Reporting Fraud To The Legislative Auditor

Questions:

What would be an example of an agency head?

The agency head is the chief executive or administrative officer of an agency, or any member of a board or commission who exercises supervision over the agency. For example, for the purposes of R.S. 24:523 A., the agency head of a town would be the mayor.

What form does the notification need to be in?

The notifications required by R.S. 24:523 A. usually come to LLA by letter, written by either the agency head of the local auditee or the local auditee’s legal counsel. The local auditee may write separate notification letters to LLA and the DA, or one notification letter addressed jointly to LLA and the DA.

How much information is required to be included in the letter about the misappropriation?

The law is silent as to the extent of the notification; but it is recommended that the agency head include everything about the misappropriation that is known at the time.

The notification in R.S. 24:523 A. must be made when the agency head has either “actual knowledge” or “reasonable cause to believe” that a misappropriation of public funds or assets has occurred. The second criterion appears to be at a much lower level than the first. If I as an agency head am not 100% sure that a misappropriation has occurred, should I make the notification to LLA and the DA that is required in R.S. 24:523 A.?

LLA recommends that the agency head make the notification as soon as they believe that a misappropriation of public funds may have occurred. If the agency is not sure whether a misappropriation has occurred or the amount of the misappropriation, it is still best to contact the LLA and the district attorney as soon as possible

How much time does the agency have to make the notification after discovery of a misappropriation?

The law states that the notification must be made immediately, but does not define the term. LLA recommends that the notification be done as soon as possible after the agency head believes that a misappropriation of public funds may have occurred.

Does the law allow my agency time to conduct an investigation to determine the amount of the misappropriation before we notify LLA and the DA?

The law appears to require that an agency head notify LLA and the DA immediately upon learning of the existence of a misappropriation. It does not appear to allow the agency head time to investigate the misappropriation to determine the amount prior to the notification.

At what point is an agency head required to report a misappropriation to law enforcement?

The law is silent on this matter. LLA recommends that the agency head of a local auditee should report a misappropriation to law enforcement at the same time the notification is sent to LLA and the DA – as soon as the agency head is believes that a misappropriation of public funds may have occurred.

What happens after the notification is made to LLA and the DA?

That depends on the stage of the investigation. If the investigation of the misappropriation is in the initial stage, LLA may offer its resources to assist in the investigation. If the investigation is complete, LLA will send the misappropriation notice to the CPA firm performing the local auditee’s audit or other engagement, and ask them to make sure that the misappropriation is reported in the local auditee’s next annual financial report.

I work for a local auditee and am aware of a misappropriation that has occurred. I am not the agency head; in fact, I believe the agency head is involved in the misappropriation. What should I do?

You can either send a notification to LLA’s fraud hotline, or you can call LLA (225) 339-3800 and ask to speak to the Director of Investigative Audit Services.