LCG auditor flags grave problems, but Guillory admin rejects changes

Lafayette Consolidated Government’s latest annual audit, released Friday, identifies a slew of new issues that Mayor-President Josh Guillory’s administration says do not need to be addressed. 

The report from independent auditing firm Kolder, Slaven & Company appears to be LCG’s worst audit in at least a decade, finding two dozen widespread deficiencies that led to overpayment, bad bidding practices and poor internal control over LCG’s spending, potentially violating multiple state laws.  

Many of those findings met objections from Guillory’s administration, which insists the auditors are wrong, their recommended changes unnecessary and that LCG’s actions are within the law. 

In an unusual response to the administration’s rebuttals, the auditors wrote that those arguments “appear to be inconsistent with the source documents and other information observed or obtained by the auditor.” 

Kolder, Slaven & Company Partner Burton Kolder declined to comment on the audit report Monday other than to say that the findings “speak for themselves.” 

Missing documentation

Central to the findings in this year’s audit was the discovery that LCG’s purchasing division, which oversees payments to contractors and vendors, did not have the necessary documentation to support payments that it issued. 

Missing documents were connected to detention pond projects and related land purchases. The spotty record-keeping figures into material weaknesses found in LCG’s internal financial oversight and confirms reported issues with major drainage projects while also identifying new problems in LCG’s dealings with Rigid Constructors, a contractor awarded projects worth tens of millions of dollars. 

The lack of oversight from the purchasing division breaks with how LCG has operated in the past, a deficiency CAO Cydra Wingerter acknowledged and pledged to fix, writing “no purchase request will be processed until all appropriate documentation has been forwarded to (the purchasing division).” 

Bid law violations, improper payments

Many of the auditors’ findings center around LCG’s clandestine removal of the Vermilion River spoil banks in St. Martin Parish and its beleaguered Homewood Drive Detention Pond project. 

Auditors determined the administration had potentially violated public bid laws, Lafayette’s Home Rule Charter and the Louisiana Constitution in pursuit of the spoil banks removal last year as they acquired land without proper authority, awarded $3.7 million worth of work to Rigid Constructors without a public bid and overpaid the landowners for what didn’t amount to full control of the property. 

Wingerter argued the administration was authorized to buy the land by different ordinances than were cited by the auditors, insisted a public bid was not needed to assign the work to a contractor — conflicting with what former Legislative Auditor Daryl Purpera told The Current last year — and wrote that overpaying the landowners to avoid expensive litigation was allowed by law.

The Homewood Drive Detention Pond was similarly maligned, as auditors determined LCG had not complied with state laws governing its contract with Rigid Constructors for a special process called Construction Management at Risk (CMAR) to build the pond and had improperly used city tax dollars to pay a $403,000 settlement with farmers leasing the land outside city limits where the pond was built. LCG’s recent $11.5 million settlement for the Homewood Drive pond was not included in the audit, which only considered actions taken in the fiscal year that ended Oct. 31, 2022. 

LCG again disputed the auditors’ findings, arguing they had misinterpreted the state’s CMAR law and that using city tax dollars to pay the $403,000 settlement was allowable because the detention pond would benefit city residents even though it’s located outside city limits. 

Vague invoices, un-contracted work

The auditors flagged projects and contracts awarded to Rigid Constructors, which won the unbid spoil banks removal work, and is the primary contractor for the Homewood Drive and Coulee Ile Des Cannes detention ponds, and was central to two other issues described by auditors in their latest report. 

The first was a $1 million deal for emergency excavation of detention ponds along Lake Farm Road that was awarded to Rigid at the end of August 2021 without a public bid and without a signed contract. Auditors determined the project potentially violated public bid law because it did not qualify for emergency exemptions since it was not initiated until after the emergency declaration expired in June 2021. They also found LCG’s lack of a contract for the work to be a potential violation of its internal policies.

The second was LCG’s use of $750,000 dedicated to drainage improvements to pay Rigid for excavation work at the site of a tire pit fire in Scott at the end of 2021. 

Auditors determined the funds should not have been used since the primary purpose of the contract was to respond to the environmental emergency caused by the fire and pointed out that Rigid’s invoices were so vague that they did not properly identify the work that was done, meaning “other departmental approvers were unaware that the work performed was not related to drainage improvements.” The payments were ultimately reimbursed to the dedicated drainage fund by environmental management funds. 

Wingerter disputed each of those findings, arguing that a public bid and signed contract were not required for the Lake Farm pond work and that drainage funds could be used for the tire pit fire response since LCG decided to make the resulting pit into a detention pond at the location. She made the latter argument despite the dedicated drainage fund having long been reimbursed.

Auditors also raised concerns about LCG’s pooled cash account, where city and parish tax dollars are stored together, after LCG used it to front $20 million for the Homewood Drive and Coulee Ile Des Cannes ponds while state reimbursements were held up for months. 

Both projects are outside city limits, leading auditors to determine that city tax dollars were improperly used to temporarily pay parish expenses, in potential violation of Lafayette’s Home Rule Charter. They recommended LCG reconsider its pooled cash account and “determine the appropriate alternate funding source” for similar situations going forward. 

The results of the annual audit have been sent to the Louisiana legislative auditor, which is conducting an investigation into Guillory’s administration, though it is unclear when the results of that probe will be released. 

Kolder, Slaven & Company is expected to present its findings to Lafayette’s city and parish councils during a joint meeting at City-Parish Hall on June 6. 

An earlier version of this report incorrectly represented LCG’s position on its authority to buy land in St. Martin Parish. We regret the error.