(The Center Square) — The regional transit authority in Louisiana was found to have spent money they should not have on terminated employees.
An audit of the authority’s financial statements performed by Carr Riggs & Ingram, LLC found the error in their reporting. The audit was for the period of Jan. 1, 2023, until Dec. 31, 2023.
Auditors obtained a listing of employees or officials that received termination payments. They then randomly selected two employees or officials and obtained related documentation of the hours and pay rates used in management’s termination payment calculations.It was found that both selected terminated employees were paid severance pay upon termination totaling $84,628.This could be in violation of Article 7, Section 14 of the Louisiana Constitution which states that public funds have to be used for public purposes and cannot be donated or loaned. The employees are paid with a public fund. Additionally, 50 random transaction were selected out of the monthly statements to see if supporting documentation was properly noted for the transactions.For each transaction, the authority should have there things: An original itemized receipt that identifies precisely what was purchased, documentation of the business/public purpose of the transaction, and in the case of meal charges, papers noting the individuals participating in the meals.For six of the 50 transactions, a receipt of purchase was missing. For 40 of 50 transactions, written documentation of a business/public purpose was not found.Lastly, there was a significant deficiency found in the internal control over accrual process for accounts payable.In 2023, the authority converted its financial system from JD Edwards, a 30-year system, to Oracle Cloud Enterprise Resource Planning.Because the accounting team navigated between two systems during the fiscal year, they had to obtain financial information and reports and reconcile balances between the two systems.As a result of this massive undertaking with numerous transactions, the timeliness of the normal monthly and year-end accrual procedures was affected and led to needed adjustments at year end.Auditors said now that the authority has since resumed normal closing processes, they fully expect that this issue will be resolved going forward.
