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Auditor flags repeated internal-control, capital-asset and procurement problems in Bogalusa report
Summary
An independent audit presented to the Bogalusa City Council lists a material weakness in internal control, repeat capital-asset deficiencies, noncompliance with bond covenants and procurement lapses on ARPA funds; council members pressed for clarifications on payables and how pension liabilities affect governmentwide results.
Miss Hammond, the independent auditor presenting the city's agreed-upon procedures, told the council the audit identified nine discrete findings and repeated issues stretching back more than a decade.
The auditor said the city has a material weakness over internal control related to insufficient segregation of duties that left review processes insufficiently documented, describing invoices "that didn't have any sign offs on them" and noting an "informal process" with two people signing checks but little written evidence. "This is something very easy to remedy," she said, offering to work with council and management on written signoffs and controls.
The report also flagged a significant deficiency in the capital-asset records, a repeat finding from prior audit years that the city lacks consistent tagging and serial-number tracking. A separate finding noted that the water system had not been properly separated into its own fund as required by bond covenants; the auditor said that separation is difficult but required and that the deficiency was a repeat of items dating to 2010 and 2012.
On federal funds oversight, the audit's single-audit finding covered ARPA expenditures and procurement, saying several contracts exceeded state bid thresholds and did not follow competitive procurement rules. "There were several items that exceeded those thresholds and should have been procured with a competitive bid but were not," the auditor told the council.
The auditor reviewed governmentwide and fund-level results: a governmentwide deficit of about $16.7 million in 2022 that includes roughly $21 million in net pension liability and additional OPEB liabilities. She emphasized that pension liabilities reported for plans outside city's control skew the governmentwide position: about $11 million of the pension liability is in plans over which the city has no investment control.
Council members pressed the auditor on specific counts in accounts payable and whether prior-year bills had been omitted from the 2022 draft; the auditor said the draft required verification and she would confirm the RMI-related and other payables before final filing with the legislative auditor. She said the completed audit would be filed with the legislative auditor once management responses were received and revisions made.
The presentation also noted a potential public-bid issue involving ditching work around the city that, when aggregated, may have exceeded bid thresholds (the auditor reported roughly $1,030,360 in total ditching expenditures in 2022) and therefore could implicate state public-bid law; the auditor said her office is not an enforcement agency but is required to report the condition to the council.
The auditor concluded by noting that some items (an unsecured bank deposit tied to meter proceeds) appear to have been resolved with the bank and that many control fixes recommended are straightforward documentation and sign-off practices.
The council will receive a final audit packet when the auditor completes verification and transmits the report to the legislative auditor.
