An audit of the Guillory Administration's last year in office found a $17 million overdraft for detention ponds built outside the city limits - that was covered by the city's bond construction fund and its earnings.
Auditors wrote that "does not appear to be within the intent of the sales tax dedication," and it was one of several new and older findings related to the detention pond projects and how they were paid for.
The audit, which was posted today, looks at how the city's business was conducted while Josh Guillory was Mayor-President in 2023, but the responses are from the current administration of Mayor-President Monique Boulet. The work on the audit began in January, right after Boulet was sworn in.
There were multiple findings from prior years that hadn't been taken care of before the fiscal year ended in October 2023, as well as several new findings by auditors. If you want to read the audit for yourself, scroll down.
Another new finding says that some people were receiving LUS Fiber packages that either were being billed at a lower cost than they should have been - or weren't being billed at all. Providing services for free is a violation of the state constitution, auditors noted.
In response, the Boulet administration said they are implementing new policies that require documention from a customer before changes are made to services, adding that "LUS Fiber staff will not make provisioning changes without an order," the response states. This fix is expected to take two to four months to complete.
The names of the people receiving free fiber are not listed in the audit, but we've asked for them.
New findings also listed issues with Fiber inventory - auditors couldn't locate fire sticks that had been checked out - and fixed assets. Auditors say LCG could not account for an amplifier and a Sony PlayStation 5 that had been purchased with LCG money for the communications division.
As in previous years, several findings were related to the way the Guillory administration's detention ponds were handled.Several agencies currently are investigating various aspects of those projects, including the state Legislative Auditor, the FBI, the EPA and the U.S. Army Corps of Engineers.
Here's the full text of that finding about the $17 milllion overdraft related to detention ponds:
"The Government had a grant related fund participating in its consolidated cash account that recognized an overdraft of approximately $17,751,504 with approximately $17,731,263 being related to the construction of detention ponds within the unincorporated parish limits. The overdraft from this fund was allocated 28.61% to the City General fund and 5.22% to the City Combined Bond Construction Fund which effectively reduced its average balance when calculating the distribution of monthly investment earnings. The City Combined Bond Construction Fund’s cash or its respective earnings are being used for projects located outside the City limits, which does not appear to be within the intent of the sales tax dedication."
The result of the finding is, according to auditors, that "the Government may not have complied with their Home Rule Charter, policies and procedures, and/or enabling legislation by improperly utilizing the resources of other funds participating in their pooled cash account."
In response, the current administration said that the current system is being replaced by a new financial system that will track money in separate funds. That way, interest earnings will be properly recorded in the correct fund, they say.
"Going forward, LCG will also assign staff to review monthly the City and Parish portions of the cash balance in the Consolidated Cash Account to ensure that each entity has sufficient cash to cover their expenditure needs," the response states.
A similar new finding was recorded about the Homewood and Ile des Cannes detention ponds:
"The Government approved through budget amendments and paid construction costs of approximately $791,212 and $7,999,999 from the City’s Sales Tax Capital Improvement fund and City Combined Bond Construction fund, respectively, for the Homewood and CIDC Detention Pond projects" and neither are in the city limits, the audit states.
There is no paperwork to justify using city money on those projects, neither from LCG attorneys at the time nor LCG engineers at the time, auditors found.
"Additionally, the Government received reimbursements from a State grant program in the amount of $4,999,999 related to the costs charged to the City Combined Bond Construction fund. This amount was not applied to the City Combined Bond Construction fund’s respective share in their consolidated cash account as of fiscal year end," auditors found.
A previous year finding, from 2022, also concerned spending city money outside the city limits on drainage projects. This one concerned a payment made after property was expropriated for detention ponds; LCG paid a farmer more than $400,000 for lost revenue and crops.
And, the previous finding on the spoil banks project, also from 2022, also was about spending city money outside the city limits on drainage projects. In that case, more than $3.2 million in city money was spent on the project - which is located in St. Martin Parish - without "documented legal determination under both sales tax dedications from the Government’s legal counsel and justification from their consulting engineers for the cost allocated to the City was not obtained to support the allowability of the amounts charged to the dedicated sales taxes."
In these cases the Boulet administration said their City-Parish Attorney and other lawyers are looking over everything, including the sales tax dedications, to establish what can and what cannot be funded by that income. The Boulet administration is also changing the way the accounting is done, so that the funding will be separated clearly and future projects can be assigned to the right fund. All this work should be finished by this fall, the administration says.
There also were additional details revealed on findings from previous years. For instance, a 2022 finding about the use of parish drainage funds to deal with the Scott tire fire and digging of a detention pond had previously listed issues with lack of documentation. That meant it wasn't possible to determine if the project should have been bid.
This time, the Boulet administration stated that the handling of the project bypassed the purchasing department - meaning that the usual checks and balances to determine if something should be bid weren't applied - and the project spending also wasn't monitored by purchasing staff.
"The current Administration believes existing Purchasing policies and procedures are adequate to ensure compliance with all aspects of Public Bid Law and will not allow projects to be handled outside of Purchasing’s oversight. Future projects will be carefully reviewed to ensure that the scope of the project complies with dedicated funding sources," the response states. That measure was implemented before the audit was even complete, officials said.
Another finding, which first came to light in 2021, also deals with spending city money outside the city limits. In that finding, auditors determined that sales tax money collected in the city which were dedicated in 1961 and 1985 were being spent on to "develop a Comprehensive Stormwater Plan for the Parish of Lafayette.
Here's what auditors wrote about that:
"The original contract was budgeted to be funded 50% from the Parishwide Drainage Maintenance Fund and 50% from the City Combined Bond Construction Fund. The allocation of the Comprehensive Stormwater Plan for the Parish of Lafayette does not appear to be within the intent of the sales tax dedication, which is to finance capital improvement projects within the City of Lafayette. Additionally, invoices of approximately $152,074 for the Comprehensive Stormwater Plan for the Parish of Lafayette were charged to the Government’s City Sales Tax Capital Improvement Fund. These professional services were budgeted to be funded 50% from the Parishwide Drainage Maintenance Fund and 50% from the City Combined Bond Construction Fund. Cause The Government did not utilize the sale tax dedication provisions when determining the allowability of expenditures to be budgeted and purchased with these restricted sales tax proceeds and invoices submitted were not properly reviewed to determine the budgeted fund to be charged. Effect The City’s 1961 and 1985 sales tax dedications are being utilized to fund parishwide expenditures."
In response, the Boulet administration again said they have their attorney looking at everything to see if any of the spending was allowable under the tax dedications, and talking to engineers to determine if there was a benefit to the city from these projects. They also repeated their plan regarding the accounting for the funds, which should help ensure that projects are budgeted in the proper accounts.
Here's the audit:
