City of Mansfield

MANSFIELD, La. — An independent audit of the City of Mansfield's finances for the year ending Dec. 31 identified recurring problems with internal controls, compliance with state budget laws and financial reporting.

Findings in the audit by Allen, Green & Williamson LLP were similar to last year’s. The Louisiana Legislative Auditor's Office released the audit today. 

Auditors also noted revenue was up slightly due to increased sales tax collections.

During the year, the city’s expenses exceeded revenue by $18,000. Last year, the city spent $363,000 more than it took in, auditors said in the financial statement.

On the revenue side, auditors said there was a $259,000 increase mainly due to sales tax collections and grant rewards, while expenditures decreased $372,000 because of less maintenance expenses.

Total cost of all of the city’s activities was about $5 million.

2025 findings

Auditors reported two significant deficiencies in internal control, including one considered a material weakness, otherwise known as a flaw in internal financial controls. The audit also found instances of noncompliance that were related to the financial statements.

The report identifies three findings, all of which were previously cited in earlier audits. The findings include:

  • Financial transactions processed without adequate supporting documentation or appropriate approvals.
  • Purchase orders dated after corresponding invoices, indicating lapses in procurement control.  Inconsistent application of established policies, including enforcement of utility disconnection procedures.
  • Lack of oversight in areas such as police citation management and credit card activity.
  • Absence of formally adopted policies in key areas such as inventory management, capital asset tracking, and grant administration.
  • A critical data loss occurred in the utility billing system when an entire month of billing records was inadvertently overwritten by the water department. The lost data cannot be recovered, indicating a lack of data backup procedures and insufficient safeguards against overwriting critical system information.
  • No separation of duties in the payroll process.

According to the report, those deficiencies increase the risk of financial errors, unauthorized transactions and reduced accountability over public funds.

Auditors recommended the city consistently enforce existing financial controls, adopt formal policies for inventory, payroll, asset management and grant administration, strengthen oversight of high-risk areas such as utility billing and credit card use, and provide employee training on internal controls.

City management said it plans to train employees on procurement procedures and adherence to policies and will develop written procedures for inventory, asset management and grant funding. The finding was first reported in the 2024 fiscal year.

Late budget hearing

A second finding states the city failed to comply with Louisiana laws governing the budget process. Auditors said notice of a public budget hearing was published after the budget approval hearing had already taken place.

The report says the issue reflects inadequate compliance with state requirements and a failure to fully address recommendations made in previous audits. Auditors warned the deficiencies could expose the city to legal noncompliance, reduce fiscal oversight and increase the risk of unauthorized spending.

To address the issue, auditors recommended establishing procedures to ensure public meeting notices are published on time.

City management said it already has budget procedures in place but experienced delays with its local newspaper. Officials said they plan to submit notices earlier and follow up with the newspaper to ensure timely publication. The finding was originally reported in the city's 2023 audit.

Financial reporting weaknesses

The third finding cites weaknesses in the city's financial reporting. Auditors identified accounting errors that required manual adjustments during the audit, including transaction classification errors, unrecorded payables, discrepancies involving accounts receivable and revenue balances, and the failure to record an allowance for doubtful accounts.

The audit also found routine account reconciliations were not consistently performed and that some accounts lacked adequate supporting documentation or oversight.

According to the report, those issues could result in inaccurate financial statements, unreliable fund balances and diminished confidence in the city's financial reporting.

Auditors recommended requiring a second review of journal entries, reconciling balance sheet accounts monthly, improving classification of revenues and expenditures, implementing a structured financial closing process and establishing policies for managing overpayments and billing credits.

In its response, the city said the city clerk will begin reviewing journal entries starting July 1.

The financial reporting finding was first identified in the 2024 fiscal year.

State law noncompliance

The audit also stated several instances of noncompliance with Louisiana state laws cited in 2024 were not cleared:

  • Public bid law procedures were not followed for certain large purchases, including chemicals and water meters, despite prior-year findings noting similar concerns.
  • The general fund budget was not amended during the fiscal year, despite expenditures exceeding the original budget by more than 5%, in violation of state budgeting requirements.
  • As of Jan. 21, 2025, the most recent public meeting minutes posted on the town’s website were dated April 8, 2024. This does not comply with requirements for timely online posting.
  • Waivers of utility late fees were granted without proper documentation or explanation, reflecting inconsistent application of policy and lack of transparency.