GRAND COTEAU, La. (KLFY) — The Town of Grand Coteau has several issues with how it handles its finances, some of them ongoing from previous years, according to the Louisiana Legislative Auditor.
An audit report for the year ending June 30, 2022 released Monday had 11 adverse findings, nine of which were repeated from the previous year.
The independent auditor, the accounting firm of Kolder, Slaven and Co. in Lafayette, found found that the town failed to pay several invoices on time and incurred late fees.
“Failure to pay vendors timely could lead to late fees being assessed and increases the risk that vendors will cease doing business with the Town,” the audit reported.
Additionally, the auditor noted that the town’s gas, water, and sewer funds had operating losses during the year.
“Failure to make a profit on utility sales could result in the Town not having resources to pay current expenses,” the audit read. “The Town should consider increasing utility rates and/or decreasing expenses in order for the utility system to operate on a profitable basis.”
The audit found the town has not properly followed its own policies and procedures regarding past due accounts and proper cut-off procedures to disconnect services relating to nonpayment by customers. This was also noted in the town’s 2021 audit.
“Management should consistently comply with its written policies and procedures in the future and cut-off utility services of customers, including employees and Town officials, who do not pay within the time limited stated in the policy,” the audit said.
The audit found the town lacked adequate segregation of duties for its financial and accounting functions, failed to maintain personnel files, failed to maintain employee leave records and did not reconcile its bank accounts in a timely manner every month. In addition, the utility accounts receivable was not reconciled monthly, the town did not have complete records for its customer meter deposits or reconcile the meter deposit bank account monthly.
“Failure to adequately segregate accounting and financial functions increases the risk that errors and/or irregularities including fraud and/or defalcations may occur and not be prevented and/or detected,” the audit said.
The auditor recommended adding employees to ensure that a single employee does not have
control of all accounting responsibilities, but said that the town has determined that it is not cost effective to achieve complete segregation of duties within the accounting department.
The town failed to publish minutes of all of its meetings within the required time frame, failed to maintain minutes for all of its meetings and failed to document approval of pay raises for the Board of Aldermen or fix the compensation of the mayor, the board, the police chief, the clerk and other municipal officers by ordinance as required by law.
“Failure to fix the compensation of the mayor, board of aldermen, clerk, chief of police, and other municipal officers increases the risk that the Town will be in violation of state law.” the audit read.
The full audit report from the Louisiana Legislative Auditor can be found here.