Audit blasts Pearl River’s money management

The hits just keep coming for Pearl River officials.

After a May report from the Louisiana Legislative Auditor’s Office detailed how the town’s mayor, police chief and clerk spent thousands of dollars on personal items, in some cases in order to avoid paying sales tax, a new report out Monday criticized the town for violating state law in budget oversight and property transactions and for poor record-keeping.

Pearl River Mayor James Lavigne failed to notify the Board of Aldermen in writing when the town’s expenditures were going over budget by more than 5 percent so that a budget amendment could be passed, the new audit report says. His failure to notify the board and its failure to pass an amendment resulted in a violation of state law, according to the report, which blamed “management oversight.”

In fact, the town outspent its general fund by 28 percent, its police fund by 20 percent and the street fund by 7 percent, the audit says. At the same time, revenue for the general fund came in 15 percent below budget.

Officials apparently dipped into available fund balances to cover the overspending and the revenue shortfall.

In addition, the town traded in a car rather than put it up for auction, as required by state law, the report says. The town also spent more than $100,000 on three additional cars without soliciting public bids — a violation of state law.

The town’s financial statements had “material misstatements,” according to the audit, which was produced by the accounting firm LaPorte and covered the calendar year 2013.

The financial statements, which are prepared by an outside CPA firm, required significant adjustment in order to match up with the actual account balances, the report says. The cause of the problem was unknown.

In contrast to the May report, the latest audit was not accompanied by a combative response from the mayor accusing his political enemies and the activist group Concerned Citizens of St. Tammany for causing problems. Instead, the town’s response to the item about budget problems is terse: “The town agrees with the finding and will closely monitor the budget so that all required amendments are made.”

The response to the item about the cars is similarly brief, as is one about the town’s erroneous financial statements.

The report also hits the town for paying some vendors under a federal grant more than three months late, in violation of federal regulations.

The earlier legislative auditor’s investigation showed that Lavigne, Police Chief Bennie Raynor and Town Clerk Diane Bennett spent thousands of dollars in town funds for personal items. Although Lavigne and Bennett later reimbursed the town for the price of the items, according to the report, the pair told investigators they used town funds to avoid paying sales tax.

Bennett also received nearly $8,000 in extra payroll checks and was allowed to illegally cash in unused vacation time, the report said.

In addition, the town lacked documentation for 101 of the 106 purchases Lavigne made on his city credit card.

Lavigne’s response to those charges came in a bellicose 10-page letter headed “Don’t Believe Your Lying Eyes” in which he began by boasting that Pearl River had just hosted the best Easter egg hunt in town history. He then blistered the report and his political opponents, calling the Concerned Citizens of St. Tammany — whom he blamed for creating problems — the “carking cluster,” an apparently derogatory term.

In the letter, Lavigne conceded that he had fallen short in some areas.

“I may not be the best record-keeper in the world. I am a better welder, inspector, town crew manager and forward-looking town leader,” he said, while promising to do a better job of turning in receipts.

Just days later, Lavigne and Alderwoman Ruby Gauley issued a statement promising to correct the problems cited in that report.

The May report was turned over to St. Tammany Parish District Attorney’s Walter Reed’s office and the Louisiana Board of Ethics. A spokesman for Reed confirmed Monday that the office had received the report but refused to comment on any investigation.

Follow Faimon A. Roberts III on Twitter, @faimon.

Editor’s note: This story was changed on Aug. 19 to reflect that Pearl River Police Chief Bennie Raynor was accused of using town funds to buy personal items, but not to avoid paying sales tax.