State audit details utter disarray in Slidell Housing Authority during 2009-10 fiscal year

From April 1, 2009, to March 31, 2010, the Slidell Housing Authority was in steep administrative disarray, a fiscal audit by the state has found.


The 44-year-old agency kept sloppy financial books, the audit claimed, which fostered "an environment that is conducive to the misappropriation of assets." It bought a car for its former executive director, who lost his job after purchasing personal items such as flowers with a public credit card. It also had not maintained a proper ledger system.

Read the report.

New Orleans-based Bruno & Tervalon LLP classified the varied instances of mismanagement as "material weaknesses" which, if not corrected, could lead to serious misstatements of financial conditions.

However, there is good news for the city: The authority told the independent auditors that it has been rectifying its shortcomings even before the findings were released March 2.

Last fiscal year, for example, the agency did not support 24 of 73 purchases examined with invoices. Five of those transactions involved charging $13,240 to an authority credit card -- $7,395 of which related to travel expenses not backed up by invoices. The travel policy the authority itself adopted in 1997 requires employees to supply receipts for any purchase exceeding $30, Bruno & Tervalon's accountants said.

Sixteen other purchases totaling $12,726 were simply invalid. Former director Marvin Butler used $126 from that amount to pay for flowers for his father and another unspecified person. An unspecified nonprofit group received a $5,000 donation from the authority, and its unidentified director got $500. Another $7,100 went to Butler's allowance for a car, which was purchased by the authority but could only be driven by Butler.

"Twenty-seven of the 73 transactions tested involved transaction incurred on behalf of and approved by (Butler)," who had been in charge since 1999, the accountants found.

Mayor Freddy Drennan fired Butler in November and replaced him with Sheila Danzey, Butler's predecessor, who did not reply to interview requests Thursday. Then, Drennan accepted resignations from three of the authority's five commissioners, each of whom had served during much of Butler's misconduct.

Furthermore, in the audit, the authority told Bruno & Tervalon that it had discontinued using credit cards until its board of commissioners crafted a policy addressing the issue. Officials, it said, were in the middle of revising the authority's travel policy, which "will incorporate safeguards against disallowed costs and ensure accurate classification of costs."

The audit also urged authority managers to conceive a new ledger system. The one they had been using produced shocking errors.

Bookkeepers failed to note when two of their checks had been physically voided. Then, after a replacement check was cut, managers failed to record it on the general ledger.

In another example of poor accounting, the authority opted to not maintain a separate ledger for its Disaster Housing Authority Program, or DHAP. However, the audit said, federal Housing and Urban Development requires all activities related to DHAP to be "accounted for, completed and recorded separately from other programs managed by the housing authority."

The accountants warned that ignoring the ledger system's inadequacy may result in the agency's non-compliance with both federal regulations and their own.

In response to that section of the audit's findings, Slidell Housing Authority leaders said they are developing and revising financial procedures that would correct the situation and hope to implement them by April 1.

Created in 1967, the authority manages low-rent housing, housing choice vouchers and disaster assistance housing for low-income residents of Slidell and Pearl River. It is an independent agency, and the city has no link to it other than the five commissioners, appointed by the mayor.

Ramon Antonio Vargas can be reached at or 985.898.4827.