ST A T E O F L O U ISIA N A L E G ISL A T IV E A U D IT O R

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1 ST A T E O F L O U ISIA N A L E G ISL A T IV E A U D IT O R D epartm entof T ransportation and D evelopm ent- C rescentc ity C onnection D ivision Baton Rouge,Louisiana M ay 23,2001 D anielg.k yle,p h.d.,c P A,C F E L egislafive A uditor

2 LE G ISL A T IV E A U D IT A D V ISO R Y C O U N C IL M E M BE R S R epresentative E dw in R.M urray,c hairm an Senator J."T om " Schedler,V ice C hairm an Senator R obertj.barham Senator Foster L.C am pbell,jr. Senator Lynn B.D ean Senator W illie L.M ount R epresentative R ick Farrar R epresentative V ictor T.Stelly R epresentative T.T aylor Tow nsend R epresentative W arren J.T riehe,jr. L E G ISL A T IV E A U D IT O R D anielg.k yle,ph.d.,c PA,C FE D IR EC T O R O F IN V E STIG A T IV E A U D IT D arylg.purpcra,c PA,C FE Underthe provisions ofstate law,this reportis a public docum ent. A copy ofthis reporthas been subm itted to the Governor,to the Attorney G eneral,and to other public officials as required by state law. A copy ofthis report has been m ade available forpublic inspection atthe Baton Rouge ofice ofthe Legislative Auditor and atthe office ofthe parish clerk ofcourt. This docum entis produced by the Legislative Auditor,State of Louisiana,Post O fice Box 94397, Baton Rouge, Louisiana in accordance with Louisiana Revised Statute 24:513. Forty-two copies of this public docum ent were produced atan approxim ate costof$72. This materialwas produced in accordance w ith the standards for state agencies established pursuantto R.S. 43:31. This report is available on the Legislative A uditor's W eb site at In com pliance w ith the A m ericans W ith D isabilities Act, if you need special assistance relative to this docum ent,orany docum ents ofthe Legislative A uditor, please contactw ayne "Skip"Irw in,d irectorofadm inistration,at225/

3 D epartm ent of T ransportation and D evelopm ent - C rescent C ity C onnection D ivision M ay 23,2001 Investigative A udit O fi ce of the L egislative A uditor State of L ouisiana D anielg.k yle,ph.d.,c PA,C FE L egislative A uditor

4 T able of C ontents Page Executive Sum m ary B ackground and M ethodology Findingsand Recom m endations TollFees Taken forpersonalu se FormerEm ployeespaid foro vertim e H ours N otw orked A ltachm ent]-m anagcm ent'sresponse A ttachm entii-legalprovisions

5 )ANII!I,O.KYI,E,I'll.D,CPA,CFE I,EGISLA'IIVI~AuI)n OR O FFICE OF LEG ISLA TIV E A U D ITO R STATE OF LOU ISIAN A BA TON ROU G E,LOU ISIAN A M ay 23, N ORqtl1IIIRD S]'RIiI!I POST OFFICF.BOX TEI.EPIIONE:(225) FACSIM ILE: (225) D R.K A M K.M O V A SSA G H I,SE C R E TA R Y D EPA R TM ENT O F TR A N SPO R TA TIO N A N D D EV ELO PM EN T -C R ESC EN T C ITY C O N N EC TIO N D IV ISIO N B aton R ouge,louisiana Transm itted herew ith is ourinvestigative auditreporton the D epartm entof Transportation and Developm ent-crescentcity Connection Division (CCCD).Ourexamination wasconducted il accordance w ith Title 24 of the Louisiana R evised Statutes and w as perform ed to determ ine the propriety of cerlain allegations received by this office. This report presents our findings and recom m endations, as w ell as the response of the departm ent'sm anagem ent.copies of this reporthave been delivered to the H onorable H arry F. C onnick,sr.,d istricta ttorn ey of O rleans Parish,and others as required by state law. G FC :SLC :D G P:dl Legislative A uditor

6 E xecutive Sum m ary Investigative A uditr eport D epartm entof Transportation and D evelopm ent- C rescentc ity C onnection D ivision The follow ing sum m arizesthe findingsand recom m endationsasw ellasm anagem ent's response that resulted from this investigation. D etailed inform ation relating to the findings and recom m endationsm ay be found atthe page num berindicated. M anagem ent'sresponse m ay be found ata ttachm enti. T ollfeest aken for PersonalU se Finding: (Page5) From Septem ber 1999 to M ay 2000, revenues received by CrescentCity Connection Division (CCCD)from bridge tolls and tag store sales totaling $161,972 w ere not deposited. M s.latressa Conerly, M s. Lisa M otley, and M s. R ashaw n W atkins, form er CCCD em ployees in charge of counting revenues,adm itted taking portionsof thism oney fortheirow n personaluse. M s.conerly and M s.m otley furtheradm itted to falsifying accounting recordsto concealthe m issing am ounts. R eeom m endation: M anagem ent's R esponse: W e recom m end thatm anagem entof CC CD im plem entpolicies and proceduresto ensure thatallfundscollected by CCCD arc properly accounted for,recorded,and deposited. M anagem ent should also ensure that adequate supervision is provided throughoutthisprocessto include (1)requiring bridge police officers to observe the counting of revenues on a daily basis; (2)reviewing countroom surv eillance videoson a regularbasis; and (3)m aintaining countroom surveillance videosforaperiod of three years, W e furtherrecom m end thatthe O rleans Parish D istricta ttorn ey review this inform ation and take appropriate legalaction,to include seeking restitution. W e concurw ith the finding of theft by three form er em ployees of CCCD. CCCD has in place com prehensive policies and procedures to ensure that all funds collected are properly accounted for,recorded,and deposited.

7 CrescentCity Connection D ivision Form er E m ployees Paid for O vertim e H oursn otw orked (Page8) Finding R ecom m endation: M anagem ent'sr esponse: From N ovem ber 1998 to February 2000, former CCCD em ployees M s.lisa M otley and M s.latressa Conerly w ere paid $5,368 and $946,respectively,forovertim e hoursthatthey did notw ork. B oth M s.m otley and M s.conerly adm itted 1o receiving overtim e pay thatthey w ere notauthorized orentitled to receive. M s.m otley,the payrollclerk during this period, added thatshe entered the unauthorized overtim e hoursinto the payrollsystem W e recom m end thatm anagem entof CCCD and the D epartm ent of Transportation and Development(DOTD)combineeffortsto im plem ent policies and procedures to ensure the accuracy of CCCD 's em ployee payr oll transm itted to D OTD. These procedures should require reconciliation of handw ritten and com puterized tim e sheets. W e further recom m end that the D istricta ttorn ey of O rleansparish review thisinform ation and take appropriate legalaction,to include seeking restitution. W e concurw ith the finding thattw o form er CCCD em ployees w ere paid for overtim e hours thatthey did notw ork. CCCD and D O TD w ill com bine efforts to im prove procedures to ensure the accuracy of C CCD 's em ployee payrolltransm itted to D O TD.

8 B ackground and M ethodology The Crescent City Connection Division (CCCD), form erly the M ississippi P,iver Bridge A uthority, operates as a division w ithin the Louisiana D epartm ent of Transportation and Developm ent(dotd).m anagem entof CCCD is responsible for the daily operation of the CrescentC ity Connection. CCCD spans the M ississippiriver,connecting the w estbank of G reater N ew O rleans to the eastbank. Currently,tollsare charged forthe w estbank to eastbank crossing ata rate of $.50 per vehicle axle (norm ally,$1 fora passengervehicle)and $.40 pervehicle axle using tolltags purchased from CCCD 'stag store.in addition,cccd operatesferriesthatcollect$1pervehicle to crossthe river. O n April 14,2000,D O TD notified CCCD 's m anagem ent of discrepancies betw een CCCD 's reported revenue and actualbank deposits. O n June 15,2000,CCCD requested thatthe stale police conductan investigation of the m issing revenue. On O ctober 31,2000,the Legislative Auditorreceived allegations from CCCD 's m anagem ent'thalrevenues w ere taken from CCCD and thatseveralform erem ployeesw ere involved.w e conducted ourinvestigation to delennine lhe extentof these im proprieties atc C C D. Tile procedures performed during this investigative audit w ere designed to determ ine the propriety of these allegations and consisted of (1) interviewing employees and officials of CCCD;(2)interviewing otherpersons as appropriate;(3)exam ining selected documenlsand records;(4)m aking inquiries and performing tests to the extentwe considered necessary to achieve ourpurpose;and (5)reviewing applicable state laws. W e acknow ledge the assistance provided in this investigation by the Louisiana State Police The results of our investigative auditare the findings and recom m endalions herein

9 CrescentCity Connection Division

10 F indings and R ecom m endations T O L L FE E S T A K EN FO R PE R SO N A L U SE From Septem ber 1999 through M ay 2000, revenues received by the C rescent C ity Connection Division (CCCD)from bridge tollsand tag store salestotaling $161,972 were not deposited. M s. Latressa Conerly, M s. Lisa M otley, and M s. R ashaw n W atkins, form er C C C D em ployees in charge of counting revenues,adm itted taking portions of this m oney for their ow n personal use. M s. Conerly and M s. M otley further adm itted to falsifying accounting recordsto concealthe m issing am ounts. CCCD (tollbridge)crosses the M ississippiriver to connectthe westbank ofgreater New O rleans to the eastbank. V ehicles crossing the bridge from the w estbank to eastbank are charged a tollrate of$.50 pervehicle axle (normally,$1fora passengervehicle)and $.40 per vehicle axle using tolltags purchased from C C C D 's tag store. Tolls are collected by CCC D 's tolloperators and placed in a vaultat CCCD on the date of collection. The next business day accounting personnel (counters) verify total revenue collected and prepare bank deposits. D eposits are transported to the bank by a bridge police officer. M s. Conerly, M s. M otley, and M s. W atkins w ere all em ployed by CCCD as counters. M r.d em ond Sam pson,an acquaintance of M s.w atkins,stated thatm s.w atkinstold him of a plan to take m oney from CCCD. H e explained thatm s.w atkins'plan w asto hide the bags of m oney containing large denom inations on herperson in order to rem ove the m oney from the countroom.m r.sam pson stated thaton one occasion he saw a clearplastic bag fullof m oney in M s.w atkins'car.h e added thathe later w itnessed M s.w atkins open the bag and splitthe contentsw ith M s.conerly and M s.m otley in the parking lotof a nearby restaurant. C C C D 's records indicate thatfrom Septem ber 1999 to M ay 2000,there w ere 16 occasions thata portion of cash revenues from bridge tollstotaling $158,147 w as notdeposited. In addition,one tag store deposit totaling $3,825 w as not deposited. Therefore, revenue totaling $161,972 w as notdeposited. A llthree em ployees w ere not consistently em ployed during the period covered in our exam ination. T he follow ing table indicates the d,'ltes of em ploym entfor the three em ployeesin relation to the m issing deposits.

11 CrescenlCity Connection D ivision Tim e Period C ounters Sept.23,1999,to D ec.1,1999 D ec.6,1999,to M ar.8,2000 M ay 15,2000 C onerly,m otley,w atkins Conerly,M otley Conerly $64,232 87,888 9,852 Total $161,972 Septem ber 1999 to D ecem ber 1999 From Septem ber 23, 1999, to D ecem ber 1, 1999, w hile M s. Conerly, M s. M otley, and M s.w atkinsserved ascounters,seven depositstotaling $64,232 w ere prepared butnotdeposited into CCCD 's bank account. D uring this period,w e noted six occasions in w hich docum ents appeared to have been falsified by M s.w atkinsor M s.conerly in an attem ptto concealm issing funds. M s.w alkinsresigned on D ecem ber 1,1999,aftercounting revenues from priordays. It should be noted that$9,716 w asm issing from thisday'scount. M s.conerly and M s.m otley both stated thatm s.w atkins w as taking bags of m oney during this period of tim e. M s. Conerly explained that, w hile in the count room, M s.w atkins w ould w alk into the vault to hide bags of m oney under her clothing. M s.conerly explained thatm s.w atkins would give her (Conerly) and M s.m otley $2,500 to $3,500 a piece from each bag. M s. Conerly further stated that on these occasions,m s.w atkinsw ould handle the paperw ork in orderto concealthe shortages. M s.m otley added thatshe helped M s.w atkinsm anipulate the paperw ork. She explained thatshe received $3,000 cash from M s.w atkins on tw o differentoccasions,once w hen M s.w atkinsleft the m oney in herpurse and once m ore in a restaurantparking lotw hen she w entto lunch w ith M s.w atkinsand M s.conerly. W e w ere unable to speak w ith M s.w atkins;how ever,she explained to state police detectives thatshe received only $500 on one occasion afterm s.conerly and M s.m otley splitthe contents of a depositbag. D ec em ber 1999 to M arch 2000 From D ecem ber 6, 1999, to M arch 8, 2000, w hile M s.conerly and M s.m otley served as counters, nine deposits totaling $87,888 w ere prepared but not deposited. W e noted five occasionsin w hich docum entsappeared to have been falsified by M s.conerly orm s.m otley in an attem ptto concealthese m issing funds. M s. C onerly stated that she and M s. M otley both participated in taking m oney and falsifying docum ents to concealthe shortages. M s.conerly added thatthe m oney w as splitequally betw een herself and M s.m otley.

12 ]qndings and Recom n~endalions M ay 2000 M s.m otley stated thatshe helped M s.conerly m anipulate the paperwork and thatshe received only $23,000 of thism oney. On M ay 15,2000,cash from bridge tollrevenue totaling $9,852 w as notdeposited. CCCD surveillance video show sm s.conerly inside the countroom placing a fulldepositbag onto a cart containing em ply toll collector bags and subsequently rolling the carl out of the room. M s.conerly resigned laterthaiday. Sum m ary M s.conerly adm itted to taking the m oney and falsifying reportsto coverup the shortage Based on statem ents m ade by M s.conerly,itappears as though she received $67,383 of this m oney; M s. M otley received $61,357; and M s. W atkins received $33,232. M s. M otley m aintainsthatshe only received $3,000 from M s.w atkinson two differentoccasionsand cash totaling $23,000 from M s.conerly.m s.w atkinsstated thatshe received $500 of thism oney. D ate A m ount A m ountto A m ountto M issing M s.conerly M s.m otley A m ountto M s.w alkins 09/23/ /26/ /30/ /18/ /19/ /24/ /30/ /06/ /23/ /04/ /l5/ /03/ /06/ /13/2000 $378 9,617 10,345 10,878 11,716 11,582 9,716 11,195 10,028 3,825 22,080 21,503 19,257 9,852 $2,500 3,000 3,000 3,500 3,500 5,598 5, $2,500 3,000 3,000 3,500 3,500 5,597 5,014 3,825 11,040 10,752 9,629 $378 4,617 4,345 4,878 4,716 4,582 9,716 Total $161,972 $67,383 $61,357 $33,232 The am ountsincluded in thistable are based on interview sof w itnessesand additional w ork perform ed by ouroffice.

13 CrescentCity Connection D ivision These actionsindicate thatone orm ore of the follow ing law sm ay have been violated R.S.14:26,"Conspiracy" R.S.14:67,"Theft" R.S.14:133,"Filing False Public R ecords R.S.14:134,"M alfeasance in O ffice" Though the actions of the parties listed in this reportappearto be w ithin the scope of the law s listed above,theactualdetemlination asto whetherindividualsaresubjectto formalchargeisat the discretion of the districtattorn ey. W e recom m end thatm anagem entof C CCD im plem entpoliciesand proceduresto ensure thatall funds collected by C C C D are properly accounted for, recorded, and deposited. M anagem ent should also ensure that adequate supervision is provided throughout this process to include (l)requiring bridge police officers to observ e the counting of revenues on a daily basis; (2)reviewing countroom surv eillance videoson aregularbasis;and (3)m aintaining countroom surveillance videos fora period of three years. W e furtherrecom m end thatthe O rleans Parish D istricta ttorn ey review this inform ation and take appropriate legalaction,to include seeking restitution. FO R M E R E M PL O Y E E S PA ID FO R O V E R T IM E H O U R S N O T W O R K E D From N ovem ber 1998 to February 2000,form er C C C D em ployees M s.lisa M otley and M s.latressa Conerly were paid $5,368 and $946,respectively,for overtim e hours that they did notw ork. Both M s.m otley and M s.conerly adm itted to receiving overtim e pay thatthey w ere notauthorized or entitled to receive. M s.m otley,the payrollclerk during this period, added lhat she entered the unauthorized overtim e hours into the payroll system. O vertim e hours w orked by C CCD em ployees m ustbe pre-approved by the director of CCCD. Each pay period,c CCD em ployees subm itan accounting of theirtim e w orked to a payrollclerk w ho processesthe em ployee tim e sheets.once processed,tim e sheetsare audited and signed by the em ployee, the em ployee's superv isor, and the director. Approved tim e sheets are electronically transmitted to the Department of Transportation and Developm ent's (DOTD) aeeounting departm entto create payr ollchecksthatare eitherprinted orelectronically deposited 1o the em ployee's bank account. Forthe pastseveralyears,m s.m otley hasbeen CCCD 'spayrollclerk responsible forpreparing and transm itting payr ollto D OTD. H eraccessto the payr ollsystem allow ed herto add ordelete regularand overtim e hours to the payr oll. M s.n adine Jones,accounting superv isor,staled that

14 Findingsand Recom m endations she noticed unusualam ountsof overtim e included in M s.m otley'sand M s.conerly'spayrollin February She explained that the overtim e w as unusualbecause none of her em ployees earn ed overtim e in February M s.jones explained thatshe researched payrollback tw o years and found thatm s.m orley's and M s.conerly's tim e sheets did notindicate the overtim c hours,butthe com putersystem did. D O TD com puterrecordsindicate thatboth M s.m otley and M s.conerly w ere paid for overtim e;how ever,theirhandw ritten tim e sheets thatw ere signed and approved by theirsupervisordid notindicate any overtim e w asw orked. M s.m otley O n 21 occasions from N ovem ber 1998 to January 2000,M s.m otley prepared and signed her tim e sheets indicating 21.5 overtim e hours. A fterthese tim e sheetsw ere approved,m s.m otley entered 390 additionalovertim e hoursinto the com putersystem resulting in excessive paym ents totaling $5,368. W e w ere unable to find docum entation indicating that the additional 390 overlim e hoursw ere approved orw orked. M s.m otley adm itted thatshe keyed in unauthorized hoursand received overtim e pay thatshe w asnotentitled to receive. N um berof O ccasions Pay Period Ending D ate O vertim e H ours Certified on Tim e Sheet O vertim e H ours Coded to Payroll U nauthorized O vertim e ttours U nauthorized O vertim e Paid /01/ /29/ /10/ /24/ /21/ /07/ /21/ /30/ /27/ /11/ /25/ /08/ /22/ /05/ /19/ /03/ /17/ /14/ /12/ /26/ /23/ $ Total $5,368.57

15 CrescentCity Connection D ivision M s.c onerly From D ecem ber 1998 to February 2000,M sconerly w aspaid $946 for93 overtim e hoursthat she did notw ork. O n eightoccasions during this period,m s.conerly signed her tim e sheets certifying thatshe w orked 10 overtim e hours,though 103 hours of overtim e w asentered into the com putersystem. W e w ere unable to find any docum entation indicating lhalthe additional93 hours of overtim e w ere approved or w orked. N um berof O ccasions Pay Period Ending D ate O vertim e H ours Certified on Tim e Sheet O vertim e H ours Coded to Payroll U nauthorized O vertim e H ours U nauthorized O vertim e Paid 12/27/ /07/ /03/ /14/ /12/ /26/ /23/ /20/ $ Total $ M s.c onerly adm itted thatshe received overtim e pay for tim e she did notw ork. She stated that she never asked M s.m otley to give her extra overtim e hours and thatthe firstcouple of tim es she received the extra pay she w asnotaw are of it. These actionsindicate thatone orm ore of the follow ing law sm ay have been violated R.S.14:134,"M alfeasance in O fi ce" R.S.14:138,"PayrollFraud Though the actions of the parties listed in thisreport appearto be w ithin the scope of ttle law s listed above,theactualdetermination asto whetherindividualsaresubjeetto formalchargeisat the discretion of the districtattorn ey. W e recom m end thatm anagem entof CCCD and D O TD com bine efforts to im plem entpolicies and procedures to ensure the accuracy of CC CD 's em ployee payr oll transm itted to D O TD. These proceduresshould require reconciliation of handw ritten and com puterized tim e sheets.w e furlherrecom m end thatthe D istrictattorn ey of O rleansparish review thisinform ation and take appropriate legalaction,to include seeking restitution. 10

16 A ttachm enti M anagem ent's R esponse

17 STAT E O F LO U ISIA N A D EPA RTM ENT O F TRANSPO RTATIO N A ND D EV ELO PM ENT P.O.Box Baton Rouge,Louisiana M.J.'M IKE"FOSTER,JR GOVERNOR M ay 10,2001 KAM K. M OVASSAGHI SECRETARY D r.d anielg.k yle,cpa,cfe Legislative A uditor State of Louisiana PostO ffice Box Baton Rouge,Louisiana D ear D r.k yle Thisisin reply to the findingsand recom m endationscontained in the Investigative A udit R eport,concerning the CrescentCity Connection D ivision. W e concur w ith the finding of theftby three form er em ployees of the Crescent City Connection D ivision. The Crescent City Connection D ivision has in place com prehensive policies and proceduresto ensure thatallfundscollected are properly accounted for,recorded and deposited. The overalleffectiveness of these policies and procedures w as validated in that,the theft w as discovered by C C C D m anagem ent. M maagem ent im m ed iately conducted an intern al investigation. The three form erem ployees involved w ere identified and evidence obtained by CCCD m anagem ent. The evidence w asthen turned overto the Louisiana State Police and itw as found sufficientto resultin arrests. D uring the course of our investigation,severalw eaknesses in oursystem w ere revealed. These w eaknesseshave been corrected.a dditionally,the O ffice of Risk M anagem enthasreim bursed the CrescentCity Connection D ivision for allrevenue taken and the Louisiana State Police has been turned over its investigation to the Orleans Parish D istricta ttorn ey. Y oursubsequentinvestigation largely confirm ed ourintern alfindingsand w e appreciate any specific recom m endations you m ay have to strengthen our system. W e also concur w ith the finding that tw o form er Crescent City Con ection I)ivision (CCCD)employeeswere paid forovertim e hoursthatthey did notwork. A gain,d OTD and CCCD m anagem entdiscovered the inconsistencies and initiated an intern alinvestigation. The em ployeesw ere subsequently rem oved. Y ourreportconfirmed our im em alfindings. The CrescentCity Con ection D ivision and the D epartm entof Transportation and D evelopm entw illcom bine efforts to im prove proceduresto ensure the accuracy of CCCD 's em ployee payrolltransm itted to D O TD. 11 AN EQUAL OPPORTUNtTY EM PLOYER A DRUG-FR EE W ORKPLACE

18 M r.d anielg.k yle M ay Page 2 If w e can provide any additional inform ation,please contact M r.a lan J.LeV asseur (504) orm e. Sincerely M r.john Basilica M r.w illiam Tem ple M r.g ordon N elson Secretary

19 A ttachm entii L egalp rovisions

20 L egalprovisions The follow ing legalcitationsare referred to in the Findingsand R ecom m endationssection of this report: R.S.14:26 (A)providesthatcrim inalconspiracy isthe agreem entorcombination of two of m ore persons for the specific purpose of com m itting any crim e,provided that an agreem entorcom bination to com m ita crim e shallnotam ountto a crim inalconspiracy unless,in addition to such agreem entorcom bination,one orm ore of such partiesdoesan actin furtherance oftheobjectoftheagreementorcombination. R.S.14:67 provides,in part,thattheftis the m isappropriation ortaking of anything of value w hich belongs to another, either w ithout the consent of the other to the m isappropriation or taking, or by m eans of fraudulent conduct, practices, or representations.

21 14

The,recommendation in this report represents,in ourjudgment,thatmostlikely to bring about

The,recommendation in this report represents,in ourjudgment,thatmostlikely to bring about LEGISLATIVE A UDITOR LO UISIA NA SYSTEM IC INITIATIVES PRO G RA M C O U NC IL STATE O F LO UISIA NA M anagem entletter,dated February 19,1997 Page 2 M anagem entattributes the noncom pliance to insta lation