A recent audit of the Village of Morse turned up more than a dozen findings.
The audit was the routine annual audit, and was conducted by the firm hired by the village. In government audits, "findings" are generally problems that are found and must be reported in a government audit.
The Village’s audit report had 13 findings, several of which were repeated from the previous year. Among the findings: A terminated employee was paid vacation and sick time for which there was no written documentation, and the amounts did not conform to the Village’s policies and procedures; the Village failed to disburse the correct fine amounts to the appropriate agencies; and officials had two sets of books for the Village’s finances. In addition, the Village overpaid a vendor, incurred bank overdraft fees for overdrawn accounts, and conducted a fund-raiser for the Police Department, which was a violation of state law. The Village also could not account for all traffic citations and failed to collect the correct amount for ticket fines, meaning some motorists might be getting a refund.
Here are the details of each finding, as well as the village administration's response. You can read the entire audit for yourself, just scroll down.
The first finding, which is extremely common among smaller cities, towns and villages, is that there isn't an employee dedicated solely to doing the books. Most smaller cities can't afford this position, and that's often the response. In this case, the village says it has determined that it is in everyone's best interest to pay the auditors to record all financial transactions.
2. A terminated employee was paid vacation and sick time which did not have any written documentation to support cumulative amounts nor did the amounts coincide with written polices and procedures.
The auditors recommended the Village properly account for all earned leave and attendance. Management concurs, and will revise the Village's policies and procedures and maintain cumulative schedules for vacation and sick leave. The Village estimates this to be resolved by June 30, 2020.
3. The Village collected and failed to disburse correct amounts to applicable agencies, meaning the village clerk paid the wrong amount to certain agencies. This means the village could be out of compliance with state law that requires that the money be disbursed a certain way. This could mean that the village is losing fine money or owes state agencies money.
The auditors recommended that controls be put in place to ensure that the right amounts are collected and disbursed timely.
Management said the Village clerk will make sure that fine disbursements are paid correctly. The Village estimates this to be resolved by June 30, 2020.
4. The Village did not properly amend their budget and exceeded budgeted expenses and uses by more than 5% in the General Fund and Sales Tax Fund; as well as fell short of budgeted revenues and sources by more than 5% in these funds. These actions put the village in violation of state law.
The auditors recommended that the Village comply with Louisiana Revised Statutes 39:1309 and 39:1311 and amend its budget upon a change in operations. Management responded that the village clerk will be sure to include all required information on all future budgets. The Village will utilize the budget and make revisions as they become necessary. The Village estimates this to be resolved by June 30, 2020.
5. In an effort to consolidate accounts and streamline their accounting process, the previous Mayor started new QuickBooks files. In the current fiscal year, the Clerk only used the Quickbooks file which was incomplete due to account activity not being recorded for certain accounts. That means that incomplete records were given to the auditors, and that monthly financial reports weren't accurate. Also, the village clerk did not do bank reconciliations on the Police Department or LCDBG accounts.
The auditors recommended that the village have only one set of books for each fund. The village says that the Mayor and Clerk will ensure that each fund only has one set of books. The Village estimates this to be resolved by June 30, 2020.
6. The Village made an overpayment to a vendor resulting in a credit. The Clerk inadvertently paid the wrong amount, the audit states.
The auditors recommend that all public funds are spent as state law requires, meaning invoices must be paid accurately. The Mayor will ensure all policies and procedures are in place and followed so that invoices are paid properly. The Village estimates this to be resolved by June 30, 2020.
7. The Village incurred several bank overdraft fees in bank accounts in several funds. This means that village checks were written when no funds were available to pay them.
The auditors recommended that the Village monitor its financials and only spend funds that are available. The Mayor will ensure that financials are monitored and checks are only written when the funds are available to spend. The Village's new administration has resolved this issue as of February 2019.
8. A hamburger sale fundraiser was conducted on behalf of the police department by its auxiliary using the Village of Morse's tax identification number. The tax ID number was used to make all purchases. This violates a state law that prohibits a public servant from soliciting anything of economic value from anyone.
The auditors recommended that the auxillary should form its own non-profit organization and get its own tax identification number for use in these situations. The Mayor said will ensure that all Village employees are familiar with Louisiana Revised Statute 42:1115 and that the Village will no longer hold fundraising events. The Village estimates this to be resolved by June 30, 2020.
9. The Village could not account for all traffic citations and several citations were missing from books issued. Ticket books turned in by the previous chief had missing tickets. Missing tickets were random and all copies were missing. That means the Village could be out of compliance with documentation and records retention regulations and there is no way for the Village to know what if any violations occurred or fees to charge.
Auditors recommended that the Village require all officers to return a copy of every traffic citation issued by the officer and all copies of every citation which has been spoiled or upon which an entry has been made without having issued the citation to the alleged violator, and appoint someone to be responsible for accounting for all tickets and maintaining all records. The Mayor and Police Chief said they will work together to ensure that there is a process that is followed when ticket books are issued and turned in. The Village estimates this to be resolved by June 30, 2020.
10. Three Village employees did not take the one hour ethics course as required by law. The Village clerk informed all elected officials and employees about the ethics course requirement but three employees failed to complete the course. That means the Village is not in compliance with Louisiana Revised Statute 42: 1170.
The Village clerk will ensure that all elected officials and Village employees complete the one hour ethics course annually. The Village estimates this to be resolved by June 30, 2020.
11. Finding: The Village's Sewer fund experienced an operating loss of $9,935 during the year. If the village doesn't keep expenses within income, it wouldn't be able to pay for any large repairs that might be needed, the auditors said.
The auditors recommend that the village evaluate the sewer operation to find ways to either reduce costs or increase revenues. The Mayor and Alderman say they will continue to monitor the situation closely. There is no anticipated date of correction as of June 30, 2019.
12. The Village received a grant and expended grant funds that were not accounted for in the general ledger. All transactions must be recorded, the auditors state. The money went into a bank account and out of it, but the account wasn't in the Quickbooks file that the clerk was using, the auditors said - and that means that the village's financial statements might be wrong.
The auditors recommend that the village clerk ensure that all transactions are accounted for in the current accounting software. The Clerk will ensure that all transactions are accounted for in the current accounting software. The anticipated date of correction is June 30, 2020.
13. The Village did not collect the correct amount of ticket fines. The Village is required to collect the amount of fines set forth in the Village ordinances and state statutes. According to the audit, the Village uses the website NCourt to allow payments electronically. The payments made weren't reconciled with the actual payments, and overpayments were collected.
That means the Village could be in possession of funds they are not entitled to, the auditors said. They recommend the Village should reconcile all payments received with actual fines and refund any excess amounts collected.
The Clerk will reconcile all NCourt payments received with actual fines. The anticipated date of correction is June 30, 2020.
Here's the full audit: