Audit Finds Issues With Baton Rouge Over Rental Assistance, Bridge Spending

BATON ROUGE (The Center Square) — Baton Rouge and Easton Baton Rouge Parish faced fraud and reporting issues with an emergency rental assistance program and may have misspent federal COVID aid on a bridge replacement last year, according to a new audit.

An annual comprehensive financial report for the consolidated government of Baton Rouge and East Baton Rouge Parish released by Louisiana Legislative Auditor Mike Waguespack last week examined finances and federal grant compliance in 2022.

An included audit details 14 findings regarding issues ranging from incomplete documentation for purchase cards to a lack of required records for federal grants, with the most significant involving an emergency rental assistance program and federal COVID funds.

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Auditors found the city-parish’s Emergency Rental Assistance Program detected four instances of known fraud in 2022, which were reported to the Baton Rouge Police Department for investigation.

“Approximately 15,000 applications have been processed by the program since the program’s inception in 2021. Four cases of fraud identified in 2022 have been referred to law enforcement and an additional six cases were reported in the prior year,” auditors wrote.

“The City-Parish’s ERAP program fell victim to known fraud totaling approximately $37,009 in 2022 and $90,000 since the program’s inception in 2021.”

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Local officials told auditors they plan to continue to follow established policies that uncovered the fraud and have updated program guidelines to forbid rental assistance to single-family rentals where the landlord holds homestead exemption.

“Any other single-family rentals owned by an individual will need to provide proof of payment and receipt of three months of rental assistance via canceled checks or bank statements,” officials wrote in response to the finding. “This rule is being implemented due to evidence that most fraud cases involve single-family home rentals owned by individuals.”

Auditors also found data on that program was not reported accurately to the U.S. Treasury, as required, an issue officials blamed on an error in the Treasury reporting portal. The process for paying out the rental assistance through a contractor also causes issues with the reported amounts aligning with city-parish accounting records, officials said.

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Another significant finding centered on $612,283 in Coronavirus State and Local Fiscal Recovery Program funds spent to replace the Twin-Oaks bridge that “may not be an allowable activity,” auditors wrote.

Local officials contend the replacement was needed to help residents in rural areas access healthcare quickly and pointed to an excerpt in the Treasury’s final rule that local officials believe allows for the spending.

A separate finding regarding the same program cited a lack of documentation to support the distribution of salaries and benefits for employees who worked on the State and Local Fiscal Recovery Program, which resulted in $522,000 in questioned costs.

City-parish officials responded that they reworked employee payroll charges for federal grant programs to avoid similar problems in the future.

 

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