(The Center Square) – Inadequate controls and ineffective internal functions highlight findings in an audit of the Louisiana Department of Environmental Quality.
The audit was performed by the Louisiana Legislative Auditor’s Office to assess the financial reporting for the department for the period of July 1st, 2022 until June 30, 2024.
For the third consecutive engagement, auditors found the department did not have an effective internal audit function and did not fully adhere to the Institute of Internal Auditors’ international standards.
This is because the department does not have a quality assurance and improvement program and has not completed an annual internal assessment.
Both are required by the institute’s standards, which according to state law applies to any agency with an appropriation level of $30 million. The department was appropriated $146 million for fiscal year 2023 and $154 million for fiscal year 2024.
The department also did not have adequate controls to monitor the collection of penalties and settlements for the Hazardous Waste Site Cleanup Fund, which may result in uncollected or untimely collection of revenues.
In a review of 25 penalty and settlement agreement collections, auditors found three with deficiencies.
For one penalty, the department did not provide evidence that it followed-up with the respondent until one year after the initial correspondence.
The respondent received the expedited penalty agreement on February 14, 2022, however DEQ’s consequence letter was dated February 28, 2023, which was received by the respondent on March 6, 2023.
For the other two, the department did not collect all scheduled penalty payments by the due date established in the executed expedited penalty agreement.
Louisiana law requires respondents to pay the assessed penalty amount within 30 days of receipt of the expedited penalty agreement or the expedited penalty agreement may be withdrawn.
The remaining balance due for one penalty totaled $705 and was scheduled to be paid by April 1, 2024. However, the remaining penalty was not collected as of June 30, 2024, and no evidence was provided to show collection efforts were made between these dates.
After auditors brought this to management’s attention, management said the payment has since been made.
For the other penalty, the remaining balance due totaled $6,500 and was required to be paid by September 2022. This was also not collected as of June 30, 2024, and once again no evidence was provided to show collection efforts were made.