Louisiana auditor’s report cites possible violations of state law by former Vidalia mayor’s administration

Published 11:30 am Monday, July 2, 2018


VIDALIA — A Louisiana Legislative Auditor’s assessment, released Monday, of the Town of Vidalia’s operations under the leadership of former mayor Hyram Copeland identified possible violations of state law and town policy and makes recommendations on correcting processes to come into compliance.

At the request of Mayor Buz Craft when he took office in 2016, the LLA reviewed the internal controls of the previous administration and provided recommendations to improve those controls. Closely working with the current administration the LLA reviewed documents from September 2015 through January 2018. The report does not include an audit of the town’s financial statements.

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Monday’s report listed possible violations including paying leave for employees without time sheets and proper documentation, violating the state’s open meeting laws, paying bonuses that appear to violate state law and paying for the employee portion of the city’s health benefits for employees and a city alderman.

Craft said he is thankful for the work of the state auditor’s office.

“This was something we wanted before I came into office,” Craft said. “There was no transition when we took office. We were basically handed the keys the day before we took office.”

Craft said when he was elected he had many questions he wanted answered about the operations of the city during the prior administration. Many of the questions have been answered in the report, Craft said.

Monday’s report listed the following possible violations of state law or town policy:

Municipal Classification: The report said that city officials were not able to confirm whether Vidalia’s designation had been officially changed from a “city” to a “town,” as required by law.

The U.S. Census in 2010 said that the town of Vidalia had 4,299 people, which is fewer than the 5,000 or more residents needed to be classified as a city by Louisiana law.

Local budget: The report cites the town for not complying with the requirements of the Local Government Budget Act and the town continues to budget expenditures that exceed the funds available in the general fund for the next year.

In the report, Craft said the town will utilize the budget template provided by the LLA and will prepare a written financial improvement plan that addresses the town’s general fund balance.

“We have been tightening our budget for the last two years,” Craft said.

Paying leave for former mayor and chief of police: Former mayor Copeland received $82,692 and former police chief Arthur Lewis received $36,517 for accumulated personal and vacation leave. Investigators said the town provided leave balances but were not able to provide time sheets or leave slips to document the hours worked and the amount of leave taken by Copeland or Lewis.

Copeland’s attorney David LaCerte from the Baton Rouge firm Sternberg, Naccari & White challenged that part of the report saying Copeland was owed his accrued unpaid leave balance at the end of his administration and that formal records were maintained and accrued unused leave was tracked for “every employee,” including Copeland.

LaCerte wrote that LLA’s assessment included “fundamental defects and factual errors” and requested that report be amended to rescind any provisions that put Copeland in “an unfair light.”

Paying leave for former employees: The report also said the town paid leave balances for six terminated employees. At least $11,054 of the amounts paid exceeded the amounts allowable by town policy.

Employee health insurance: The report said the town may have violated town policy by paying both the employer and employee portions of health insurance premiums for three employees while they were on workman’s compensation as well as for an unnamed alderman.

Open meetings law: The report said the town may have violated the state’s open meetings laws in April 2016 when it discussed Copeland’s legal fees in executive session, “even though the meeting did not appear to meet executive session criteria.” Aldermen agreed to pay $103,000 in attorney feeds Copeland accrued during an investigation into Copeland’s involvement in Vidalia’s plan to borrow money to purchase land, some of which Copeland was previously an investor, to create a development in hopes of later luring investors.

Incentive pay: The report said the town made $109,725 of incentive payments to 162 employees and elected officials. The report said such payment may be in violation of the state law, which prohibits payments of bonuses to employees.

Craft said the town has already started to address many of the concerns cited in the report.

“A lot of the things we have corrected and fixed,” Craft said.

Although he is pleased with the report, Craft said he wishes the auditor’s office could have acted more quickly.

“I am disappointed it took two years to get it done,” Craft said. “This has been a long time coming.”

The report also listed other findings and recommendations, including changes to written policies and procedures, use of credit cards, controls over payroll, operations of the town’s utility operations and travel policies.

The report said the town’s previous administration lost more than $300,000 on its utilities based on the 2016 audit. The report also said the town did not have an ordinance setting forth utility rates and cut off procedures. The town’s current administration had a past-due utility receivables balance of more than $90,000 as of October 2016. Failure to collect money owed to the town may violate state law, the report said.

Craft said the town is in the process of conducting a utility study to develop a comprehensive ordinance that sets rates.

The report also questioned the town’s ordinance over royalty revenues from the Hydroelectric Plant, saying that the ordinance does not “clearly outline the priorities relating to uses of the revenues” from the plant.

“I disagree with (the findings),” Craft said. “I think the town’s ordinance is clear on the priorities.”

Auditors also reviewed the operations of the town’s convention center. The report says the facility showed a loss of $659,000 in the fiscal 2015 annual audit and a loss of more than $1 million in the 2016 audit. The report recommends the town evaluate the viability of the center and develop strategies to eliminate the recurring losses.

Craft said his administration has been working to make the convention center more viable. Since taking office, Craft said the money being lost by the convention center has been greatly reduced.

Attempts to reach Copeland Monday were unsuccessful.