SHREVEPORT, LA (KSLA) - Despite the city of Shreveport getting a "D" letter grade in the Louisiana Legislative Audit's most recent report, the city is doing a better job financially than it did last year, according to state auditors.
The audit cited "fraud" as the reason for giving Shreveport such a low grade. According to the report, the city was able to internally detect the theft of nearly $9,000 from the Convention Center Hotel (Shreveport Hilton Hotel).
The city found misappropriated funds of $8,850 and reported the suspect, an "Accounts Payable employee" to the Shreveport Police Department. The employee was fired and charged with theft.
However, auditors gave the city a "D" grade because of the fraud.
"A 'D' means a fraud was committed," said Brad Cryer, director of local government for the Louisiana Legislative Auditor's Office.
Auditors recommended the city install more financial controls to prevent and deter theft at the hotel, which the city has agreed to.
Cryer said the audit was more positive than the previous year's audit. He explained the audit only found two significant issues this year compared to eight in last year's audit.
During the course of 2016, the city also incurred more debt to finance capital improvement projects, such as a sewer project.
The audit shows Shreveport incurred an additional $83 million in debt. However, the city can still incur another $345 million in debt before it is outside the parameters of state law.
Cryer also said auditors will watch for any pattern that could develop long-term, as it would do in any city.
According to the audit, the city's "fund balance" dropped by $48 million, from $216 million at the beginning of 2016 to $168 million at year's end. (See page 27 of audit)
Cryer said, "a single year does not indicate a pattern."
While the audit states, "The deficit does not mean that the City has insufficient resources to pay bills for the next year; however, it does show that on a long-term basis, the City has commitments beyond which it has current resources to fund its obligations. The largest of these commitments, besides the general obligation bonds, are certificates of indebtedness which were issued to fund state pension obligations, notes issued for remodeling of the Independence Stadium and the recognition of net pension liability, and other postemployment benefit obligations."
Cryer stated that auditors factor in long-term expenses for bonds, but it does not factor in future collections (deferred inflow).
Cryer said in the short-term, the city is paying its bills on time. At the end of 2016, the city still had $1.6 million left, meaning the city was in the green.
Cryer said it's generally more useful to look at short-term data to determine a city's financial condition.
The view the entire audit click here.