Jun 10, 2014 10:36 AM by AP
An audit report for the city of Alexandria in fiscal 2013 includes three findings questioning how the city handled financial transactions.
The Town Talk reports the city disputed the interpretation on the most serious finding, alleged non-compliance of the Louisiana Local Government Budget Act. But it said it would follow the auditor's recommendation in the future related to that issue, which involved refinancing of bonds.
The city also said it has addressed the other two findings in accordance with the auditor's recommendations.
The audit, performed by the accounting firm of Payne Moore & Herrington LLP for the city's fiscal year that ended April 30, 2013, was released Monday on the Louisiana Legislative Auditor's Office website.
The most serious of the findings was listed as "Violation of the Louisiana Local Government Budget Act."
The audit said the act requires adoption of a budget amendment "when actual total revenues and other sources within a fund are failing to meet total budgeted revenues and other sources by five percent or more or when total actual expenditures and other uses within a fund are failing to meet total budgeted expenditures and other uses by five percent or more."
The audit said the city's General Fund expenditures in fiscal 2013 went over the 5 percent threshold.
That came about, the audit said, because the city did an "in substance defeasance" of 1998 bonds by issuing 2012 bonds. "Neither the revenue from the new bonds nor the payment made to the escrow agent to defease the old bonds was budgeted because the related revenues and expenditures were netted in the general fund. Because the revised statute does not allow netting of other sources and uses, the payment made to defease the bonds created this unfavorable budget variance of more than 5%," the audit said.
In its response to the finding, the city said its Legal Division did not agree with the auditor's interpretation, but that the city would abide by the auditor's recommendation.
"The City notes that the auditor's view and that of the Legal Division differ on this issue," the city's response said.
The city explained that two related transactions occurred on the same day.