Report: Recreation district didn't publish budget

St. Mary Parish Recreation District 1 in Amelia didn’t publish notice of availability and of a public hearing for the district’s 2014-15 proposed budget, according to an audit released Monday on the state legislative auditor’s website.
Kolder, Champagne, Slaven & Company performed the audit for the year ended Sept. 30, 2014.
During the audit, auditors discovered the district did not publish the availability of the proposed budget for the year ended Sept. 30, 2014 and did not publish a notice of the time and date of the public hearing to be held on the proposed budget.
When proposed expenditures of a political subdivision are expected to exceed $500,000 from the general fund and any special revenue fund, state law requires public participation, the report stated.
As part of the public participation process, the law requires that “upon completion of the proposed budget and, if applicable, its submission to the governing authority, the political subdivision shall cause to be published a notice stating that the proposed budget is available for public inspection.”
The notice is also required to state that a public hearing on the proposed budget shall be held with the date, time, and place of the hearing specified in the notice. The notice is supposed to be published at least 10 days prior to the date of the first public hearing, the report stated.
The district may not be in compliance with a certain provision of the Local Government Budget Act, the audit report stated.
The auditor recommended the district comply with the provision of the Local Government Budget Act by publishing a notice of availability of the proposed budget and publishing a notice containing the time and date of the public hearing of the budget being considered.
Failure to publish the notice of availability of the proposed budget and a notice of the time and date of the public hearing was an oversight, district management stated.
The district was not aware of the public participation requirement once expenditures exceeded $500,000, management said. The district was made aware of the requirement during the previous audit, but the proposed budget for the fiscal year ended Sept. 30, 2014, had already been adopted, management said in the report. The district has complied with these requirements for the fiscal year ending Sept. 30, 2015, management stated.
Also in the audit report, unmodified opinions were issued on the district’s financial statements for governmental activities and for each major fund. A management letter was not issued.
The district had one finding regarding internal controls for inadequate segregation of duties.
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.
Due to the size of the operation and the cost-benefit of additional personnel, the auditor said it may not be feasible to achieve complete segregation of duties. No management response was considered necessary.
In regard to financial reporting, the auditor found that management and staff lack the expertise and/or experience in the selection and application of generally accepted accounting principles, as applicable to governmental entities, in the financial statement preparation process.
The condition resulted from relying on the external auditor as part of the internal control process, the report stated. As a result, financial statements and related notes may reflect a material departure from generally accepted accounting principles, the report said.
The auditor stated that additional costs required to achieve the desired benefit may not be economically feasible.
District management stated the financial reporting process will continue to be outsourced to the district’s external auditors due to the increased costs necessary to correct the condition.