Where's the DOJ money? Feds order Bay St. Louis to open its books
BAY ST. LOUIS - The city council Tuesday approved the hiring of a third-party auditor in compliance with a Justice Department directive to inspect the city's federal forfeitures account, which is missing about $300,000.
In a 7-0 vote, the council passed a motion to hire CRI -- Carr, Riggs and Ingram -- a New Orleans auditing firm, to inspect the city's records pertaining to the Department of Justice equitable sharing account.
The "DOJ forfeitures fund," as the city council calls it, holds money seized during operations such as drug busts conducted jointly by the Bay St. Louis Police Department and federal law enforcement agencies. Strict state and federal guidelines dictate how municipalities and local police agencies may use the money.
At the Aug. 18 City Council meeting, council members noticed nearly $300,000 missing from the account and called for authorities to investigate. Shortly after, the Office of the State Auditor dispatched investigators to the city, and the DOJ sent an assessment team to review the city's finances.
Also at that meeting, Mayor Les Fillingame said the forfeiture money was being placed in the city's general operating account, which holds money from many different sources. It's unclear what happened to the money.
The DOJ prohibits commingling of funds unless the city tracks the forfeiture money with a separate accounting code, which it did not. In November, Mayor Les Fillingame's administration released a letter sent by the DOJ that contained preliminary findings and directives regarding the account. The DOJ ordered the city to establish a separate checking account for the federal forfeitures and hire a third-party auditor to inspect the account records. It also placed the city on a "Do Not Spend" order, prohibiting further use of forfeiture money.
On Tuesday, City Clerk Robert Clark said he followed the DOJ's order and set up a new checking account at First Bank. He said the balance of the account is about $21,000.
Police Chief Mike De Nardo also addressed the council Tuesday to give a progress report on the DOJ review.
"It's not like any of the funds were misused on the law enforcement side," he said.
De Nardo said he completed most of the DOJ's directives, which required establishing new policies and procedures regarding the forfeitures. The final remaining directive requires the city to engage a third-party auditor to reconcile all equitable sharing account balances for each of the last six fiscal years.
"All they're doing is making sure the funds that we've received, we actually have," Clark said, noting that De Nardo kept "meticulous records" of every purchase the police department made.
De Nardo told the council he vetted several auditing firms before settling on CRI.
"I spoke to a lieutenant commander who does DOJ forfeitures in New Orleans, and he said, 'You can't buy these people off,'" De Nardo said. "So if New Orleans can't do it, we can't do it."
The police chief said he wanted to hire an out-of-town firm to help maintain the objectivity of the process.
The auditor's fees will run between $6,500 and $9,500.
This story was originally published December 9, 2015 at 3:05 PM with the headline "Where's the DOJ money? Feds order Bay St. Louis to open its books ."