Audit finds fault with St. Mary agencies

Findings in an audit of reporting entities to the St. Mary Parish Council included failure to publish availability of a proposed budget and hearing, proposed adjustments to financial statements and lack of accounting expertise among staff.
Pitts & Matte CPA firm performed the audit on the St. Mary Parish Council’s reporting entity financial statements for the year ended Dec. 31, 2014. The Louisiana legislative auditor released the audit report Monday on its website.
The report found that Consolidated Gravity Drainage District No. 1 in Franklin 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 as required by state statute.
Parish officials said the district will comply with state statutory requirements and publish the required notifications.
Also, auditors said proposed audit adjustments for the fiscal year ended Sept. 30, 2014, for Hospital Service District No. 1 in Franklin and Consolidated Gravity Drainage District No. 2 in Morgan City had material effects on their financial statements.
Parish management said the hospital’s chief financial officer will perform a comprehensive review of the financial statements, estimates and journal entries before closing the fiscal year.
Drainage district management said it will implement policies and procedures to ensure that misstatements in the financial statements can be detected by the district’s internal control in order to prevent material proposed audit adjustments.
In the report, auditors found that management and staff of various parish entities lacked the training and expertise in the selection and application of generally accepted accounting principles in the financial statement preparation process.
The finding is considered a significant deficiency for St. Mary Parish Water & Sewer Commission No. 1 in Amelia, the report stated. The finding is considered be a material weakness for the Parish Water & Sewer Commission No. 1, Water & Sewer Commission No. 4, Water & Sewer Commission No. 5, Sewerage District No. 5, Sewerage District No. 8, Wards 5 & 8 Joint Sewer Commission, Consolidated Gravity Drainage District No. 6, Fire Protection District No. 3, Fire Protection District No. 11, Recreation District No. 1, Recreation District No. 3, Recreation District No. 5 and the St. Mary Parish Tourist Commission.
Parish management determined that the cost of employing in-house personnel with this expertise exceeds the benefit, they said in the report.
Also in the audit, auditors discovered there is “very little segregation of duties” within 24 of the parish’s component units due to limited personnel.
Auditors considered the finding to be a material weakness for St. Mary Parish Water & Sewer Commission No. 1, Water & Sewer Commission No. 2, Water & Sewer Commission No. 4, Water & Sewer Commission No. 5, Sewerage District No. 5, Sewerage District No. 8, Wards 5 & 8 Joint Sewerage Commission, Consolidated Gravity Drainage District No. 1, Consolidated Gravity Drainage District No. 2, Consolidated Gravity Drainage District No. 6, Wax Lake East Drainage District, Sub-Gravity Drainage District No. 1 of Gravity Drainage District No. 2, Fire Protection District No. 3, Fire Protection District No. 11, Recreation District No. 1, Recreation District No. 3, Recreation District No; 4, Atchafalaya Golf Course Commission, Hospital Service District No. 1, Hospital Service District No. 3, St. Mary Parish Library, St. Mary Parish Tourist Commission and St. Mary Parish Communication District.
Parish management stated, after review, they decided that additional controls derived by employing an additional person for bookkeeping is outweighed by the additional personnel costs.