The town of Oberlin is under scrutiny after a state investigative audit found it did not adopt a budget for three consecutive fiscal years, failed to budget $640,365 in federal American Rescue Plan Act (ARPA) and may have misused funds to pay employees, some without proper documentation.

It also found problems with the handling of the Local Agency Compensated Enforcement (LACE) program operated by the Oberlin Police Department.

The findings were among several transgressions outlined in a 48-page audit released Monday by Legislative Auditor Michael J. “Mike” Waguespack. The report was submitted to the Allen Parish District Attorney’s Office.

The state launched the investigation after receiving complaints regarding the town’s use of public funds. As part of the investigation, auditors interviewed town employees, examined documents and reviewed state and federal laws.

Among the findings, auditors found that the town may have violated state law when it failed to properly adopt a budget for fiscal years 2021 through 2024. Auditors recommended that the town adopt a budget before the start of the fiscal year.

The town may have also violated state law in failing to maintain an ordinance book listing all of the ordinances approved by the town council after it was unable to provide an ordinance book to investigators. Auditors recommend that the town maintain an ordinance book.

In a March 4 response letter to Waguespack, Mayor Larry Alexander said systems are being put in place to prevent the issues in the future. The town has hired a certified public accountant firm to help ensure the process is being followed and implemented correctly, he said.

The audit also revealed that the town failed to budget $640,356 in American Rescue Plan Act (ARPA) funds and improperly used $35,076 of those funds to pay elected and appointed officials, some without proper documentation.

According to the audit, the funds were deposited into a separate ARPA bank account and later transferred to the town’s general fund account.

The town also failed to budget the use of the ARPA funds as required by ordinance and could not provide an accounting of how the APRA funds were spent after the transfer.

The use of the funds may have violated state law since the town did not budget and could not account for the ARPA funds, according to the audit.

Auditors also found the town may have violated state law when it paid four employees and the town attorney for working on the ARPA funds. The town could not provide records to document when the work was performed or what was done.

The audit also found the town used $192,579 in dedicated sales tax revenue to pay salaries from April 2022 to March 2023. The use of the dedicated funds for salaries may have violated the tax proposition approved by voters for maintenance, operation and improvement to the sewer system, streets and recreational facilities.

Auditors recommend the town recover the dedicated sales tax funds.

Alexander said a dedicated account has been established for handling restricted tax revenue and that all transfers will be attached with specific invoices showing how the funds are being directed.

The audit also found the former finance clerk, who had the access and ability to make changes in the accounting system, including the payroll ledger, paid herself for unearned leave and did not record all sick leave she used.

The clerk identified in the audit as Angelina Conner used 43 hours of sick leave that she did not earn from March 21, 2022 to Dec. 4, 2022. Timecards showed she used 123 hours of sick leave, while the town’s accounting system shows she used 76 hours of sick leave during that time.

Conner may have violated town policy and state law by using leave she did not earn and paying herself regular hours when her time sheets show she used sick leave.

Former town clerk Charlotte Artis was also improperly paid $10,896 for 404 hours of overtime from March 30, 2022 to Dec. 19, 2022. The mayor did not approve her timecards and only signed one of her payroll checks, according to town records.

The town council passed a motion on March 16, 2022 to eliminate overtime in all departments as part of its budget cuts.

Auditors said it does not appear Artis was entitled to overtime and she may have violated state law because the time sheet was not approved by her supervisor and she signed all but one of her payroll checks.

In a written response to auditors, Artis said the council discussed eliminating overtime hours several times in 2022, but never approved it by an ordinance or resolution. She said all departments continue to work overtime hours due to staffing.

She contends her payroll checks were always done with the finance clerk, town clerk and/or the mayor. She said the mayor was always informed by the finance clerk of the hours that employees worked and that she did not set her rate of pay.

The audit said the town should set the pay for all elected officials and the town clerk by ordinance, obtain proper documentation prior to issuing any payments and to follow policies regarding leave. It also recommends having a supervisor review employee leave balances and approve the use of leave before an employee is allowed to use leave, as well as implement a system where a separate employee inputs time and leave into the payroll system from the one who verifies the time and leave and signs the checks. Additionally, payments made to town officials should not exceed amounts approved by the town council.

Alexander said the town will work with the district attorney to determine if any steps need to be taken to recover monies that were not properly dispersed and accounted for through the previous process.

In addition, he noted that the town is implementing a system to track and verify sick leave and vacation time. The information will be tracked by multiple employees and signed off by the mayor, Alexander said.

In addition, Alexander said the town clerk will be paid as salaried and will not receive overtime pay outside of the budgeted salary.

The audit also found the town used $192,579 in dedicated sales tax revenue to pay salaries from April 2022 to March 2023. The use of the dedicated funds for salaries may have violated the tax proposition approved by voters for maintenance, operation and improvement to the sewer system, streets and recreational facilities.

Auditors recommend that the town recover the dedicated sales tax funds.

 

Alexander said a dedicated account has been established for handling restricted tax revenue and that all transfers will be attached with specific invoices showing how the funds are being directed.

Auditors also found that the town operated its own Local Agency Compensated Enforcement (LACE) program through the mayor’s court without an agreement with the district attorney. It further found that the officers issued citations that specified violations of state law instead of town ordinances and that the town did not remit all the mandatory court costs required by the mayor’s court.

Auditors also found that Police Chief Grady Haynes improperly reduced and modified 25 LACE tickets from moving to non-moving violations from October 2021 to February 2023, which may violate state law. In addition, the police chief or his designee failed to sign the tickets as required by state law. Haynes said he does not sign the citations because the previous police chief did not sign them.

According to Haynes, the town and the police department entered into a LACE agreement prior to him becoming police chief. The program allows off-duty officers to work extra traffic details to help supplement officers’ low pay.

Haynes could not provide auditors with a contract or cooperative endeavor agreement between the police department and town for the LACE program. He did provide an undated LACE rules document.

Haynes said during his tenure as police chief there have been three different CPAs, three different attorneys and annual audits made and no conversations were ever made that anything was improper.

Haynes said the reduced tickets were approved by the city attorney and done before the citations were entered into the system. He stated that he reduces the charges on a citation if someone requires assistance and that he is allowed to change a ticket until it is entered into the system.

Auditors said the town should seek an attorney general’s opinion on the LACE program, adopt state laws into ordinance where the town desires to use state law to write traffic citations on state highways and ensure the funds are distributed according to state law. They also recommend that the police chief, or another supervisor, sign all town citations and that the police chief stop reducing or modifying traffic tickets.

Alexander said the LACE program has been discontinued. He said the town is working with the district attorney to establish a system for handling various misdemeanor offenses as well as traffic offenses.