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 ShreveportC ity M arshal Shreveport,Louisiana July 19,2000 Investigative A udit D anielg.k yle,ph.d.,c PA,C FE L egislative A uditor

2 LEG ISLATIV E A U D IT A D V ISO R Y CO U N C IL M EM BER S R epresentative Edw in R.M urray,c hairm an Senator J."T om " Sehedler,V iee C hairm an Senator R obertj.b arham 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 T ow nsend R epresentative W arren J.T riehe,jr. LE G 1SLA T IV E A U D IT O R D anielg.k yle,ph.d.,cpa,c FE D IR E C TO R O F IN V E STIG A TIV E A U D IT A llen F.B row n,c PA,C FE Underthe provisions ofstate law,this reportis a public docum ent. A copy ofthis report has been subm itted to the G overnor,to the A torney G eneral,and to other public ofi cials as required by state law. A copy ofthis report has been m ade available forpublic inspection atthe Baton Rouge ofi ce ofthe Legislative Auditor and atthe office ofthe parish clerk ofcourt. This docum entis produced by the Legislative Auditor,State oflouisiana,post O fice Box 94397, Baton Rouge, Louisiana in accordance with Louisiana Revised Statute 24:513. Forty-six copies ofthis public docum entwere produced atan approximate costof$ This materiatwas produced in accordance w ith the standards forstate agencies established pursuantto R.S. 43:31. This docum ent is available on the Legislative Auditor's W eb site at w ww.lla.state.la.us. In com pliance w ith the Am ericans W ith Disabilities Act, if you need specia assistance relative to this docum ent,orany docum ents ofthe Legislative Auditor please contactw ayne "Skip"Irw in,d irectorofadm inistration,at225/

3 Shreveport C ity M arshal July 19,2000 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 Background and M ethodology 1 3 Finding and Recom m endations City FundsN otd eposited Attachm enti-m anagem ent'sresponse A ttachm ent11-legalprovisions

5 Thispage isintentionally blank.

6 I)ANIEL G.KYLE,P]I.D.,CPA,CI:I I.I~GISLATIVE AUDITOR OFFICE OF LEG ISLA TIV E A UD ITO R STATE OF LOUISIAN A BA TON RO U G E,LO UISIAN A July 19, NO RTIITH IRD s'rree~i POST O FFICE BOX TELEI'HONE:(225) FACSIM ILE: (225) T IlE H O N O R A BLE JIM M Y D O V E, SH R EV EPO R T C ITY M A R SH A L C ITY O F SH REV EPO R T Shreveport,Louisiana Transm itted herew ith is our investigative report on the Shreveport City M arshal. O ur exam ination w as conducted in accordan ce w ith Title 24 of the Louisiana Revised Statutes and w asperform ed to determ ine the propriety of certain allegationsreceived by thisofi ce. This reportpresents ourfinding an d recom m endations,as w ellas your response. Copies of this reporthave been delivered to the Shreveport City M arshal;the H onorable PaulJ.Cannouche, D istrictattorney forthe FirstJudicialD istrictof Louisiana;and othersasrequired by stale law, A FB :EK L:JI,M :dl Legislative A uditor

7 E xecutive Sum m ary Investigative A uditr eport ShreveportC ity M arshal The follow ing sum m arizesthe finding and recom m endationsasw ellasm an agem ent'sresponse thatresulted from thisinvestigation. D etailed inform ation relating to the finding and recom m endationsm ay be found atthe page num berindicated. M anagem ent's response m ay be found at A ttachm enti. C ily FundsN otd eposited Finding: R ecom m endation M anagem ent'sr esponse: (Page5) D uring a 12-m onth period,m s.stacy A dam s,form er D eputy M ar shal for the Shreveport City M arshal, appears to have received $44,306, which was not deposited into an y of the M ar shal'sbank accounts. W e recom m end that m anagem ent for the Shreveport City M ar shalim plem entpoliciesand proceduresto ensure thatfunds collected are accounted for properly. Furth erm ore, w e recom m end that m anagem ent determ ine w hether existing fidelity coverage is adequate, and if not, provide adequate fidelity bond coverage for em ployees w ho handle or have access to public funds. W e also recom m end thatthe D istrict A ttorney for the FirstJudicialD istrict of L ouisim~a review this inform ation and take appropriate legalaction,to include seeking restitution. M anagem entconcursw ith the finding and recom m endations

8 ShreveportCity M arshal

9 B ackground and M ethodology The ShreveportCity M arshalisthe executive officerof the ShreveportCity Courtw ho hasthe pow erof a sherif in the execution of the com 't's orders. The M arshaldeterm inesthe levelof personneland equipm entrequired by his ofi ce and requests these resources from the City of Shreveport. The O fi ce of the Legislative A uditorreceived allegationsthatnotallfinesand cash bondsw ere deposited into the accountsof the M ar shal'soffice. The procedures perform ed during this investigative audit consisted of (1) interviewing employeesmad officialsof the M arshal'soffice;(2)interviewing otherpersonsasappropriate; (3)exam ining selected records of the M arshal's office; (4) perform ing observations and analyticaltests;and (5)reviewing applicable state an d federallawsand regulations. The resultof ourinvestigation isthe finding an d recom m endationsherein

10 ShreveportCity M arshal

11 F inding and R ecom m endations C IT Y FU N D S N O T D E PO SIT E D D uring a 12-m onth period,m s.stacy A dam s,form er D eputy M arshalfor the Shreveport City M arshal,appearsto have received $44,306,which wasnotdeposited into any ofthe M arshal'sbank accounts. M s,stacy Adamsworked asa deputy m arshalforthe ShreveportCity M arshal(m arshal)from April19,1993,untilherresignation on M arch 21,2000. W e exam ined recordsforthe period A pril1,1999,through M arch M s.a dam s'duties during this period w ere to accountfor and depositcash bond collections. She w asalso responsible forposting cash fine collectionsto the appropriate accountsan d determ ining tlle mnountsto be deposited. D uring normalbusiness hours,m ostbond and fine collections are m ade atthe M ar shal's office. The CentralRecords Departmentof theshreveportcity PoliceDepartment(CentralRecords)collectsfinean d bond m oney after norm al w orking hours an d transfers the m oney to the M ar shal's ofi ce during norm alw orking hours. CentralRecordsplacesm oney collected into an envelope foreach payee, sealsthe envelope,and notes the payee'snam e and am ountcollected on the outside of the sealed envelope.centralrecordsmakesa list(m anifest)ofthe payees'nam es,am ountspaid,and dates paid. From A pril1999 through July 1999 M s.a dam s,alone,obtained the m anifests and envelopes containing cash from Central Records. She returned to the M arshal'soffice and posted the bond fundsto the M arshal's accountand prepared the deposit. In addition,m s.a dam sposted the fine collectionsto the M arshal's account. H ow ever,she did notprepare the depositfor the fine collections. She w ould give the fine collections to Chief D eputy M ary H olbrook. M s.h olbrook w ould then com pare the fine collectionsgiven to herby M s.a darnsto the totalam ount posted. Chief D eputy H olbrook then prepared the depositto the M arshal'saccountbased on the posting and cash provided by M s.a dam s. From A pril 1, 1999,through July 31, 1999,there w ere at least 86 instan ces totaling $20,371 of fines that w ere received from Central Records by M s. Adam s but not deposited to the M ar shal'sbank accounts. On 58 of the 86 occasions,finesof $12,977 w ere notposted to the M arshal'saccountsan d notdeposited into floe M arshal'sg eneral Fund. O n the rem aining 28 occasions,fines of $13,843 w ere received from Central Records by M s.a dam s. M s.a dam s posted and rem itted only $6,449 for deposit resulting in a shortage of $7,394. D uring the sam e period,fourbondstotaling $2,918 were received from CentralRecords by M s.a dam sbutnotposted ordeposited to the M ar shal'sbond A ccoun t.

12 ShreveportCity M arshal From A ugust1999 Through M arch 2000 O n tw o occasions in A ugust 1999, Shreveport City M arshal Jim m y D ove asked M s.a dam s about m issing funds for which she w as responsible. In both instan ces, M s.a dam stold M arshald ove thatshe had located the m issing funds.h ow ever,thisw as untrue. O n one of these occasions,m s.a dam s borrow ed the m oney from M s.k aren D ean,a co-w orker,to replace the m issing funds. O n the otheroccasion,she replaced the m issing fnnds w ith a personalcheek. A sa resultof the tw o incidentsm entioned above,new procedures w ere im plem ented for the transferof m oney from CentralRecords. M s.a dam s no longer picked up fine and bond envelopes from CentralRecords unless she was accom panied by another person from the M arshal's O ffice,usually M s.leesa G om ez,d eputy M arshal. Though M s.a dam sno longercarried envelopescontaining cash from CentralRecordsto the M ar shal's O fi ce by herself,she stillhad controlover the prepar ation of the depositof bond collections. M s. A dam s also retained control of com puter postings of fine collections and the am ounts rem itted to M s.h olbrook for deposit. From A ugust 1999 until M s.a dam s' departure in M ar ch 2000,there w ere at least 77 occasions totaling $19,963 w here m oney w as received from Central Records but not deposited to the M arshal's ban k accounts. On 65 of the 77 occasions,fine collectionsof $15,509 were notposted to th e M ar shal's accounts by M s.a dam sand notdeposited into the M ar shal's G eneralfund. O n the other ]loccasions,fines of $5,804 were received from CentralRecords,butM s.a dam sposted and rem itted only $1,889 resulting in a shortage of $3,915. On tile rem aining occasion,a $539 cash bond was received from CentralRecords by M s.a dam sbutnotposted ordeposited to the M ar shal'scash bond account. Beginning in January 2000, the M arshal assigned account updating and deposit responsibilities for bond and fine receipts to other em ployees in his ofi ce. The last instan ce of m issing m oney thatw e w ere able to docum entoccured on January 4,2000. Furtherm ore,on N ovem ber 10, 1999,M s.a dam s posted bond m oney received am ounting to $2,971 butonly deposited $1,917. M s.h olbrook asked M s.a dam s aboutthe $1,054 thatw as not deposited and instructed her to research the problem. A ccording to M s. ltolbrook, M s.a dam sw asnotable to explain the m issing funds to her. On June 8,2000,representatives of the Legislative A uditorasked M s.a dam saboutthe $1,054 thatw asnotdeposited. M s.a dam s w asagain unable to explain w hathappened to the m issing funds. H ow ever,she stated thatshe w ould nevertake m oney thatcould be so easily detected. M s.a dam s stated thatherparents,fam ily m em bers,an d friendsw ould lomlherm oney w hen the need arose and thus w ould neverhave taken m oney from the M arshal'soffice.

13 Finding and Recom m endations Recordsindicate thatthe M arshal'sofi ce hasa $5,000 Public Ofi cialbond on M r.dove,the M arshal. In addition,m r.tom Cody,R isk M anagerforlhe City of Stu'eveporL informed usthat the City of Shreveporthas a $300,000 public em ployee dishonesty policy on its em ployees. H ow ever,a review of the policy docum entdoesnotshow thatem ployeesof the M ar shal'soffice are covered. These actionsm ay be violationsof the follow ing Louisiana law s R.S.14:67,"Theft R.S.14:68,"U nauthorized U se of a M ovable R.S.14:134,"M alfeasance in O ffice" R.S.42:1461(A),"Obligation Notto M isuse Public Funds" W e recom m end that m anagem ent for the Shreveport City M ar shal im plem ent policies an d procedures Io ensure that funds collected ar e accounted for properly. Furtherm ore, w e recom m end thatm anagem entdeterm ine w hether existing fidelity coverage is adequate,and if not,provide adequate fidelity bond coverage for em ployeesw ho han dle orhave accessto public funds. W e also recom m end thatthe D istricta ttorney forthe FirstJudicialD istrictof Louisiana review thisinformation an d take appropriate legalaction,to include seeking restitution.

14 Shrevepo~ Ci~ M ~shax

15 A ttachm enti M anagem ent's R esponse

17 JIMM Y DOVE SHREVli~POF~ CITY MARSHAL l)r.1)aniclg.k yle,legislative A uditor P.O.B ox Baton R ouge,la R e:investigative A uditr eport ShreveportCity M arshal()fi ce June 2000 A s requested.1am responding to yourfinding and recom m endationsin tl~c above refcrcl3ced i/atlcras follow s: R esponse to Finding 1concurw ith the finding in the report. The instancesof appeared theft are unfortulm le and the lossof fundsreprehensible. R esponse to Jlecom m endations 1) hnplementation ofpoliciesand procedures A snoted irayourfindings,the policiesand procedureshave already been am cndcd in January 2000 to bettercontrolfunds. In addition,furtherrefinem entsw illbe m ade assituationschange. 2) Fidelity Bond Coverage ('urrenlly w e are iracom m unication w ith risk m anagcm entof the City of Shreveportto determ ine the coverage currently iraeffectand consideration of thc costeffectivenessof obtaining outside coverage. 9 CiTY COURT BUILDING ~ 1230"IEXAS AVENUE,ROOM J-6 * SHREVEPORT,LA 71101~ PHONE ~ FAX

18 3) Review by DistrictAttorney M y ofi ce w illm ake available any assistance required by the D istricta ttorney to take appropriate legalaction and seek fullrestitution. lw ould like to thank you foryourprom ptnessafterourrequestforassistance fi'om your ofi ce. The courtesy and professionalism of yourstaf iscom m endable. Should any questionsarise,please contactm e. Jl):sw 10

19 A ttachm entii L egalprovisions

20 L egalprovisions The follow ing legalcitationsare referred to in the Finding and Recom m endationssection of th is report: R.S,14:67 provides,in part,thattheft isthe m isappropriation ortaking of anything of value w hich belongs to another,eitherw ithoutthe consentof the otherto the m isappropriation ortaking,orby m eansof fraudulentconduct,practices,orrepresentations. R.S,14:68 provides,in part,thatunauthorized use of a m ovable isthe intentionaltaking oruse of a m ovable w hich belongsto an other,eitherw ithoutthe other's consent,orby m eans of fraudulentconduct,practices,or representa tions,butw ithoutany intention to deprive the otherof the m ovable perm an ently. R.S.42:1461(A)provides,in part,thatofi cials,whetherelected orappointed,by the act of accepting such office assum e a personalobligation notto m isappropriate,m isapply, convert,m isuse,orotherw ise wrongfully take any funds,property oroth erthing of value belonging to the public entity in which they hold ofi ce. 11

21 12 ShreveportC ity M arshal

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