The gist: An independent auditing firm hired by LCG laid out more than two dozen findings in a troubling financial assessment of the local government.
Auditors found that LCG likely broke local and state laws. They said it violated the Home Rule Charter and state constitution, including public bid law, during the last fiscal year. Most of the violations were centered on LCG’s $110 million parishwide drainage program, which has largely defined the first term of Mayor-President Josh Guillory and his “new pace of government.”
Guillory and his top officials disputed those findings. Guillory, City-Parish Attorney Greg Logan and CAO Cydra Wingerter made the radio rounds last week and called the findings “clerical errors.” They claimed to have had too little time to respond (LCG had the findings for a week).
“No one should expect media pundits to fully understand it,” Guillory said on KPEL. “We feel that several findings appear to be just that, misinterpretation, misunderstanding the law or maybe even the facts.”
So what happens next? The report is in the hands of the Louisiana legislative auditor’s office and is under review, a formality to ensure it is in proper form. If the auditors and LCG were not able to work out their differences, it’s now a matter of agreeing to disagree, says Diane Allison, director of local government services for the legislative auditor. If the findings were not resolved, they will appear again next year, she says.
The report will go to Attorney General Jeff Landry and the governor, as is required by law. Landry’s office can choose to act on it, or sit on it. His office did not respond to messages seeking comment. Once its review of the Kolder, Slaven & Co. report concludes, the legislative auditor’s office will decide whether the audit should be sent to the local district attorney and state Board of Ethics.
LCG and the auditors are far apart on the facts. For example, LCG rejects that the spoil banks project violated public bid law when a $390,000 contract ballooned into a $3.8 million overnight caper, in part by asserting that a New Orleans law firm with expertise in public bid law signed off on it. LCG did not disclose the attorney’s opinion to the auditors and last May told The Current if it existed it would be exempt on the basis of attorney-client privilege.
Kolder, Slaven stands by its findings. The firm, which has performed municipal audits for 35 years, told The Current the report “speaks for itself.” And it made an extraordinary statement in the report itself, observing that LCG’s rebuttals “appear to be inconsistent with the source documents and other information observed or obtained by the auditor.”
What about the legislative auditor’s ongoing investigation? The Kolder, Slaven financial audit is separate and apart from the investigative audit that was confirmed earlier this year when staff from the office showed up at City-Parish Hall. The findings, however, were submitted to those investigators before being sent to LCG, according to Burton Kolder, a partner in the firm.
State auditors also appear to be homing in on drainage work and contracts. LLA’s investigative unit launched its own audit earlier this year. State investigators aren’t confined to the fiscal time frame of Kolder, Slaven.
Investigative auditors have a different set of tools at their disposal. They can seek court-ordered subpoenas or ask for help from federal or state prosecutors. LCG can respond to investigative findings, too. Findings alleging illegal activity are sent to law enforcement agencies for potential prosecution. Officials in the office have declined to put a timeline on their work.
And where are the feds in all this? There is nothing new to report here. Several sources who confirmed they were interviewed by FBI agents last year looking into the spoil banks project and Guillory’s relationship with contractor Rigid Constructors say they have had no further contact.