Authority cleaning house in Fenton
Forgery and theft charges lead to removal of executive director, others
FENTON — Nearly a year after a state investigative audit found the former executive director of the Fenton Housing Authority took $34,105 of authority funds for personal use and wrote more than 50 unauthorized checks including extra payroll checks to herself, other authority members and family members for nonexistent services, an annual audit has found changes are being made.
The audit, which was done by certified public accountant William Daniel McCaskill of Mandeville, just a month after the state released its findings, was made public Monday by the state Legislative Auditor’s Office. It covers the fiscal year ending Dec. 31, 2017.
The 39-page report highlights results of the state’s findings and corrective action taken by the Housing Authority, including the removal of Gwen Jackson as executive director and removal of all former members of the board of commissioner.
Jackson was arrested for forgery and theft charges related to the audit last October, just a month before the state released it’s findings. The case is still pending.
Among its findings, the state said Jackson issued $8,856 in payroll or reimbursement checks to herself and $12,900 to her husband. She admitted that she created fake invoices and endorsed her husband’s signature.
In addition, auditors found Jackson issued $5,562 in payroll checks to other Housing Authority employees with the majority of the checks negotiated by the director. An additional $3,150 was made payable to petty cash, which Jackson admitted she did not use for Housing Authority purposes. One check, totaling $600, was made payable to her cousin for office services.
McCaskill found “entity wide” misappropriations of funds and urged the Housing Authority to use proper internal controls including adequate invoices and delivery documentation to monitor expenses.
McCaskill noted the Housing Authority should seek legal advice to include recovering funds and evaluate overall business operations to provide an adequate internal control system. It should also develop written policies for reviewing, approving and paying invoices to include requiring dual signatures of checks and prohibit signing blank checks and those without adequate documentation or invoices.
A board member who does not sign checks should also review cancelled checks for anything unusual including multiple checks issued to a staff member in the same month and look for forged signatures. The same board member should review supporting documentation for any suspicious item.
Other recommendations including not allowing employees, board members or family members to contract their services with the Housing Authority, ensuring services are necessary before seeking vendors and ensure vendors and professional service provides have a valid, written contract before performing services and ensure payments meet all contractual requirement before payment.
McCaskill also cited the board of commissioners for not exercising proper internal controls in hiring the former executive director which weakened the Housing Authority’s financial position.
The entire board of commissioners has been replaced and the new board has implemented many of the state Legislative Auditors recommendations including segregating duties and receiving training. The board has also contracted with another local housing authority to manage day to day operations.
He was also critical of the board of commissioners’ hiring of the new executive direct, saying it was done without searching or advertising for the position. It also noted, there was no documented selection process used to evaluate potential hires and that the board minutes did not reflect the executive director’s contract was approved by the board; only a board resolution approving the payment of a certain annual salary.
Also at issue is a question if all three of the board member signatures on the executive director’s contract are valid.
The audit also noted that after the executive director began working for the Housing Authority, the bank refused to include her as a signatory on the Housing Authority’s bank checking account citing problems with her background. This should have immediately caused the board to at least provide more intense oversight over the staff member, the auditor wrote.
It is also recommended that the board receive training from the Louisiana Housing Council.