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Shreveport Faces Financial Audit Challenges

City officials discussing financial audit findings in Shreveport

News Summary

Shreveport is grappling with serious financial audit challenges, uncovering nine material weaknesses in its financial management. Issues include improper budget transfers, over $8 million in uncollected receivables, and payroll irregularities that raise concerns for stakeholders. City officials promise to improve accountability and reporting, emphasizing the need for timely rectifications to safeguard public funds.

Shreveport Faces Financial Audit Challenges, Highlights Need for Improved Accountability and Reporting

Shreveport is currently facing significant financial audit challenges that have raised some eyebrows among its residents and city officials alike. The audit, conducted by Carr, Riggs & Ingram, LLC for the Louisiana Legislative Auditor’s Office, examined the city’s financial statements for the year ending December 31, 2023.

The findings were far from reassuring, with the auditors uncovering a total of nine material weaknesses and deficiencies. This clearly indicates that there are serious gaps in the city’s financial management that must be addressed to uphold accountability and transparency in public funds.

Improper Budget Transfers

One of the major highlights of the audit was the issue of improper budget transfers. City officials were noted to be inaccurately marking these transfers based solely on budget ordinances instead of actual cash movements. This has led to discrepancies in financial reporting, with transfer accounts in the city’s general ledger being materially misstated due to improper entries.

Collection Woes

In another troubling revelation, the city’s procedures for tracking and collecting receivables were found to be inadequate. As of December 31, 2023, this resulted in a whopping $8 million balance that the city has yet to collect. Lack of efficient tracking could lead to financial strain on the locality if not rectified promptly.

Errors and Deficiencies in Reporting

Furthermore, there are significant deficiencies in controls and procedures to ensure that essential account balances are reported accurately. Errors linked to compensated absences were documented, which could mean the city is overstating its liabilities due to employees carrying excessive leave balances. This only adds to the urgency for better oversight.

Delayed Documentation Issues

The audit also pointed to insufficient documentation from the fire and community development departments, which impacted expenditure reports. This lack of timeliness and accuracy in documentation is a key area that requires immediate attention from city officials.

Payroll Irregularities

The findings didn’t stop there. A payroll deficiency was identified when a police department employee continued to receive their full salary after going on disability for nine months, with no proper communication made to the city payroll department. This kind of oversight is alarming and raises questions about internal controls.

Cases of Misappropriation

In yet another concerning finding, a misappropriation of assets has been identified involving two police officers who submitted false overtime claims between January 2020 and January 2021. One officer has pled guilty to wire fraud, agreeing to pay $13,000 in restitution along with three years of probation. The other officer faced a fine of $2,500 and was ordered to pay $1,681 in restitution, with one year of supervised probation.

Lack of Reporting From Fire Department

The city’s Fire Department also came under scrutiny for failing to submit required quarterly and semi-annual reports and not responding to inquiries from grantor agencies. These lapses not only hinder accountability but also put funding at risk.

City Officials Vow to Improve

In light of the audit’s findings, city officials have expressed their commitment to addressing and correcting these serious deficiencies across various departments. It’s essential that Shreveport takes immediate action to improve its financial practices to avoid potential repercussions in the future.

The challenges unveiled in this audit point towards a necessary focus on improved accountability and reporting to ensure that public funds are managed effectively and responsibly. As Shreveport moves forward, residents and officials alike will be closely watching to see how these issues are rectified.