South Central Planning and Development CommissionLocal Government

Criteria -In accordance with R.S. 39:1311, the governing authority must adopt a budget amendment if there is a 5% or greater variance in actual expenditures over budgeted expenditures. Condition - The Commission did not adopt a budget amendment in the loan fund for the 5% overage in expenditures for the fiscal year ended June 30, 2020. Cause - The Commission failed to amend its adopted budget. Effect - The Commission did not comply with state budget laws. Recommendation - We recommend that the Commission adopt budget amendments for 5% overage in expenditures. Views of Responsible Officials -The Commission will adopt a budget amendment each year going forward when there is a 5% or greater shortage in revenue or a 5% or greater overage in expenditures or if there is a 5% or greater variance in the actual fund balance at the beginning of the year.

Department of Housing and Urban Development Small Business Recovery Loan And Grant Program - Revolving Capital Fund, Small Business Recovery Loan And Grant Program - Innovation Program, Small Business Recovery Loan And Grant Program - Acadiana Revolving Capital Fund; CFDA No. 14.228; Grant Period: Year Ended June 30, 2017. U.S. Department of Commerce Sudden and Sever Economic Dislocation - Adjustment Revolving Loan Fund; CFDA No. 11.307; Grant No. 08-59-02912.01; Grant Period: Year Ended June 30, 2017. Criteria - The Commission is required to follow the Governmental Accounting Standards Board (GASB) in matters of accounting and reporting. GASB pronouncements require that assets of the Commission be reported at net realizable value. Condition - The Commission failed to recognize recoveries of doubtful accounts amounting to $1,826,707 in its internal financial statements prior to audit adjustment. Cause - Failure of the Commission's management to recognize recoveries of doubtful accounts of federal program loans. Effect - The Commission's failure to recognize recoveries of doubtful accounts of federal program loans caused interim financial statements to understate revenues and loan receivables. Recommendation - We recommend that the Commission recognize recoveries of doubtful accounts of loans in its federal loan programs and adjust its interim financial statements accordingly.

Procurement and Contract Requirements Criteria - During a review by the Compliance and Monitoring Department of the Office of Community Development ("C&M"), C&M identified multiple areas within the procurement process for the professional audit services provided by Bourgeois Bennett, L.L.C. that did not consistently follow applicable federal law and OCD policy as established in the Administrative Manual. The Commission explained that the relationship with Bourgeois Bennett, L.L.C. has been in existence since at least 1986 and has continued based on the high level of audit services provided. It was further explained that the method of procurement used was in compliance with state requirements at that time which did not require quotes or bids for professional services. Condition - C&M noted that the Commission has requested payment totaling $20,800 for the audit services provided by Bourgeois Bennett, L.L.C. for its Restore Louisiana Small Business Recovery Program project. Specifically, the following issues were noted during the review: a. Insufficient Documentation - There was insufficient evidence in the files to conclude that the Commission conducted a formal procurement process following federal guidelines before utilizing the professional audit services provided by Bourgeois Bennett, L.L.C. In addition, C&M was unable to corroborate that this procurement was conducted using "open and free competition." Cause - According to 2 CFR 200.320 and Section 6, Part 7.0, of the Administrative Manual, SCP must conduct a formal procurement using one of the recommended methods before obtaining any professional services. This formal procurement process must be conducted using "open and free competition" as is required by 2 CFR 200.319. b. Cost Analysis - The procurement and contract files for Bourgeois Bennett, L.L.C. did not include evidence that a cost analysis was performed. As stated in 24 CFR 85.36(f)(l), grantees must perform a cost analysis in connection with every procurement action, including contract modifications. c. CDBG Compliance Provisions - The procurement and contract files reviewed for Bourgeois Bennett, L.L.C. did not include the required CDBG Compliance Provisions within the contract. As stated in 2 CFR 200.326, and Section 6, Part 16, of the Administrative Manual, a grantee's contracts must include applicable provisions. Effect - Due to the lack of sufficient documentation to evidence formal procurement actions, C&M has determined that the funds paid to Bourgeois Bennett, L.L.C. for audit services are ineligible for CDBG reimbursement. SCP must remit $20,800 for audit services to OCD. Recommendation - We recommend that the Commission obtain competitive bids for audit in accordance with 2 CFR 200.320 and Section 6, Part 7.0, of the Administrative Manual. Views of Responsible Officials - The Commission will obtain competitive bids for the audit of the Federal Programs.

Budget Variance Criteria - In accordance with R.S. 39:1311, the governing authority must adopt a budget amendment if there is a 5% or greater variance in the actual fund balance at the beginning of the year. Condition - The Commission did not adopt a budget amendment for the 5% overage in expenditures for the fiscal year ended June 30, 2019. Cause - The Commission failed to amend its adopted budget. Effect - The Commission has not complied with state budget laws. Recommendation - We recommend that the Commission adopt budget amendments for 5% overage in expenditures. Views of Responsible Officials - The Commission will adopt a budget amendment each year going forward when there is a 5% or greater shortage in revenue or a 5% or greater overage in expenditures or if there is a 5% or greater variance in the actual fund balance at the beginning of the year.

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