The day-to-day financial realities of running a local government often come as a shock to newly elected officials.
Newly elected officials may find themselves dealing with an antiquated computerized financial reporting system. They may be unfamiliar with the reporting requirements for a local government. They must decide whether to keep their old auditor, or hire a new one. They may suddenly have to deal with legal issues regarding the local government’s budget, public records, or adherence to the public bid law.
The Louisiana Legislative Auditor (LLA) has many resources available to assist newly elected officials. For a complete list of the assistance LLA offers, please see
Legislative Auditor Assistance to Local Auditees 
.
One outreach effort LLA implemented in 2015 that newly elected officials have found to be especially helpful is the
Center for Local Government Excellence (CLGE), a multi-level training and certification program that discusses the internal control, accounting, financial reporting, legal and other issues regarding the operations of local government. The classes are presented periodically throughout the state, and the class materials are available on
LLA’s website. Challenges faced by newly elected officials face are specifically discussed in CLGE training, including the
Checklist for Newly Elected Officials.
QUESTIONS:
Q. I am a newly elected official and want to hire a new audit firm to perform my agency’s audit. Am I required to retain the audit firm from the old administration if there is a multi-year contract that extends into my administration? May I sign a contract with a new audit firm before I take office?
A. If a newly elected official wishes to cancel a multi-year engagement that was entered into under a previous administration, they should consult with their legal counsel to determine whether they may do so. They must also
contact LLA’s Local Government Services Engagement Manager . However, the new administration may not enter into any contract for the agency until they actually take office.
Q. I am a newly elected official of a local government, taking office in January. My agency has a 6/30 fiscal year end. I am certain that the prior administration misappropriated public funds. I do not want any findings associated with the old administration in the audit report of my new administration. May I engage a CPA firm to perform an audit on the portion of the fiscal year that pertains to the old administration, and a separate audit on the portion of the fiscal year that pertains to my new administration?
A. What you are describing is referred to as a “cut-off audit.” Cut-off audits are usually not approved by LLA. Local auditees must provide for a financial report for the agency’s entire fiscal year, not part of it. In addition, the audit is on the agency or office, not on the particular person holding the office. If significant findings from a prior administration are included in a new administration’s audit report, an appropriate response from the new administration is that controls have been put in place to ensure that the problems from the old administration are not repeated. Then, the new administration should follow through to ensure that these problems are not repeated. If the findings are corrected by the new administration, this will be reported in the subsequent year’s audit.
If you have concerns about specific types of transactions (such as travel or credit cards) that have been abused, you can hire an approved CPA firm to perform an
agreed upon procedures engagement relative to these transactions. These types of engagements are limited to the areas of concern, and often provide more information, at a lower cost, than a cut-off audit.