Audit report: N.O. Traffic Court $1.1 million in the red _lowres

Advocate staff file photo by MATTHEW HINTON -- The New Orleans Municipal Traffic Court on Broad and Perdido Streets

Deep cuts in city funding and a dearth of cops writing traffic tickets are among the factors squeezing New Orleans Traffic Court, contributing to a cumulative deficit that has grown to $1.1 million over the past few years. But court officials are looking to reduce costs and generate more revenue with a new case management system that’s expected to be implemented later this year.

Those were among the findings of an independent audit released Monday by Gurtner Zuniga Abney, a New Orleans accounting firm that examined the court’s 2013 financial statements.

Traffic Court has been a frequent target of criticism in recent years over questionable operating and accounting practices, including an embezzlement scandal involving a bookkeeper accused of pocketing hundreds of thousands of public dollars. But the annual audit found the court has continued to reduce expenditures, and it attributed its mounting shortfall to factors Chief Judge Bobby Jones said are largely beyond the court’s control — including major funding cuts and a $2.4 million payment the court made in 2011 to help the cash-strapped city tend to its own financial wounds.

“I thought we had a pretty clean audit, except for one isolated instance with payroll, which we’ve corrected,” Jones said, referring to a finding that said the court had “inadequate controls over the review and approval of annual and sick leave time as it related to two senior management employees.”

“The city has a financial crisis,” Jones added, “and I think each department, including the courts, has an obligation to operate with fiscal efficiency. So we’ve cut our operational costs by 40 percent, we’ve cut staff by 40 percent and we’ve eliminated third-party contracts.”

The court resolved an issue in which it previously had violated public bid law, the audit found, having since “developed and implemented a purchasing policy to procure purchases through a competitive process.”

The audit noted the court had operating deficits in 2011 and 2012, and in 2013, expenses again exceeded revenue by $76,660 — down from $697,000 in red ink the year before.

The court formerly received an annual allocation of some $900,000 from the city, but Mayor Mitch Landrieu’s administration scaled back the appropriation when it took office in 2010 as part of in an effort to “avoid city bankruptcy,” said Andy Kopplin, Landrieu’s chief administrative officer. The city’s 2014 budget sets aside $437,587 for Traffic Court.

“The big story is that the expenditures by the Traffic Court went from $5.8 million (just a few years ago) to less than $4 million,” Kopplin said. “That’s what the judges, to their credit, have done at my request. ... What’s really important is how little they spend of the money that’s generated (by the court), so that residual money comes to the city.”

Jones said the court faces a “constitutional dilemma” in that “we have to assess fines and fees to operate, and with a manpower shortage in the city of New Orleans, the city is no longer prioritizing traffic enforcement.”

“You’re trying to stop violent crime, and so you don’t have officers to issue traffic citations,” Jones added. “Traffic citations are way down. They’re half of what they used to be; therefore, our funding mechanism is no longer there.”

Traffic Court also is affected by laws limiting the portions of its generated revenue — money from traffic tickets and court costs — that may be used to cover operational expenditures, Jones said.

“Historically, Traffic Court has generated $12 million a year. We’re only allowed to take from that $12 million that which is statutorily dedicated to us,” he said. “The problem is that (amount) does not approach our operational costs.”

The audit comes amid a contentious debate over whether Traffic Court should merge with New Orleans Municipal Court, a discussion fueled in large part by Inspector General Ed Quatrevaux, who has recommended the move in light of allegedly wasteful spending and glaring operational deficiencies at both courts. The questionable practices were underscored last year when a federal grand jury indicted Vandale Thomas, a former Traffic Court bookkeeper, on a dozen counts, including theft and money laundering. Thomas is scheduled to stand trial Oct. 6.

“We have taken the position that the traffic and municipal courts should be consolidated to improve the efficiency and reduce the cost, and that the number of judges should be adjusted,” said Janet Howard, president of the Bureau of Governmental Research.

A bill in the Legislature this year aiming to merge the two courts was revised to call instead for a task force to come up with a plan to merge the courts’ operations in 2017. Gov. Bobby Jindal signed the legislation, House Bill 1206, Monday.

In the meantime, Traffic Court is preparing to phase out an antiquated case management system that, according to the audit, has “historically resulted in an inefficient case management process, as it relies heavily on manual paper-driven processes.”

Debra Hall, the court’s judicial administrator, said the system was going to cost the court $1 million or more, but officials received a grant to fund it and expect to implement it as soon as August.

“Traffic Court is still a money-making operation, even in the worst of times,” Jones said. “And this is the worst of times.”

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