(The Center Square) — The motor fuels underground storage tank trust fund in Louisiana had one issue with accounting on its financial statements.
The mistake was reported in an audit of the fund, which is handled by the Department of Environmental Quality. The audit was performed by the Louisiana Legislative Auditor’s Office for the period of July 1, 2023, until June 30, 2024.
A March 2024 actuarial report estimated the liability of the current sites participating in the fund totaled more than $173.2 million as of June 30, 2023. However, this liability is not reflected in the account’s financial statement because it is prepared on the cash basis of accounting.
This fund was established decades ago in response to the 1984 Subtitle I amendments to the Resource Conservation and Recovery Act that provided for the development and implementation of a comprehensive regulatory program for underground storage tanks containing motor fuels.
The account is funded through multiple types of fees of those who own these tanks.
The funding is used to reimburse all necessary and appropriate expenditures for investigation, assessment, and remediation of sites contaminated by a motor fuels release from an underground storage tank.
Remediation consists of cleanup of soil, groundwater, and inland surface waters, using cost effective methods that are technologically feasible and reliable, while insuring adequate protection of the public health, safety, and welfare and minimizing environmental damage.
According to the report, as of June 30, 2024, there were 9,525 tanks registered by the Underground Storage Tank Division. Between fiscal years 2020 and 2024, remediation work was finished on 179 sites, for an average of 36 sites per year.
A cash basis of accounting has collections recognized and received and disbursements reflected when paid. As such, the accompanying financial statement does not reflect the receivables and related payables associated with the activities of the fund.
Because of this, the financial statement does not present fairly the financial position of the department and the changes in its financial position for the year in accordance with accounting principles generally accepted in the United States of America.
Despite the off base accounting practices, the auditor’s opinion wasn’t modified — the financial statement of the fund is presented fairly, in all material respects, by the cash basis financial position.
