(The Center Square) — The city of Shreveport had nine material weaknesses and deficiencies in their financial statements for 2023.
Accounting firm Carr, Riggs & Ingram, LLC conducted an independent audit of Shreveport for the Louisiana Legislative Auditor’s Office. The audit covered financial statements for the year ended Dec. 31, 2023.
The first note was improper budget transfers in the city’s journal entries. City officials marked transfers that were entered into the general ledger solely based on budget ordinances rather than actual cash transfers.
These entries should not have been made until there was a valid movement of cash between funds, and the result was transfer accounts to be materially misstated.
The second note said the city does not have adequate procedures to track and collect the amounts receivable. Shreveport is not pursuing collections of balances which have grown to $8 million as of December 31, 2023.
The third note is similar to the first two and it says controls and procedures are not in place to ensure all significant account balances are properly analyzed and accurately reported.
The fourth note said compensated absences, prepared by the city’s information technology department and fire and police personnel, contained material errors and did not properly roll forward from the prior year. This means the liability could be overstated due to employees with balances exceeding the maximum carryover allowed at year’s end.
The fifth note said the city’s fire and community development departments did not provide timely or accurate documentation to ensure the expenditure report was prepared properly. A schedule of expenditures of federal awards is a report that lists all federal funds spent during a fiscal year.
The sixth note also had to do with timing. It said Shreveport was not able to submit its audited financial statements to the Louisiana Legislative Auditor by the required deadline.
The seventh note was a deficiency in payroll. Auditors found that an employee with the police department continued to be paid full salary and remained on active status after going on disability in the middle of 2023. Communication by the police department to city payroll did not occur until nine months after the employee went on disability.
A misappropriation of assets was the result of the eighth note. Between January 2020 and January 2021, two police officers were involved in a scheme to defraud the city out of funds by claiming overtime hours that were not earned.
Subsequent to year’s end, one of the former officers pled guilty to wire fraud for submitting false overtime and activity reports related to a special crime-reduction program. Restitution for $13,000 was set with three years probation. The other former officer was fined $2,500, ordered to pay restitution in the amount of $1,681, and was sentenced to one year of supervised probation.
The ninth and final note once again had to do with timely reporting. Shreveport’s Fire Department did not properly submit quarterly and semi-annual reports in accordance with the grant agreement or failed to respond to inquiries from the grantor agency for processing.
In a management response, city officials said they agreed with the exceptions noted in the report and would work with the appropriate departments to address the deficiencies.
