The East Baton Rouge Council on Aging ended the last fiscal year with a $202,000 deficit, according to a newly released audit on an agency whose leaders say they want the voters to approve a new dedicated tax.
The audit cites a handful of concerns about the Council on Aging’s funding picture and management. It says inflation is causing expenses to increase without more money coming in, and it says the council lacks the resources to draft its own financial statements and relied on auditors to help complete them.
Council on Aging CEO Tasha Clark Amar recently announced that the Council on Aging would ask the Metro Council to place a dedicated tax proposal on fall ballots.
Amar and CFO Eva Pratt said Monday that the reason for the 2015 deficit was that the council sank more than $200,000 into an attempt to open a bingo hall that would create a steady revenue stream. But the bingo hall was not successful, and the council started to lose money on the effort.
The council would have finished the year with a surplus if not for the bingo losses, Pratt said.
Amar highlighted the struggles of being reliant on fluctuating fundraising amounts and state and local money. She said council has already suffered some state budget cuts, and is bracing for more possible reductions in state financing.
A dedicated tax would be more reliable than state and local government allocations, she said. The $7.8 million that their proposed property tax would generate would allow the Council on Aging to expand its most popular services, like Meals on Wheels.
“We do a great job with a little bit of money and we will do a better job if we had a little bit more,” Amar said.
Some relief for the council may also come from an automobile rental tax bill that the Louisiana Legislature passed during its recent special session. The bill is intended to funnel money to Council on Aging groups across the state, and outlines that it dedicates 40 percent of the local taxes on car rentals in East Baton Rouge Parish to go toward the Council on Aging.
Amar said she is still unsure when the new money would start coming to the council and how much money it would add to their budget. While she said she’s grateful for financial help, she said the unknowns make the automobile rental tax too fuzzy for the council to depend on.
The amount of money that the Council on Aging took in during 2015 was down by 4 percent from the previous year. Meanwhile, expenses increased by 14 percent, inflating to nearly $4.04 million despite the council only having $3.67 million in revenue. The council completed the fiscal year that ended June 2015 more than $200,000 in the red; the deficit balance shrunk a bit thanks to a $168,306 surplus from the previous year.
The council is planning several new policies to decrease its deficit, according to the audit. They want to create and follow better budgets that reduce expenses, increase revenue from private grants and stop fundraising programs that are not profitable.
Amar said the council has an agreement that the auditors will help them finalize their financial statements because the council cannot afford to hire an independent CPA to oversee their books.
Baton Rouge-based L.A. Champagne & Co. LLP performed the audit, which also says the council is violating its lease agreement for its building on Florida Boulevard. The audit says the council only has $2.5 million in fire and casualty insurance even though its lease requirement with the city-parish requires them to have $5 million in coverage.
Amar and Pratt said the lease complaints will go away once the council moves into a building they are renovating on Main Street. They said they expect to move sometime in the next two years.
They said their insurance appraisers valued their current building at $2.5 million, which is why their insurance coverage is not for $5 million.
Employee time sheets also raised a flag in the audit for their lack of oversight and verification. The auditors wrote that they found three discrepancies out of 64 payroll transactions, some of which happened in 2014. They led to paying too much and too little to council employees, despite supervisors signing off on the time sheets.
Amar said she met with the supervisors to make sure they are more diligent in overseeing their employees’ payment.
“Without a system of checks and balances, there is a greater risk that intentional or unintentional errors including the overpayment of salaries to employees could be made and not detected in the ordinary course of business,” the audit reads.