Louisiana Legislative Auditor
Daryl G. Purpera, CPA, CFE

May 18, 2015

Improper Expenditures Uncovered in Audit of St. Mary Parish Consolidated Gravity Drainage District No. 2

Improper expenditures—totaling more than $2,500,000, as well as missing equipment and a lack of board oversight, were uncovered during an audit of St. Mary Parish Consolidated Gravity Drainage District No. 2, according to a report issued Monday by Legislative Auditor Daryl Purpera’s office.

The report said Peter Businelle, the district’s maintenance supervisor, used his position to improperly direct $2,582,115 of public funds to himself while doing business as PAB Welding Service from January 2009 through November 2013. These payments were for maintenance and improvement jobs allegedly performed at district properties with little to no verification of the need for the work, whether the work was actually performed or whether rates charged were appropriate. The audit concluded that some of these payments may have been for services that were not provided, unnecessary or at inflated prices.

In addition, Mr. Businelle made payments to former Board Chairman Carl Kraemer totaling at least $42,833 from 2009 through February 2013 but could not provide a verifiable explanation for the payments.

Auditors also found that 42 pieces of equipment and/or tools totaling at least $10,990 were purchased with district funds from November 2009 through January 2013 but are not in the District’s possession. Records indicate that Mr. Businelle received 35 of these items, and Mr. Kraemer received three of the items.

The state auditor’s report also noted that “the district board failed to create, adopt, maintain, and/or file the appropriate written policies and procedures, public meeting procedures, required tax forms, fiscal controls and/or other records to properly govern district affairs and safeguard public funds.”

This audit was initiated after the Louisiana Legislative Auditor received a letter from the 16th Judicial District Attorney’s office stating it received allegations that an independent contractor may have misappropriated district funds.

The district is responsible for nine pumping stations and several drainage ways. Seven of these stations are within the Morgan City incorporated limits. The city and district have a cooperative endeavor agreement for the maintenance of the drainage ways, levees and other aspects of the drainage system within the city limits.

Copies of this report were delivered to the District Attorney for the 16th Judicial District of Louisiana and the U.S. Attorney for the Western District of Louisiana.

For more information contact:

Legislative Auditor
225.339.3800



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