A recent audit of the Town of Gibsland found nine financial and administrative deficiencies that remained unresolved from the previous year’s audit, including problems with internal controls, budgeting, payroll, utility billing, and the town’s legal classification.
The audit, covering the fiscal year ended June 30, 2025, identified five significant deficiencies, three of which were classified as material weaknesses, along with four instances of material noncompliance. The town’s financial statements received an unqualified audit opinion.
All nine current-year findings were carried forward from the previous audit as unresolved. Two other findings from the previous audit were resolved.
One finding involved the town’s internal controls over financial reporting. Auditors found that four bank accounts had not been reconciled or entered into the general ledger for the year ended June 30, 2025. The report said the town does not have staff capable of preparing financial statements and related notes in accordance with generally accepted accounting principles.
Auditors also found inadequate segregation of duties within the town’s accounting and reporting system. The town clerk is responsible for numerous functions involving cash, receivables, billing, collections, posting, reconciliation, and payroll, creating what auditors described as a potential for fraud because of a lack of checks and balances.
Problems also were identified in the town’s disbursement procedures. Of 40 randomly selected disbursements reviewed by auditors, 13 were posted to incorrect accounts, six payroll disbursements lacked properly approved time sheets, 10 lacked proper supporting documentation, and one travel reimbursement did not use the correct per diem rate.
The audit also found the town failed to submit its financial statements to the Louisiana Legislative Auditor’s Office by the statutory deadline of December 31, 2025. State law requires audited financial statements to be submitted within six months of the end of the fiscal year.
Budget compliance was another finding. For the year ended June 30, 2025, the General Fund’s budgeted revenues exceeded actual revenues by more than 5%, or $28,474. Actual expenditures also exceeded budgeted expenditures by more than 5%, or $20,283.
Auditors also found problems involving payroll taxes and employee leave records. The town did not pay payroll taxes timely, supplemental pay was not included in payroll, and sick and vacation records were not maintained according to town policy.
Utility billing and receipts also remained an issue. The audit identified inadequate internal controls over utility billing and receipts as an unresolved finding from the previous year.
Another finding concerned the town’s classification under state law. The audit states that Gibsland has fewer than 1,001 residents and therefore should be classified as a village rather than a town. Under that classification, the governing board would consist of three members rather than five. The finding remained unresolved from the prior audit.
The audit also identified a potential violation of Article VII, Section 14 of the Louisiana Constitution concerning the donation of public funds. Auditors reported that two employees received raises for which no approval was recorded in the town’s minutes, and one employee was paid for more sick and vacation hours than allowed under town policy.
The town’s corrective action plan states that it agrees with all nine findings and recommendations and intends to implement them immediately.