ACA.lusaudit.061519

Drive-through lanes outfitted with pneumatic tubes are provided at the new Lafayette Utilities System and LUS Fiber customer service center on Moss Street Thursday, September 8, 2016, in Lafayette, La. 

A Louisiana Public Service Commission audit confirms what a former director reported in 2018: Lafayette Utilities System paid LUS communications (fiber) division for services it never used.

An audit dated June 4 for the PSC shows LUS' wastewater and electric divisions paid LUS communications six years for services it didn't use. With interest, it totaled more than $1.75 million, which was returned by the communications division to the LUS Utilities Fund.

Former long-time LUS Director Terry Huval reported the overpayment in 2018 after it was pointed out by an online news/opinion blog. At the time, Huval said he investigated and found fiber had been extended to some field operations, including sewer lift stations. Even though workers had not made the final connection between the fiber lines and the equipment, LUS paid the communications division for use of its fiber, he said.

The LUS electrical division also overpaid the communications division. According to the audit, some communications services were not terminated at some locations when the electrical service was relocated.

Huval, who at the time was director of LUS utilities and communications, said he reported the problem to the PSC and requested an audit. He also authorized the transfer of a $1.75 million repayment from communications to LUS, a move that was confirmed as the proper action by the auditors.

The audit noted that internal controls at LUS were insufficient to detect the problem, but that is being addressed. It also said having one person supervise the utilities and the communications divisions contributed to the lack of internal controls.

Mayor-President Joel Robideaux, with concurrence from the City-Parish Council, has since split the communications operations from the utilities and appointed a separate director.

Huval retired in July 2018. He planned to retire at the end of the fiscal year, Oct. 31, 2018, but retired early to preserve his retirement benefits since Robideaux intended on cutting the LUS director's pay from more than $200,000 a year to about $100,000 a year when he split it from the fiber operations.

The PSC audit calls the improper payment an act of noncompliance with its code of conduct, adding it gives the appearance of "self-dealing that clearly benefitted the Fiber Utility" and was essentially a subsidy to the communications operations, something its private competitors don't have and which is prohibited by state law.

It also concluded the communications operations violated the Fair Competition Act which assigns certain controls over government-owned operations like the fiber program to ensure they compete fairly with private industry.

This was the only area of noncompliance the auditors found. They recommended Lafayette Consolidated Government and LUS negotiate long-term contracts for communications services which may save money over monthly billing at some locations.

Follow Claire Taylor on Twitter, @ClaireTaylorACA