Audit: Laf. overcharged FEMA

Lafourche Parish Government overcharged FEMA for reimbursable work related to emergencies in 2011 and 2012, the firm that conducted the parish’s annual audit discovered.

Parish President Charlotte Randolph said the federal agency’s reconciliation process likely would have caught the mistakes and stressed that they were made amid emergencies.

“This is not an intentional effort to fool FEMA,” Randolph said.

The Federal Emergency Management Agency refunds local governments a portion of labor and equipment costs incurred during an emergency. Local governments invoice the agency based on set rates tailored to the types of cost.

During Tropical Storm Lee, in one instance, the parish logged work for half-ton pickup trucks as one-ton trucks, which carries a higher reimbursement rate. The auditing firm Stagni and Company sampled 29 items, and 16 pieces of equipment had incorrect rates or hours logged, according to the report.

“We’re pulling relatively small samples of a lot of transactions,” David Stagni told the parish council last week.

The report says “it does not appear anyone in the Parish accounting department is verifying the hours, rates and fringe benefits charged to be correct and eligible costs,” which puts the burden on personnel to properly file the paperwork during an emergency without oversight.

Worksheets were not corrected before being filed with FEMA, the audit states. Randolph, however, said the errors may have been rectified in the time since, though “I can’t say definitively that it has been corrected with FEMA,” she said.

“Certainly, the auditor is not involved in our meetings with FEMA,” Randolph continued. “This may have been corrected in January, but the initial paperwork would be still on file with our office.”

During Lee, Hurricane Isaac and the Mississippi River flood threat from 2011, the parish used three different methods to calculate the amount of benefits owed by FEMA due to overtime labor hours, the audit also says.

“We can stop people from sandbagging or something like that so that they can get the paperwork correct, or we can continue with the necessary activities and iron out the differences after,” Randolph said.

Lafourche Parish’s end of year 2012 net position was $93.3 million, with $313,000 of that amount applicable for ongoing credit obligations. The net position increased by $6.8 million from 2011.

Taking into consideration all districts under the parish’s purview, Lafourche had $232.3 million in unrestricted assets at the end of the year, according to the audit.

Stagni also offered an “unqualified opinion” on the parish’s financial statements, which means Lafourche meets reporting requirements of the Governmental Accounting Standards Board, an achievement for which Randolph applauded her staff accountants.

But Stagni and Company’s opinion on compliance with major programs was qualified. Aside from the two FEMA-related issues auditors flagged, they issued recommendations on two other deficiencies.

One, the parish library system did not properly log its book purchases according to GASB standards, which require the costs are on the books and depreciated over a period of five years. More than $1 million in bookeeping was corrected.

Auditors expressed the opinion that parish government is responsible to ensure library purchases are properly capitalized because the system is a component unit of the parish and “can cause the Parish’s financial statements to be materially misstated.”

The firm recommended the parish track and document the purchases in accordance with the standards.

Lafourche also incorrectly recorded expenses reimbursable by federal agencies. Instead of booking expenses in the year (2011) they were actually incurred and tendering the pending reimbursement under “receivables,” the parish documented the expense the year it received the grant reimbursement (2012) for disaster funds related to Lee and the Mississippi River flood emergency, Stagni said.

“These have been corrected,” Stagni said.