and operating practices.

The audit is over two years late -- which was one of the faults cited in the audit report.

The town’s budget year begins on July 1 and ends June 30 of the next calendar year. A fiscal year audit is supposed to be filed with the Legislative Auditor’s Office by December of the the next budget year,

“Simmesport has been about 2 1/2 years behind in its audits for a number of years,” Draper said. He said the audit for 2017-18 is “ready to be presented” and the 2018-19 audit will be finished and filed with the Legislative Auditor by the December deadline.

‘INHERITED CESSPOOL'

Draper said his administration “inherited a cesspool of ill practices and a long list of missing items.”

Waiting for the 2016-17 audit report was a “cloud over this administration,” he added.

Draper said almost every contract and agreement had to be renegotiated -- including unpaid bills, taxes, bonds dating back to 2015.

“This has put an enormous unnecessary burden on this administration,” he continued, “but we have satisfied the ills with good practices by putting appropriate corrective actions in place” to satisfy the audit requirements.

The mayor said town officials have spent the past two years “correcting past problems and maintaining the day-to-day operations. We’ve done more with less. We’re moving forward in the right direction. Thank God!”

MAJOR FAULTS

One major finding was that the town had failed to make debt service payments to its Sewer Revenue Bonds and its Depreciation & Contingency, Sinking and Reserve Funds.

In response, the town noted it is aware of the requirements and “anticipates compliance aspects of the sewer revenue bonds to be met” by this current budget year.

Another major finding was failing to remit state sales tax collections to the state by the required date.

In its response, the town noted it is current with remitting sales tax collection and “considers this matter resolved.”

Simmesport also failed to file and remit federal and state payroll withholdings to appropriate agencies in a timely manner.

The audit said federal liabilities for periods ending Dec. 31, 2016, March 31, 2017, and June 30, 2017 were filed on Feb. 13, 2018. State withholding and unemployment insurance for the period ending June 30, 2017 was also filed on Feb. 13, 2018.

This failure is a violation of state and federal law and could result in penalties and interest charges on the unremitted amounts, the audit noted.

The town replied that it “is currently timely with all payroll filings as of the date of the independent auditor’s report, although the town is in the process of remitting all tax payments to the proper agencies.”

In response to a finding that there was inadequate internal controls for recording financial transactions, town officials noted the Town Council contracted with an accounting firm in September 2018 to assist with monthly financial reporting.

The accountant will also close annual financial records to ensure transactions are properly recorded.

The town was also criticized for not having documented policies and procedures in place to govern daily operations, which can prevent continuity of operations and increase the risk of errors and irregularities -- including fraud.

In response to the finding, the town is working with the contracted accounting firm to establish comprehensive written policies and procedures for daily operations. That manual should be completed and adopted by June 30.

The auditor found the town had not been reconciling its accounts in a timely manner.

In response, the Town Council will work with its contracted accountant to reconcile significant account balances on a monthly basis. This will include all bank accounts, utility accounts receivables and utility customer deposits.

LATE AUDIT

The audit found the town was in violation of state law by not filing its audit reports within six months of the end of the previous fiscal year.

The auditor noted the town “failed to maintain good records and had difficulty in producing all records requested during performance o their annual audit,” which is a violation of state law.

Town officials acknowledged the infraction and said Simmesport will comply in the future and will submit its 2018-19 audit to the Legislative Auditor by the December 2019 deadline.

The audit found that tickets and citations were not fully accounted for in 2016-17.

In response, Simmesport P.D. has implemented policies and procedures to ensure all tickets and citations issued are accounted for.

The audit found the town had not advertised to sell properties with delinquent property taxes, which is intended to ensure the town receives all property taxes owed to pay for services to the town’s citizens.

The town’s response was that it will consult with its attorney to ensure collection of delinquent taxes.

The auditor found an instance of an “inappropriate use of the town’s federal tax ID number.”

The Athletic Youth Association was using the town’s tax ID number to operate a bank account and conduct its business, even though the town had no access or control over the organization’s account. The auditor said the use of the town’s federal tax ID number “could result in a violation state law with the entity benefiting from the town’s tax-exempt status.

In addition, the town could be liable for any theft or misappropriation of funds that could occur in the account.

In response, the town noted the use of the tax ID number to open accounts was done “without the consent of the current administration.” The response said the town has obtained custody of all accounts opened by any private organization using the town’s tax ID number and “the town considers this matter resolved.”

The Athletic Youth Association is no longer in operation.