How the parks system keeps track of its money is an enigma wrapped in outdated accounting methods and a revolving door at CFO.
For decades, BREC’s financial accounting system has been something of a mess. A quick peek into the agency’s books will leave you scratching your head. A deep dive and you’ll come up gasping for air. Even veteran accountants who’ve tried to deconstruct and simplify the way BREC keeps track of its money have come away shellshocked.
“Nobody in the private sector would tolerate this kind of mess,” says retired EATEL executive Bill Scheffy, who chairs BREC’s finance committee and has worked for the past two years to bring some semblance of order to the agency accounting system. “In my world you don’t put up with this.”
Consider that BREC derives the bulk of its revenues from five separate millages totaling 14.46 mills. Together they generate some $56.7 million, which goes into three separate funds—a general fund, a capital improvement fund and a special revenue enhancement fund. Those funds are then further divided into seven smaller funds, including, even a print shop fund.
This method of fund accounting is not uncommon in the nonprofit and government sectors. It’s designed for a complex system with restricted revenue sources, which you get with dedicated millages. But over the years, as the BREC bureaucracy has grown and the number of millages it receives has increased, the system has become more unwieldy.
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For years, the BREC administration was unwilling to invest in new accounting software or implement up-to-date accounting methods. Consequently, as the books became more complex, the finance department became more antiquated and less able to efficiently manage the money—much less study the data to determine which programs were performing best and which were losing public money.
Compounding the problem, say some, is a lack of oversight or in-depth understanding of the system’s finances by many BREC commissioners.
What’s more, within the admin-istration there’s been a high rate of turnover in the finance department. BREC is on its fifth CFO in as many years. Is there a pattern?
BREC officials say no, explaining each had a reason for leaving that was not connected to a system-wide problem:
- Mike Proctor retired shortly after Carolyn McKnight took over as BREC superintendent because he’d served in the post for nearly 30 years and was ready to retire, BREC spokesperson Cheryl Michelet says.
- Sheila Savoy, who was promoted from within to succeed Proctor, lasted a little over a year before leaving to take a job with the state, Michelet says. Sources, however, say there was constant friction between Savoy and McKnight.
- David Kline, who came to the position from the private sector to succeed Savoy, also lasted just a year, and had a tumultuous tenure with the agency. He left for personal reasons, according to Michelet.
- Juan Martinez was next, and he is credited with making improvements to the system and addressing some longstanding problems. But he, too, stayed on the job just one year because his wife, a U.S. Coast Guard officer, accepted a promotion in another state.
- Mike Hutchison, the latest CFO, took over just three months ago and is still getting his feet wet.
Regardless, the turnover has led to a lack of oversight and resulting accounting errors that auditors noted in BREC’s 2015 Louisiana Legislative Auditor’s report. The report included a remediation plan that BREC agreed to implement, and officials say they’ve made progress addressing some of the concerns.
They’ve also made other improvements—installing new accounting software, upgrading PCs and implementing new accounting procedures. Unlike in the past, BREC now allocates indirect costs back to individual departments, which makes it easier to see how much each department is spending and how it’s performing financially.
“It’s much better than it was 10 years ago,” says Bettsie Baker Miller, a member of the BREC finance committee and a former BREC commissioner. “They’ve definitely made improvements but we still have a ways to go.”
As of press time, auditors were finalizing BREC’s 2016 audit. It was due June 30. It is unclear what the new audit will show and whether it will identify any new problems. But Corey Wilson, chief of management and business services for BREC is optimistic.
“We’re on the right track,” he says, “and we’re doing things right.”
