Berwick audit finds procedural problems

Findings in the Town of Berwick’s audit report indicate repeated problems with misstatements in the financial statements.
Joy Irwin, director of Local Government Services for the Louisiana Legislative Auditor, said the finding indicates the independent auditor had to adjust the financial statements he received to get an accurate picture.
She likened it to balancing a checkbook with multiple entries by different people. When the final picture is drawn, the financial outlook is different than originally thought.
The same finding was reported for both fiscal years ended Sept. 30, 2012, and Sept. 30, 2013.
“It was reported last year and repeated this year. When we see that, it’s a little concerning,” Irwin said.
Berwick Mayor Louis Ratcliff said the discrepancy stemmed from the way a grant was recorded. The $18,000 Port Security Grant the town received from the Morgan City Harbor and Terminal District was used for a software purchase for the police department.
Instead of recording the full grant amount and the expenditure as two separate line items, the town recorded the net difference, Ratcliff said.
“We’ve made procedure changes now, and any time we receive a grant, it will be recorded properly,” he said.
The town did receive a clean or unmodified opinion on its major funds.
However, it received an adverse opinion because auditing standards require that it be noted when a government’s component unit, in this case the Berwick Development District, is not included in the audit.
Basically, Irwin explained, “if someone wants to find out the entire financial picture of the Town of Berwick they would not be able to do that because that one component unit is reported separately.”
She said component units are not required to be reported, but it must be noted when they exist and are not included in an audit.
The Berwick Development District, whose fiscal year ends Dec. 31, was not required to be audited because it received no revenues in 2012 and held only $90,000 in assets. The district is scheduled for an audit for 2013, Irwin said.
Ratcliff said the district’s financials have “never been included in our annual report since the BDD was started. It’s an audit requirement to make a note of it.”