Is there an auditor in the house? “There is nothing new under the sun but there are lots of old things we don’t know.” A Jefferson Parish political corruption scandal update.

Actually there is an auditor in the house and we have a report that illustrates why governments should have strong internal and external audit functions. Lets start with Jefferson Parish’s unfolding political corruption scandal as the Times Picayune’s Mark Walter reveals that Aaron Broussard showed the parish’s internal audit staff the door not long after he took office:

A month after former chief administrator Tim Whitmer created the insurance agency that would later torpedo his career in parish government along with that of former Parish President Aaron Broussard, the parish in November 2005 eliminated the position of internal auditor, an official whose duties include monitoring the parish’s financial workings and contracting practices.

Interim Parish President Steve Theriot revealed this week that he learned the Broussard administration had abandoned the job. The revelation surprised some members of the Jefferson Parish Council, although Council Chairman John Young said he remembers the move as a cost-saving measure in the uncertain days after Hurricane Katrina.

Is this Young guy a clown or what in his day job? At best this was an ignorant, penny wise pound foolish mistake but we’ll let the self serving jackasses that make up the Parish Council serve up a couple more whoppers hoping that a gullible public buys into BS in order to drive home the point.

Council members said it’s unknown whether the internal auditor would have spotted conflicts that were emerging as Whitmer’s Lagniappe Industries reportedly sold its services to parish vendors and agencies, but they said it might have helped to have another accountability mechanism in place.

I guess these council member are technically correct on this since such speculation is would be pure conjecture but hindsight does tells us the Parish Council was asleep at the switch this entire time. But then again, on second thought how could any competent internal audit staff miss the #2 man in the executive branch moonlighting in the insurance brokerage biz and selling Parish government. The notion is beyond silly.

I remember sometime back in 2006 there was a lot of belly aching in certain Louisiana political circles, faithfully parroted by certain members of the media, that complained Mississippi was receiving disproportionately more recovery money than Louisiana. I knew instinctively the whining had to be a distraction from something else and I think we’re getting a clear picture of that something else. And while Jefferson Parish needed the full attention of its elected leadership to recover from the storm, the pols instead used the ensuing chaos to enrich themselves as we continue:

“I definitely think it should be there,” said Parish Councilwoman Cynthia Lee-Sheng, who is a forensic accountant and just learned about the absence of an internal auditor when Theriot mentioned it in a meeting of the Louisiana Legislative Audit Advisory Council. “You always want to have internal controls.”

Since Ms Lee-Sheng is a credentialed expert in this topic as is your humble blog correspondent I would hope that reporter Walters would follow up with the following questions to Ms Lee-Sheng:

Who is responsible for establishing and maintaining and providing oversight for the system of internal controls?

My follow up question would then be how in the heck did you guys miss it?

Speaking of internal controls I would submit this is a very rich area to obtain further background. Certainly a government the size of Jefferson Parish would fall under fall under the requirements of OMB Circular A-133 which would then mean the external auditors opined on the functionality of the system of internal controls, both over federal programs and entity wide.  Not having an internal auditor in a government of that size would be a big red flag IMPO. I’m personally now very curious as to the contents of the last single audit of Jefferson Parish especially the required opinions over internal controls and what (if any) reportable conditions or material weaknesses were reported.

I’ll close by quoting one of my favorite writers Ambrose Bierce who wrote, “There is nothing new under the sun but there are lots of old things we don’t know.” How soon we forget the Roslyn School District Scandal where corruption was institutionalized and the school board was asleep at the switch as the official post mortem reported:

The old board’s shortcomings, according to the report were its failure to have the Audit Committee report regularly to the board on financial matters, its failure to report wrongdoings by district members to the district attorney’s office, and a similar failure by a former vice president of the board to immediately report funds embezzlements to other board members.

Does any of this sound familiar folks? I’ll note in the Roslyn case, the audit partner from the external audit firm was also indicted and served jail time for being a participant along with the superintendent who was convicted and sentenced to 4-12 years. More important for the longer term was that the voters there tossed the old school board in its entirety. We’ll see what happens in Jefferson Parish where the norm is finger pointing rather than accountability.

sop

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