(The Center Square) — The town of Oberlin’s finances are a mess, illustrated by two dozen findings in an audit for 2022 that ranged from late payments for payroll taxes, pension obligations and invoices, to problems with how the town manages public utilities.
The Louisiana Legislative Auditor released an independent auditor’s report for the fiscal year that ended June 30, 2022 that includes 24 findings, 18 of which were repeated from prior years.
Auditors pointed to inadequate segregation of functions within the Oberlin’s accounting system due to a small staff, one of several issues involving internal controls. Others included a failure to reconcile accounts receivable, customer meter deposits, delinquent or late payment of sales tax collections, and delinquent tax and license returns and payments.
“The cause of the condition is the failure to design or implement policies and procedures to achieve adequate internal control,” auditors wrote.
Other policies and procedures were simply ignored.
In a test of utility accounts, auditors found some were not being paid in full or timely, “and the customers, including employees and town officials, continue to receive utility service in violation” of the town’s ordinance. Payment plans and extensions granted by the mayor were not in accordance with the ordinance, either, auditors wrote.
Late invoice payments and delinquent filing of sales tax collections also cost taxpayers penalties and interest, while the town did not assess penalties for those who paid their ad valorem taxes and occupational licensing fees late.
The town was cited for failure to maintain accurate payroll records, specifically authorizations for pay raises. Oberlin was also cited for noncompliance with the state’s Budget Act for exceeding budgeted expenses by $187,429, failure to include a budget message, failure to put the budget in the correct format, failure to notify the public, and other violations, auditors wrote.
Still other findings centered on a failure to remit court fees and required forms, a town employee who used a town-owned backhoe at his home, co-mingled tax dedications, and mismanagement of COVID relief funds.
The COVID funding involved $35,000 for a community center, $1,600 for a sign, $141,960 spent on past due utility invoices, $28,650 spent on audit fees, $10,000 for a town attorney, $83,712 in premium pay and other spending “without consideration of mitigation of COVID related costs” as required by federal rules.
Many of the violations listed the cause as “administrative oversight” and management’s correction action plan for most state the “town will implement policies and procedures” to fix the issues. Officials also vowed to adhere to existing ordinances, and to take measures to come into compliance with the Budget Act.
In a Jan. 6 Facebook post, Oberlin Mayor Larry Alexander noted a rate study conducted by the Louisiana Rural Water Association found the town’s water and wastewater system is losing over $150,000 a year, though he did not mention issues with reconciling customer meter deposits or the failure to enforce the town’s utility cut-off policy.
Alexander wrote the town receives roughly $24,000 a year in tax revenue that’s used to repair water and sewer issues, and defended a utility rate increase.
“Almost every small town and water system has had to raise rates. The Town of Oberlin has not had a rate change since 2017,” Alexander wrote. “Materials and supplies are more expensive than in the past.”
