Shreveport, a town of less than 200,000 residents, is in debt to the tune of more than $1 billion, according to a report published by the State Legislative Auditor’s Office (LAO).
Its deficit means Shreveport won’t be able to pay its bills next year– and over the long term it can’t fund its obligations, the LAO says.
General obligation bonds, pension and other benefit obligations to former employees, and the renovation of Independence Stadium are among the biggest expenses the LAO says are why the city’s in the red.
Government revenue was $264 million in 2018, with nearly half coming from sales taxes, while the cost of government was $272 million for the year, leaving its “unrestricted net position” with a “deficit of $1.1 billion,” the LAO says.
The LAO listed 27 findings specific to city finance deficiencies, some of which were listed last year and were obviously not fixed.
The report also highlighted four city employees who were charged with felonies for mismanaging city funds and resources.
A Water and Sewerage Department employee was charged with felony theft totaling approximately $2,766 for providing free water to himself and others, and three city employees were charged with felonies for using city resources valued at more than $25,000 to work on their private driveways.
According to the auditor, city administrators didn’t have adequate controls over payroll processing and payroll data, didn’t ensure the accuracy of inventory records, and didn’t have procedures in place to ensure that year-end financial statements were prepared in an accurate and timely manner.
Shreveport was also fined $189,275 in penalties for filing its state payroll taxes late.
Among other issues, the town’s bank balances in three accounts were higher than the insured limits, which put the city at risk of potentially losing more than $9 million, the LAO adds.
In addition to its other failed accounting practices, city police and fire leave balances were not maintained accurately, vendor files lacked supporting documentation, officials didn’t monitor compliance and proper renewal of contracts, and water and sewerage sales taxes were improperly charged, leading to inaccurate financial statements.
City officials claim that the 27 deficiencies the LAO cited are being addressed.