A new audit of BREC’s books for 2016 notes two instances of theft discovered by BREC employees. The first involved an employee of the Finance Department, who took approximately $6,700 through fraudulent payroll checks made payable to herself. She was fired and arrested.
The second involved the disappearance of a John Deere tractor worth approximately $25,000. The East Baton Rouge Parish Sheriff’s Office was notified, but no suspect had been identified as of the date of the report.
In its official response included in the audit, BREC says it requires employees to fulfill an annual ethics training as a condition of employment, adding the agency “will continue to review and improve internal controls in order to minimize opportunities for loss or theft.”
The two incidents were among the more noteworthy findings in the independent audit, which was conducted by Postlethwaite & Netterville and released this morning by the Louisiana Legislative Auditor.
The audit also highlights two issues identified in previous audits that remain unresolved. First, BREC uses some 200 credit cards for small purchases by employees. Though purchases are reviewed by supervisors after the fact, auditors say the number of cards floating around the system presents an inherent risk of misuse and suggests restricting the number of cards and employees who have access to them.
In its response, BREC says it carefully reviews expenditures and that the program is helpful in facilitating small purchases and cutting down on administrative effort. It notes that no fraud or abuse has been detected and says it is moving toward an online reporting system later this year or in 2018.
The audit also says that BREC’s various funds are not regularly reconciled and settled on a monthly basis, which is also a finding from a previous year. BREC says it will adopt a more stringent procedure for reconciling the accounts in a timely fashion and settling the account on a monthly basis.
Several other accounting issues highlighted in last year’s audit have been successfully resolved by the BREC Finance Department, the new audit notes.
In other findings, the audit shows BREC’s revenues in 2016 were just slightly below those in 2015—$72 million compared to $72.2 million—but expenses were some 18% higher. In 2016, spending totaled $68.9 million, compared to $58.3 million in 2015.
While administrative expenses were down by $4.2 million, or 20%, expenses for maintenance operations were up nearly $8 million, or more than 86%. Recreation program operations were also up some $4 million, or more than 23%, while golf operations were up nearly $2 million, or 30%, and zoo operations were up more than $1.5 million, or more than 35%.
In its explanation to the audit, BREC attributes the increased expenses to the expansion of facilities, increased recreation and maintenance costs, significant increases in pension expenses and the August 2016 flood.
—Stephanie Riegel
