KATC Investigates has confirmed the name of the employee arrested in connection with alleged theft at the Municipal Golf Course.
Yesterday, we reported that an annual audit said that an LCG "golf shop attendant was manipulating register transactions and not entering sales in their point-of-sale system in order to misappropriate cash collections. The Government's controls identified irregularities with the types of transactions entered into the point-of-sale system. The suspected employee was questioned by the Police Department on April 13, 2022 and subsequently arrested after admitting to the misappropriation of cash collections for a period of approximately three months. Since the sales transactions were not recorded or recorded incorrectly in the point-of-sale system, the amount of the misappropriation is unknown at this time."
We reached out to LCG and the Lafayette Police Department about this incident.
Lafayette Police tell us that Davis Miller was issued a misdemeanor summons for theft on April 13, 2022. At the time, he was an employee of the Municipal Golf Course.
The audit states that he's no longer an employee of LCG.
We reported yesterday that the audit of Lafayette City-Parish Government found more than $800,000 in improperly spent tax collections, repeated issues with fuel cards and internal contracts and invoices, and failure to comply with federal reporting rules on grants.
This was the regular annual audit performed by LCG's own auditors and reported to the Legislative Auditor, who published the audit Monday. In response to the findings, LCG officials say they're either working to correct the issues or already have implemented policies, changes or training to address them.
If you'd like to read the audit for yourself, including the detailed findings and LCG's responses, click here. We've also received additional responses from LCG to our specific questions.
Here are some of the findings listed by the Legislative auditor, following their review of the audit:
- LCG officials discovered a misappropriation from one of the municipal golf courses involving a Parks and Recreation Department employee. Officials were not able to determine how much money was missing. The employee believed responsible was arrested and charged, and the case was ongoing as of the date of the audit report.
- The audit report had 15 other findings, three of which were repeated from the previous year. Those three findings were inadequate controls over fuel cards, lack of procedures to review new and existing contracts for internal departments for communication services, and lack of procedures to ensure internal invoices are paid in a timely manner.
- The newer findings included:
- Inadequate controls over construction project expenditure accruals, loans receivable reconciliations, and loan write-offs and restructurings for the First-Time Homebuyer Program.
- Improperly spent proceeds from two dedicated sales taxes and failed to file a required compliance examination with the Public Service Commission within the designated time period.
- Failure to comply with federal regulations related to CDBG money and the Emergency Rental Assistance Program.
The dedicated sales tax issue found that, during the 2021 fiscal year, LCG officials spent more than $800,000 in dedicated funds improperly.
"The Government's 1961 and 1985 sales tax collections are dedicated for capital and capital related expenditures. The Government did not comply with the purpose of the 1961 and 1985 sales tax dedications," the auditor wrote. "A capital related line item was amended to include noncapital related expenditures. Subsequently, the noncapital related expenditures were paid with restricted sales tax collections. Approximately $817,565 of noncapital related expenditures were paid from the 1961 and 1985 restricted sales tax dedications. As a result, the Government did not comply with the sales tax dedications."
A tax dedication is the legally binding way that voters are assured their tax dollars are spent the way the government promised to spend them when the tax was approved. LCG needs to be sure that all budget requests are reviewed to ensure that these promises are kept, the auditor wrote.
In response, LCG promised that procedures would be put in place to ensure that tax dollars are being properly spent, and estimated that the "project" to accomplish this would take three to six months.
When we asked specifically how something like this could happen, LCG's Chief Financial Officer Lorrie Toups, who is a CPA, said the initial contract was a capital project, and the department amended the contract to provide additional services that were not capital without changing the funding source.
We wanted to know if this kind of mistake could affect the government's bond rating, and she said it wouldn't.
"This item was corrected before the close of the audit. It is properly reflected in the audited financial statements and will not affect bond ratings," Toups told us.
The golf course issue has resulted in the arrest of an employee, the audit states. It doesn't identify the employee or list the charges, so we've reached out to the police department and LCG for more information.
The auditor said that what happened was possible because of a lack of controls at the course.
"The Government did not have effective controls over the sales transactions for their municipal golf course," the auditor wrote, and recommended that proper controls be established.
"A golf shop attendant was manipulating register transactions and not entering sales in their point-of-sale system in order to misappropriate cash collections. The Government's controls identified irregularities with the types of transactions entered into the point-of-sale system. The suspected employee was questioned by the Police Department on April 13, 2022 and subsequently arrested after admitting to the misappropriation of cash collections for a period of approximately three months. Since the sales transactions were not recorded or recorded incorrectly in the point-of-sale system, the amount of the misappropriation is unknown at this time," the auditor wrote.
The person isn't employed by LCG any longer, the audit notes. In response, LCG promised to "implement additional internal control measures, including requiring management approval of certain register transactions and video footage of the register area will be reviewed more frequently."
"Due to the early stage of the investigation, restitution has not been made nor has an insurance claim been filed. The Government is in the process of notifying the District Attorney and the Louisiana Legislative Auditor's office in accordance with Louisiana Revised Statute 24:523," the auditor states.
One of the findings was connected with the Emergency Rental Assistance Program, which involved more than $9 million in federal funds sent to LCG for distribution through local contractors. The auditors said that LCG wasn't monitoring those local agencies as required to make sure the money was being disbursed properly.
"Management should properly review and assess their subrecipients through monitoring procedures and document the results of the procedures performed. This includes ensuring the subrecipients are following all direct and material compliance requirements applicable to each federal program," the auditor wrote. "The Government did not perform subrecipient monitoring including reviewing sufficient documentation to evidence applicable compliance requirements for subrecipients are met. The Government provided $9,577,896 of emergency rental assistance to subrecipients during the fiscal year."
Because the monitoring wasn't done "in a timely manner," the auditor wrote, "the subrecipients could provide federal funds to ineligible individuals resulting in questioned costs that could go undetected."
The auditor suggested that LCG develop a policy to make sure this monitoring happens the way it should.
In response, LCG said it agreed with the finding, and promised to "enact awardee monitoring policy and procedures, in which the Government will monitor all subrecipients and contractors no less than once per fiscal year in which the awardee received funding, or otherwise as required by Federal regulation for individual grants. This project is expected to be completed within the next 3 to 6 months and will be overseen by the Community Development & Planning Director..."
We asked if there was a concern that these mistakes could affect LCG's ability to qualify for federal grants in the future.
"Procedures and policies are being implemented so that this will not reoccur. These issues should not affect future federal grants," Toups told us.