Parish financially healthy… for nowJul 27th, 2011 | By William Dilella | Category: top story
Both Gerald Thibodeaux and Russell Champagne, CPA’s with the firm Kolder, Champagne, Slaven & Company LLC, presented the 2010 audit report before the Parish Council on July 11 at the Parish Government Building on Belle Chasse Highway.
The meeting, along with the accompanying report filed by the firm—which performed the audit of the 2010 Parish budgetary records—paint a picture of not only the state of the Parish’s financial records, but the health of the parish finances when put in comparison with previous years. The firm announced a clean audit opinion, and offered no findings against the parish’s own internal financial controls or regulations, so overall a favorable audit report, said Champagne and Thibodeaux.
According to the numbers provided by the firm, the Parish saw a $4.8 million increase in revenue to almost $49 million dollars, most of that coming from sales tax generated from the BP oil spill aftermath. Thibodeaux also pointed to a slight increase in the price of oil and natural gas as a source of revenue for the Parish, as those natural resources are abundant in the region.
The Parish also saw a slight increase in expenditures, $38.4 million in 2010 or about $1.5 million more than in 2009.
“A four percent increase,” Thibodeaux said. “So not much increase in expenditures.”
The only caution Thibodeaux and Champagne offered was concerning the deficit increases in the Parish’s fund balance since 2008.
“So over the past two years, your fund balance has been impacted by about $30 million,” Thibodeaux said. “That’s pretty significant. But I don’t think that is cause for concern yet, or panic, [but] concern yes, because that is a significant hit.”
Thibodeaux said that the deficit of $17 million in the remaining assets the Parish saw in 2010 still puts them within the recommended limits of the Governmental Offices Finance Association (GFOA) benchmarks—which recommend a governing body retain only around 5 to 15 percent of its budget in unreserved/undesignated, which the Parish could draw from for unforeseen circumstances or programs necessary as the Parish grows or experiences changes. Plaquemines Parish currently operates with 33 percent of its fund balance in the undesignated/unreserved fund.
“Even though there has been a significant hit to the fund balance over the last two years, [the Parish] is still financially strong when looking at these benchmarks,” Thibodeaux said.
“But it is definitely something we’d like to bring to your attention, so you’re aware of it” Champagne said. “The last couple of years, your fund balance has taken a hit. So you’re still healthy, but it has taken a hit…continue to monitor that.”
“Finance, through several meetings, has made the point very clear to us that government in general is extremely reluctant to raise revenues,” said Council Chairman Dr. Stuart Guey. “Yet, expenditures, [we] have very little control over because of cost of living, cost of fuel, cost, cost, cost. And there is a point where …if we don’t do something, the day of reckoning will hit.”
“This Council has discussed addressing some of the revenue areas where we have been reluctant to make any adjustment,” said Guey. “So, if we are successful, and we are able to come up with a formula that is acceptable to the Council, we may see that trend [of the deficit] start to slow down a little. But we won’t know that until next year.”
The legislative auditor’s office asked Kolder, Champagne, Slaven & Company to bring to the Council’s attention, two specific items regarding compliance issues surrounding legal representation for the Parish Council, as it is stipulated in the charter—which is the document that grants the Council its authority.
The two items mentioned were with regard to ongoing funding and retention of an attorney to represent the Council. First, the legislative auditor’s office suggested the Parish seek an Attorney General’s opinion on the definition of “Special Counsel” and if the Parish Council, as a legislative body, can hire “General Counsel”—as was previously attempted and defunded. And secondly, if the Council cannot hire a general attorney, what does the charter allow under the terms of “Special Counsel” that fulfills that obligation?
“Those are two complex legal issues that have a number of questions that should be answered,” Thibodeaux said. “And we’re recommending that the Council and the administration get together to determine whether or not there is non-compliance.”
With that recommendation, the two parties should begin the process of seeking an Attorney General opinion on the two matters.
In line with Attorney General opinions, former Parish President Benny Rousselle questioned if the audit report addressed concerns from the 2009 audit about incorporating FEMA funds properly and contracts regarding recovery operations that possibly violated the Parish charter.
“Did you follow up on the direct findings of the June 9, 2010 audit, to see if those items are a continuing problem, or are they corrected?” Rousselle asked.
In response, Champagne and Thibodeaux clarified that though they had performed the 2009 assessment as well, the audit addressed issues specifically outlined by the legislative auditor’s office, and that from that criteria, no deficiencies were found in the 2010 records. But any incidents marked in the 2009 audit were used to assess the Parish’s financial risks in the 2010 audit.
“We followed up if requested [by the Legislative Auditor's office], or if we felt it necessary,” Champagne said.
“I think it’s a valid point [Rousselle brings up],” Councilman Burghart Turner, District 6, said. “If the legislative auditor cited something concerning this government, during 2010, and your auditing…we shouldn’t have to request—this is me speaking as a sitting member and an audit committee member—it should be automatic…that you at least test that to see if that is still in effect.”
However, Champagne asserted that the findings Rousselle was referring to were possible infractions—which may have happened—and which put them outside the bounds of this specific audit report.
“That’s a legal issue that needs to be clarified by legal department, not by auditors,” Champagne said.
Finance Manager Lori Meyers spoke on behalf of the administration.
“The administration response to [the 2009 audit concerns] was that it did not necessarily agree with the comment that was made,” Meyers said. “But it did however agree to put the [FEMA] money in the budget and comply with the recommendation made by the Legislative Auditor’s office…and brought those numbers to the Council for the budget, and have included them since 2009.”
FEMA project funding was one of three major line items specifically mentioned by the audit report, bringing in about $48 million to the Parish in 2010, either all or mostly attributable to the hurricanes that impacted the area, according to Thibodeaux.