(The Center Square) — Misused funds and reporting failures highlighted the audit of the financial statements for the town of Abita Springs.
An audit from Griffin & Furman, LLC, a public accounting firm, took a look at the revenue and expense statements for the year ending Dec. 31, 2023 in Abita Springs. They found several accountability issues.
It was determined that the public works supervisor and finance clerk used town credit cards to make unauthorized purchases that were personal in nature. The clerk also misappropriated funds through the town’s Venmo account.
The amount of funds involved are estimated to be $245,000, but the investigation is ongoing and has been turned over to federal law enforcement. It’s believed that this misuse took place from 2021 to 2023. Neither of those employees are still currently working with the town, but formal charges haven’t been brought yet.
The town did however file civil lawsuits and insurance reimbursed $150,000 of that money to Abita Springs.
The auditors recommended the town implement strict controls involving credit card use and that all disbursements require segregation of duties such that more than one person is involved in the check process.
Management also made a lot of unintentional mistakes. The customer deposit liability and net position were misstated. Multiple other accounts were inputted incorrectly and required adjustment.
Overall, approximately 20 adjusting entries were proposed and recorded in the financial statements. These adjustments resulted in an overall increase to net position of approximately $300,000.
Additionally, it is possible that other utility activities could have been misstated during previous periods since it was also determined that prior year audit entries had not been recorded.
The financial statements have to comply with the Local Government Budget Act. The town failed to amend the budget of the shared sales tax special revenue fund when revenues fell short of budgeted revenues by more than 5%, therefor falling short of the requirements in the Act.
Abita Springs also did not submit their financial report within the six-month deadline, which is another obligation by law.
A lot of these unintended mishaps could be solved by tackling another issue the audit found.
The town currently uses the Quickbooks accounting software to maintain its books. The audit says because Quickbooks is not designed for the application of fund accounting, the town is unable to produce fund financial statements throughout the year or at year’s end.
As a result, significant effort is required to convert the existing books and records to full fund accounting.
Several times throughout the report, auditors recommended fixing this issue to simplify the process and make it easier to find problems in accounting the moment they happen, rather in year-ending audits.
