LEONARD GRAY / L’Observateur / June 23, 1999

LAPLACE – Parish Councilmen heard a blistering review of St. John theBaptist Parish government finances at their June 15 meeting. Thisprompted financial officer Claudette Rafael to offer a spirited defense of her practices.

Philip Rebowe, of Rebowe & Company, CPA, noted for the council”s finance committee four material weaknesses,” including – insufficient records on fixed assets; more than 90 bank accounts, making for untimely bank reconciliations and unreconciled differences; inadequate controls over the check-writing machine (which he said was left unsupervised in a hallway); and improper use of parish time-clocks by employees.

Other problems included pay advances to employees and no updated fixed asset records, both in violation of state law. In addition, overtime wagesfor the Sewer Department represented 26 percent of total wages (double the percentages in Jefferson and St. Charles parishes), with half of theseovertime wages due to seven of the department’s 35 employees.

Excess 1-cent sales tax collections, in violation of council resolution, were also noted, as well as interfund borrowings dating back to December 1995 which have not yet been repaid.

Rebowe also pointed out a need for better management of the parish”s investment portfolio, and also an overfunding of the parish”s reserve and sinking funds.

Finance committee chairman Perry Bailey noted that some of the indicated problems were “repeat” offenses, and added, “What is the problem?” Rafael addressed each of the points in turn and added further information during the regular council meeting which followed the finance committee meeting.

She readily acknowledged the fixed-asset inventory problem, and informed the council, “You have new chairs. Where are the old ones?” She continuedthat an asset inventory is under way and a report should be completed by the end of the year.

The large number of bank accounts was put down to the shift of fiscal agents from Bank One to Regions Bank late in 1998. “That will solveitself,” she said.

The check-writing machine, Rafael corrected, was not in a “hallway,” but in the midst of the finance deparment area. “There were controls in placeon the check-writing machine,” she said, and added that not only did a user need the correct bank account number on which to draw the check but also that the plate was locked up every night.

Rebowe pointed out that a dozen different makes of time-clocks were in use by the parish, making tampering much more possible. “There are someinstances of suspected alterations,” he said.

Rafael commented, “That”s a problem the department heads will have to solve.”The pay advances were put down by Rafael as a long-established policy of the parish administration, and pointed out people who received such advances in hardship cases later worked at no pay to balance out the books.

Overtime problems will be minimized, with closer monitoring of overtime practices, according to the written responses given by the administration.

Rebowe noted, as to excessive 1-cent sales tax collection, that the parish took in an excess of $794,000, which will be held for an audit adjustment for the 1998 fiscal year book-closing. As to interfund borrowing, theGeneral Fund made a $200,000 payment to the Sales Tax District and, in March, the parish implemented a program where the General Fund pays $20,000 per month until the debts have been repaid.

It was noted by Rebowe that the parish”s investment portfolio consisted of short-term U.S. Treasury Bills with original maturities of one year orless. He recommended instead U.S. Treasury Securities, with longer-termmaturities to get higher investment yields. The administration respondedthat they will consider that recommendation.

Finally, Rebowe addressed the Y2K-compliance issue and reported that the parish”s fixed-asset software is not Y2K compliant, and also that the parish has not yet met with major suppliers, vendors and service providers to determine their own Y2K status.

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