(The Center Square) — The Reddell-Vidrine Water District in Evangeline Parish had an instance of an employee committing fraud and a misappropriation of funds.
This is according to an audit performed by the accounting firm John S. Dowling and Company on behalf of the Louisiana Legislative Auditor’s office. The audit reviewed financial statements of the waterworks district for 2022 and 2023.
What they found were three examples of internal control and compliance errors.
In Feb. 2024, the district’s management discovered an employee had fraudulently written herself unapproved payroll checks for time not earned, unapproved checks for personal items, and unapproved reimbursements, all pulled from the utility fund.
Although they immediately reported it to the auditor’s office, auditors later determined the misappropriation of funds started back in March 2023.
The investigation is ongoing, but it has been reported to law enforcement and the employee, who was a secretary/clerk, has been relieved of their duties.
The fraud is believed to have totaled $31,133.80 in value. Restitution and insurance claims have not been made.
The solution offered by the auditors to ensure it doesn’t happen again is similar to that of another internal control error in the report.
Auditors found the district had inadequate segregations of accounting functions. Due to the small number of employees, the district cannot divvy responsibilities properly.
In the case of the fraud, the secretary/clerk was not turning over monthly work to the CPA firm for processing, reconciling, and preparing of W2s but told the board that the CPA firm had the information.
A system of internal control procedures should be established to mitigate this lack of employees and ensure that no one individual handles a transaction from its inception to its completion.
Despite this recommendation from the auditors, management responded by saying they determined it is not cost effective to achieve complete segregation of duties within the accounting department. No cash is collected by the district, and a bookkeeping firm performs all bookkeeping functions.
The last error reported was that the statement review was not completed and submitted to the auditor’s office within six months of the close of the fiscal year, as required by state law.
Auditors say the completion of the review report was delayed due to the district’s inability to obtain all of their records timely.
