For the second year in a row, auditors found issues with the finances of the City of Carencro.
Last year, auditors listed 26 findings - including problems with financial record-keeping, budgeting, reporting, handling of tax income, and a Constitution-violating donation of legal services to a non-profit. Auditors also found that the city failed to remit all required payroll taxes to the IRS on time: that was an issue in the payroll software that city officials discovered on their own and are working to correct. To read our story about last year's audit, and to see it for yourself, click here.
This year, the auditors were unable to issue an opinion on the city's business-type activities and culture/recreation fund because a lack of adequate audit evidence - but they also had only eight findings.
Here's the rest of the Louisiana Legislative Auditor's summary of the audit:
"The auditor’s report had eight findings, four of which were repeated from the previous year. The auditor found the City lacked adequate segregation of duties for its accounting functions, lacked adequate controls over the preparation of its financial statements, did not have a staff person with the necessary qualifications to review payroll functions and records, and failed to properly distribute revenue from the 1993 Sales Tax Fund. In addition, the City loaned funds to a nonprofit organization and allowed Carencro Area Youth Sports, Inc., to use its recreational facilities at no charge – both of which may be a violation of the Louisiana Constitution. The City also failed to amend the budget for the 1967 Sales Tax Fund when actual expenditures exceeded budgeted expenditures by more than 5% and the budget for the 2016 Sales Tax Fund when actual revenues fell short of budgeted revenues by more than 5%, as required by law."
To read the audit for yourself, scroll down.
The issue with the auditor's inability to issue an opinion on business and culture/rec activities was attributed to record-keeping:
"Management of the City of Carencro did not retain sufficient records to provide adequate audit evidence necessary for us to express an opinion or provide any assurance on the business-type activities and culture & recreation fund," the city's auditors wrote.
Part of the problem is traced to the dissolution of the city's Parks and Recreation Commission in 2023, auditors note. The city took over operations at that time.
"As a result of a fire and the termination of key administrative staff, the Commission was unable to provide adequate records for an audit. As such, the Commission financial statements contained a disclaimer of opinion for the year ended November 30, 2023," the audit states.
"Business-type activities," as described by the auditors, include Gas, Water, Sewer, Sanitation, Pelican Park, Carencro Sports Complex and the Community Center. There's a utility fund that includes income and expenses for gas, water, sewer and sanitation, as well as a culture/recreation fund that includes income and expenses for Pelican Park, the sports complex and the community center. The audit shows the utility fund with an operating deficit of $385,000 and the culture/recreation fund posting an operating deficit of $1.2 million. Because of fund balances and transfers in, however, the funds are not in the red.
The findings listed in the audit are:
1. Inadequate segregation of accounting duties: This is an extremely common finding for smaller municipalities; it means the auditors feel there aren't enough staff handling accounting duties.
Here's the city's response:
"Due to the size of the operations and the cost-benefit of additional personnel, it may not be feasible to achieve complete segregation of duties, however, the City has implemented mitigating controls in certain key areas including hiring outside accounting consults to assist with bank reconciliations and other account reconciliations."
2. Inadequate Controls Over Financial Statement Preparation - this finding was first noted in 2021. It has to do with accounting rules and procedures created for governments. Carencro doesn't have a staff member certified in those policies.
Here's the city's response:
"The City has evaluated the cost vs benefit of establishing internal controls over the preparation of financial statements in accordance with GAAP and determined that is in the best interest of the City to outsource this task to the independent auditors, and to utilize the outside accounting consultants to assist with the preparation as well as the initial review of the draft financial statements and notes prior to approving them and accepting responsibility for their contents and presentation."
3. Qualified Staff to Review Payroll Function - this finding was first noted in 2024. It means the city didn't have a staff member qualified to handle the review of payroll functions. The recommendation is to hire someone who has that training.
Here's the city's response:
"The City will evaluate the recommendations above and develop additional controls over the payroll process to include utilization of the outside accounting consultants in some areas and will propose a best practice review of the policies and procedures surrounding payroll by an employment attorney."
4. Failure to transfer Sales Taxes in Accordance with Ordinance - this finding was first noted in 2024. This finding has to do with the money raised by the city's 1993 sales tax, which is dedicated to fire and police protection, operation and maintenance of recreational facilities and programs and capital improvements in the city. Each area was supposed to get one-third of the sales tax collections, after expenses, but that didn't happen.
"Due to inaccurate transfers between bank accounts, each recipient of the tax did not receive the required amount," auditors wrote.
Here's the city's response:
"The City and outside accounting consultants will work with the audit firm to identify the transfers made incorrectly and will correct these in the current fiscal year through additional transfers between these impacted funds."
5. Donation of Public Funds - this finding was first noted in 2023 and has to do with the city's relationship with a non-profit.
Auditors said the city didn't pass an ordinance about the organization or sign a cooperative endeavor agreement with the non-profit.
"The City of Carencro did not have appropriate policies and procedures to ensure that public funds were appropriately spent," auditors noted, adding that this means the money was loaned to the non-profit, a possible violation of the state Constitution.
Here's the city's response:
"During the audit year, the management of the City and. the non-profit organization have been working with their respective legal counsel to ensure the cooperative endeavor agreement was acceptable, and the agreement was executed in January 2025."
6. Failure to Charge for Use of City Facilities - this finding was first noted in 2024 and deals with CAYSI, or the Carencro Area Youth Sports Inc. group, which was allowed to use city recreational facilities for no charge without an ordinance or cooperative endeavor agreement.
"The City of Carencro did not have appropriate policies and procedures to ensure that organizations and individuals who use public facilities were properly charged," auditors wrote.
Here's the city's response:
"Management of the City and the non-profit organization have been working with their respective legal counsel to ensure the cooperative endeavor agreement is in place before any additional facility use is allowed."
7. Failure to Amend Budget - this finding was first noted in 2023 and deals with income from the 1967 Sales Tax and the 2016 Sales Tax. Auditors noted that the use of funds from the 1967 tax exceeded the budget by more than 5 percent, and that revenues from the 2016 tax failed to meet the budget by more than five percent.
"The City did not properly monitor compliance with the budget," auditors wrote.
Here's the city's response:
"The City will monitor compliance with the budget and amend the budget when total expenditures and other uses exceed total budgeted amounts or when total revenues and other sources fail to meet budgeted amounts."
8. Record Retention Issues - this finding was first noted in 2024, and goes back to the dissolution of the parks and rec commission.
Here's the city's response:
"This finding continues to be the result of the fire that destroyed the majority of the historical records of Pelican Park. Without these records, the proper accounting for the fiscal year to comply with generally accepted accounting principles could not be maintained. These issues are continuing into the new fiscal year and it is expected that for fiscal year ended November 30, 2025, this can be partially corrected with the goal of getting all policies, procedures and controls in place to allow for an opinion to be issued in fiscal year ended 2026."
Here's the audit:
