LAWS AFFECTING LOUISIANA GOVERNMENTS

LOUISIANA GFOA FALL CONFERENCE JULY 2011 PRESENTED BY: PAUL C. RIVERA, CPA CHIEF FINANCIAL OFFICER JEFFERSON PARISH SHERIFF’S OFFICE 1

OUTLINE OF COURSE

• Louisiana Compliance Questionnaire – Sets forth statutes that must be adhered to – This course will mirror the Questionnaire • Public Bid Law • Code of Ethics • Laws Affecting Budgeting • Accounting, Auditing, and Financial Reporting Laws • Meetings • Asset Management Laws • Fiscal Agency and Cash Management Laws • Debt Restriction Laws • Revenue and Expenditure Restriction Laws 2

OUTLINE OF COURSE

• We will finish with an overview of some of the

criminal statutes

that apply to all of us • Booklet entitled “

Laws Affecting Louisiana Governments

” used to be produced by Legislative Auditor and LSCPA – No longer produced • Download booklet of statutes covered in this class at

http://www.jpso.com/FinancialAdminist ration/LAGFOA.aspx

3

LOUISIANA COMPLIANCE QUESTIONNAIRE

• Lists out the various statutes that governments must comply with • Available at:

http://www.lla.la.gov/userfiles/file/cques gv.pdf

• Used by auditors in testing compliance under a Yellow Book audit listed – “safe-haven” • There are many statutes that apply that are not • It is imperative that agency personnel are familiar with those that apply 4

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2211 – Definitions • LRS 38:2212 – Advertisement and Letting to Lowest Responsible Bidder;

Public Work

; Electronic Bidding – LRS 38:2212 A.(1)(a) - All “Public Work” exceeding “

Contract Limit” (currently $150,000)

shall be advertised and let by contract to “

lowest responsible bidder

” – A.(1)(b)(i) - Requirements shall not be waived by any entity 5

PUBLIC BID LAW Public Works (Construction)

• A.(1)(b)(ii)(aa)

Bid Form

– Available at:

http://www.lma.org/Docs/PDF/LAUniformPublicWor ksBidForm.pdf

Designed to make it harder for entities to “nit-pick” bids in order to disqualify bidders • (bb) Other documentation and information required shall be furnished by the low bidder within 10 days after the bid opening • (c)(i) Evidence of agency, corporate, or partnership authority shall be required for submission of the bid (i.e., authorized rep of bidder must sign) 6

PUBLIC BID LAW Public Works (Construction)

• A.(1)(c)(ii) – Each bid shall be either hand delivered by the bidder or his agent, in which instance the deliverer shall be handed a written receipt, or such bid shall be sent by registered or certified mail with a return receipt requested – Does not apply to parochial or municipal governments – Cannot take bids on holidays 7

PUBLIC BID LAW Public Works (Construction)

• (d) Contract Limit - $150,000 • (e) Public entities shall furnish all bidders with at least one set of complete bid documents – May require deposits on the bid documents – Deposits to be refunded within 10 days after receipt of bids 8

PUBLIC BID LAW Public Works (Construction)

• (f)(i) Contractors shall be provided the option to submit bids for public contracts through a

uniform and secure electronic interactive system

– Parishes <20,000 population are exempt – Municipalities <10,000 population are exempt – JPSO contracts with 3 rd party vendor – See:

http://www.centralauctionhouse.com/

9

PUBLIC BID LAW Public Works (Construction)

• (3) (a)

Advertisement required for any public works contract

shall be published once a week for three different weeks in a newspaper in the locality – First ad shall appear at least

25 days

opening of bids prior to – Public Entity must also publish an advertisement by

electronic media

to the general public available 10

PUBLIC BID LAW Public Works (Construction)

• (3)(b) First ad cannot appear on a Sat, Sun, or legal holiday • Plans and specs must be available on first day of ad and up to 24 hours before bid opening date • (3)(c)(i) If designer’s estimate is more than funds budgeted, the project shall not be advertised for bid. Designer’s estimate shall be read aloud upon opening bids.

11

PUBLIC BID LAW Public Works (Construction)

• (3)(c)(ii) The bid form shall contain: – Bid Security or Bid bond – Acknowledgment of Addenda – Base Bid – Signature of Bidder – Name, Title, and Address of Bidder – Name of Firm or Joint Venture Corp Resolution – Louisiana Contractor’s License Number 12

PUBLIC BID LAW Public Works (Construction)

• (3)(c)(ii) “Other documentation” required shall be furnished by low bidder within 10 days after bid opening • (3)(d)(i) When a design professional or public entity mandates attendance at a pre-bid conference, the date, place, and time of the pre-bid conference shall be stated in the first advertisement 13

PUBLIC BID LAW Public Works (Construction)

• (3)(e) Any proposal shall not include more than

three (3) alternates

. – Alternates, if accepted, shall be accepted in the order in which they are listed on the bid form – Determination of low bidder shall be on the basis of the sum of the base bid and any alternates accepted – Public entity reserves the right to accept alternates in any order which does not affect determination of the low bidder 14

PUBLIC BID LAW Public Works (Construction)

• (4) All public work contracts shall contain provisions authorizing the issuance of

change orders

within the scope of the contract • (5) All change orders must be in writing • (6) Any change order outside the scope of the contract in excess of the contract limit shall be let out for public bid • (7) Change orders on public work shall be negotiated in the best interest of the entity or let out for public bid 15

PUBLIC BID LAW Public Works (Construction)

• 38:2212 B. Contracts let by any public entity for public works estimated to cost in excess of the contract limit ($150,000) shall be advertised and let by contract to the lowest responsible bidder • Public works estimated to cost less than contract limit ($150,000) may be undertaken by the public entity with its own employees.

16

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2212 C.(1) Public Entity may, through the issuance of an

addendum

, extend bid period for up to thirty (30) days • C.(2) If Public Entity issues an addendum on public works project exceeding contract limit ($150,000) that modifies plans and specs

within 7 days of bid opening

, Public Entity

must transmit

bidders who have requested bid documents – Must do hand a copy of the addendum to all prime

within 24 hours

– May use fax, e-mail, or other electronic means or by 17

PUBLIC BID LAW Public Works (Construction)

• C.(2)(b)

No addenda

modifying plans or specs

within 72 hours

prior to advertised time to open the bids 18

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2212 D.(1)(a) This Section shall not apply in cases of “

public emergency”

public entity and notice of such public the official journal of the public entity that an “

extreme” public emergency

where such emergency has been certified to by the emergency shall, within 10 days, be published in • (b)(i) This Section shall not apply in the event journal occurs • (b)(ii) Parish president or mayor shall declare that an extreme emergency exists and shall cause declaration to be published in official 19

PUBLIC BID LAW Public Works (Construction)

• D.(2)

Limitations

– Contracts must be supported by written determination and findings justifying use – When telephone or oral offers are taken, a written confirmation of the accepted offer shall be obtained and made part of the contract • Including a description of the work to be performed • Name and address of each offeror • Performance time and terms of each offer 20

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2212 E. A publicly owned utility may undertake a public works project, other than construction of a building, for the contract limit or less by: – Entry into contracts with or without public bid – Use of own employees 21

PUBLIC BID LAW Public Works (Construction)

– LRS 38:2212 F.(1) When public entity desires to purchase

technical equipment

, apparatus, machinery, materials, or supplies of a certain type and such purchases are clearly in the public interest, the public entity may specify a particular brand, make or manufacturer in the specs let out for public bid – (2) The specs shall state clearly that they are used only to denote quality standard of product desired and that

equivalent products will be acceptable

22

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2212 H. Under

no

circumstance shall there be a

division or separation

of any public work project into smaller projects which division would have the effect of avoiding the requirement that public work be advertised and let by contract to the lowest responsible bidder 23

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2212 J. If the public entity letting the contract proposes to

disqualify any bidder

bidder”, such public entity shall: , on grounds that such bidder is not a “responsible – Give written notice of the proposed disqualification to such bidder and include reasons for disqualification – Give such bidder the opportunity to be heard at an informal hearing at which bidder is afforded the opportunity to refute the reasons for the disqualification 24

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2212 M. No public entity shall enter into a contract for the purposes of public works with a contractor who then finances the project 25

PUBLIC BID LAW Public Works (Construction)

• LRS 38:2212 O. Whenever evidence of

corporate authority

is required for the submission of a bid, such fact shall be contained in the bid documents and such proof shall be provided in accordance with this section. The authority of the signature of the person submitting the bid shall be deemed sufficient if any of the following are met – Signature of corporate officer listed on current annual report filed with Secretary of State – Signature is authorized by a Corporate Resolution – Corporation has filed list of authorized signatures with State or Clerk of Court 26

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212.1 Advertisement and letting to lowest responsible bidder,

materials and supplies

• LRS 38:2212.1 A.(1)(a) All purchases of any materials and supplies exceeding $30,000 to be paid out of public funds shall be advertised and let by contract to the lowest responsible bidder 27

PUBLIC BID LAW Materials and Supplies

• A.(b) However, purchases of $10,000 or more, but less than $30,000, shall be made by obtaining not less than

three (3) telephone or facsimile quotations

– Written confirmation of the accepted offer shall be obtained and made part of the file – If lowest quote is rejects, reasons shall be noted in file 28

PUBLIC BID LAW Materials and Supplies

• A.(2)(a) Any purchase by a local govt of a used or new motor vehicle for conversion into a

law enforcement vehicle

, which purchase cost does not exceed $20,000, shall not be subject to the $ thresholds in paragraph (1) 29

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212 B.(1)

Advertisement

required by this Section for any contract for materials and supplies, shall be published

two (2) times

in a newspaper, the first ad appearing at least

15 days

before the bid opening –

May

also publish an ad by

electronic media

available to the general public 30

PUBLIC BID LAW Materials and Supplies

• B.(2) First publication of ad shall not occur on Sat, Sun, or legal holiday – Plans and specs must be available on first day of ad up to 24 hours prior to bid opening • B.(3) Any proposal shall include no more than three (3) alternates • B.(4)(a) Contractors shall be provided the option to submit bids for public contracts through a uniform and secure electronic interactive system 31

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212.1 C.(1) Wherever in

specifications the name of a certain brand

, make, manufacturer, or definite spec is utilized, the specs shall clearly state that they are used only to denote the quality standard of product desired and that

equivalent products will be acceptable

32

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212.1 D. This Section shall not apply to a public entity

purchasing surplus materials

or supplies form another public entity or the government of the United States or when the particular transaction is governed by the procurement code.

– State of

Louisiana Surplus Property SECOND

vehicles, and much more.

– See: auctions are held once a month. The auctions are held on the Saturday of each month. Merchandise auctioned off includes office equipment, medical equipment, office furniture, boating equipment,

http://doa.louisiana.gov/lpaa/auction.htm

33

PUBLIC BID LAW Materials and Supplies

– Also see

Federal Property Assistance

: • The primary function of the Federal Property Assistance Program is to re-utilize property no longer needed by the federal government by making it available to Louisiana entities. This surplus property may be used by all eligible donees in public and private education, public and private health facilities, cities, parish and state governments, qualified 501 non-profit organizations and qualified SBA 8a contractors • See:

http://doa.louisiana.gov/lfpaa/home.htm

34

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212.1 E.

(GSA) Any

public entity may procure materials, supplies and equipment from

federal General Services Administration

supply schedules in compliance with the Federal Acquisitions Streamlining Act and with rules and regulations adopted by the central purchasing agency of the Division of Administration • LRS 38:2212.1 F. Any public entity may purchase materials, supplies, and equipment pursuant to the cooperative purchasing provisions of LRS 39:1701 et seq.

35

PUBLIC BID LAW Materials and Supplies

• LRS 39:1702 – Cooperative Purchasing – State Contract •

http://doa.louisiana.gov/osp/contracts_index.htm

– Federal General Services Administration (GSA) 36

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212.3 - Right to

reject bids

from

Communist countries

– Including but not limited to the Soviet Union, China, North Korea, and Vietnam – Award to next lowest bidder • LRS 38:2212.7 - Limitations on consultants competing for contracts – Any person contracting with agency for developing bid documents, requests for proposals, or other solicitations shall be prohibited from bidding, proposing or otherwise competing for award of that procurement 37

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212.8 – Prohibition of bids from or contracts with

unlicensed dealers

– A public entity shall not accept any bid from or enter into any contract for the procurement of vehicles, with a dealer who does not possess a valid dealer’s license issued under LRS 32:1254 38

PUBLIC BID LAW Materials and Supplies

• LRS 38:2212.10 – Verification of employees involved in public contract work (

Anti-illegal alien

) – C. A private employer shall not bid on or contract with a public entity for the physical performance of services unless employer verifies in sworn affidavit that: • Employer is registered and participates in

status verification system

to verify that all employees in Louisiana are

legal citizens

• Employer shall continue, during the term of the contract, to utilize a status verification system to verify the legal status of all new employees • Employer will require subcontractors to do the same 39

PUBLIC BID LAW Bid Requirements

• LRS 38:2214 – Designation of time and place for

opening bids

; right to reject bids – A. the public entity shall, in the advertisement for bids, designate the time and place that bids will be received and shall at that time and place open the bids and read them aloud • No holidays 40

PUBLIC BID LAW Bid Requirements

• LRS 38:2214 B. – The public entity may reject any or all bids for just cause. “

Just cause

” is defined, but not limited to: – Unavailability of funds sufficient for the construction of the proposed project – Failure of any bidder to submit a bid within an established threshold of the pre-construction estimates, as part of the bid specs – A substantial change by the public entity in the scope or design of the proposed public work – A determination by public entity not to build within 12 months – The disqualification of all bidders 41

PUBLIC BID LAW Bid Requirements

• C. Bids containing obvious, unintentional, and substantial mechanical, clerical, or mathematical

errors

or errors of unintentional omission of a substantial portion of work, labor, material or services, may be withdrawn by the contractor, if clear and convincing sworn, written evidence of such errors is furnished within 48 hours of bid opening – Contractor who withdraws bid shall not be allowed to resubmit a bid on this project or work as a sub to another 42

PUBLIC BID LAW Bid Requirements

• LRS 38:2215 – Time period for

holding bids

, issuance of work

orders to commence

– A. State shall act within

30 calendar days

of such receipt to award said contract to lowest responsible bidder or reject all bids – Political Subdivisions shall act

within 45 days

– May extend period by written mutual consent of public entity and lowest responsible bidder 43

PUBLIC BID LAW Bid Requirements

• C. Upon the execution of the contract, the public entity,

within 30 days

thereafter, shall issue to the contractor a

notice to proceed

with the project.

– May extend period by written mutual consent of public entity and lowest responsible bidder 44

PUBLIC BID LAWS Contract and Bond Requirements

• LRS 38:2216 –

Written Contract and Bond

– A.(1) When any bid is accepted for the construction of any public works, a

written contract

shall be entered into by the successful bidder and the public entity – The party to whom the contract is awarded shall furnish good and

solvent bond in an amount not less than one-half of the amount of the contract

, for the faithful performance of his duties 45

PUBLIC BID LAWS Contract and Bond Requirements

– B. When any bid is accepted for the

purchase of materials or supplies, a written contract (i.e., purchase order

) shall be entered into by the successful bidder and the public entity – The party to whom the contract is awarded shall furnish good and solvent bond in an amount not less than one-half of the amount of the contract, for the faithful performance of his duties 46

PUBLIC BID LAWS Contract and Bond Requirements

• LRS 38:2216 C.(2)(a) – “

Responsible Bidder

” shall mean a contractor who: – Has an

established business

– Has

demonstrated the capability

to provide goods and services in accordance with the terms of the contract without excessive delays, extensions, cost overruns, or changes for which the contractor was held responsible –

Does not have a documented record

of past projects resulting in arbitration or litigation in which the

contractor was found to be at fault

47

PUBLIC BID LAWS Contract and Bond Requirements

• C.(1)(b) A responsible bidder shall have a

negotiable net worth

, or shall be

underwritten by an entity with a negotiable net worth

, which is equal to or exceeds the value of the total cost amount of the public contract. All property comprising the negotiable net worth shall be pledged and otherwise unencumbered for the duration of the contract 48

PUBLIC BID LAWS Contract and Bond Requirements

• LRS 38:2218 – Evidence of good faith; countersigning – A. The public entity advertising for bids for work shall require the bidders to attach a certified check, cashier’s check, or bid bond for not more than

5% of the contract price

, as evidence of good faith of the bidder – C. If a “

Bid Bond

at least an A ” is used, it shall be written by a surety or insurance company currently on the US Dept of Treasury Financial Management Service list, or by a Louisiana domiciled insurance company with rating in the latest AM Best’s Key Rating Guide 49

PUBLIC BID LAWS Contract and Bond Requirements

• LRS 38:2219 – Procurement of surety bonds and insurance – A.(1)(a) Any surety bond written for a public works project shall be written by a surety or insurance company currently on the U.S. Department of the Treasury Financial Management Service list of approved bonding companies which is published annually in the Federal Register, or by a Louisiana domiciled insurance company with at least an A- rating in the latest printing of the A.M. Best's Key Rating Guide to write individual bonds up to ten percent of policyholders' surplus as shown in the A.M. Best's Key Rating Guide, or by an insurance company that is either domiciled in Louisiana or owned by Louisiana residents and is licensed to write surety bonds. – (c) In addition, any surety bond written for a public works project shall be written by a surety or insurance company that is currently licensed to do business in the state of Louisiana. 50

PUBLIC BID LAWS Contract and Bond Requirements

• LRS 38:2221 –

Cost-plus contracts prohibited

, except for public hospitals working through qualified group purchasing organization • LRS 38:2224 – A.

Affidavit

attesting that public contract was not secured through employment or payment of solicitor. B. No public contract shall be granted to any person, corporation, firm or organization refusing to execute the affidavit required in Section A.

51

PUBLIC BID LAWS Preferences and Design Build

• LRS 38:2225 – Preference in letting contracts for public work – Gives

Louisiana resident contractors

the same

preference

percentages that might be offered by non resident contractors • LRS 38:2225.2 –

Design-Build contracts

– Neither the state nor any local entity, unless specifically authorized by law, may execute any agreement for the purchase of unimproved property which contains provisions related to the successful design and construction of a project prior to the transfer of title to the public entity – Some exceptions added post-Katrina 52

PUBLIC BID LAWS Small Business Procurement Act

• LRS 38:2233 – Part II-A.

Small Business Procurement Act

– Gives entities the authority to set-aside up to 10% of the value of anticipated procurement of goods or services for small businesses, minority-owned businesses, or women-owned businesses 53

PUBLIC BID LAWS Telecommunications and Data Processing Procurement Law • LRS 38:2234 – Part II-B. subdivision of the state • LRS 38:2236 – definitions – Data transmission facilities – Voice transmission systems – Telephone systems – Related Services – Software

Political Subdivisions Telecommunications and Data Processing Procurement Law

• LRS 38:2235 – applicable to any political – Electronic transmission facilities 54

PUBLIC BID LAWS Telecommunications and Data Processing Procurement Law • LRS 38:2237 – Methods of procurement – A. A political subdivision may lease, rent, or purchase telecommunications or data processing systems, including equipment, and related services, through a

request for proposal (RFP)

• (1) Specifications shall be prepared in advance • (1) Specs shall designate specific classes of equipment • (1) Specs can include maintenance 55

PUBLIC BID LAWS Telecommunications and Data Processing Procurement Law – (2) Lease-purchase contracts must meet certain requirements – (3) Any equipment lease-purchase contract shall contain an

annual appropriation dependence requirement

– (6)

Public notice

of the RFP shall be given at

least 30 days prior to opening of proposals

. Written notice shall be sent out to firms known to be in a position to furnish such equipment or systems. Public notice may also be given by electronic media.

56

PUBLIC BID LAWS Telecommunications and Data Processing Procurement Law – (7) the

RFP will indicate

the relative importance of price and other

evaluation factors

– (8) an award shall be made to the responsible offerer whose proposal is determined in writing by the governing authority of the political subdivision to be the

most advantageous

. No other basis of evaluation shall be used except those set out in the request for proposals 57

PUBLIC BID LAWS Telecommunications and Data Processing Procurement Law – (9) the public entity may reject all proposals – (10) the written proposal shall be incorporated into the final contract consummated with that vendor – B. Political subdivisions may, at their option, procure telecommunications and data processing equipment, systems, or related services in accordance with LRS 38:2211 (i.e.,

formal advertised bid

) 58

PUBLIC BID LAWS Other

• LRS 38:2238 –

Political Subdivisions Used Fire and Emergency Response Vehicle Procurement Law

– Allows RFPs to procure equipment and vehicles • LRS 38:2319 –

Local Government Equipment Lease-Purchase Act

– Allows leases with nonprofit lessors – Must have non-appropriations clause – Must have purchase option not exceeding $1 – Must have State Bond Commission approval 59

CODE OF ETHICS

• LRS 42:1101 – Declaration of Policy –

It is essential to the proper operation of democratic government that elected officials and public employees be independent and impartial

; that governmental decisions and policy be made in the proper channel of the governmental structure; that public office and employment not be used for private gain other than the remuneration provided by law; and that there be public confidence in the integrity of government. The attainment of one or more of these ends is impaired when a conflict exists between the private interests of an elected official or a public employee and his duties as such. The public interest, therefore, requires that the law protect against such conflicts of interest and that it establish appropriate ethical standards with respect to the conduct of elected officials and public employees without creating unnecessary barriers to public service. It is the purpose of this Chapter to implement these policies and objectives. 60

CODE OF ETHICS

• LRS 42:1102 – Definitions – (2)(a)(vi) For

public servants

of political subdivisions, it shall mean the agency in which the public servant serves, except that for members of any governing authority and for the elected or appointed chief executive of a governmental entity, it shall mean the governmental entity. Public servants of political subdivisions shall include, but shall not be limited to, elected officials and public employees of municipalities, parishes, and other political subdivisions; sheriffs and their employees; district attorneys and their employees; coroners and their employees; and clerks of court and their employees.

61

CODE OF ETHICS

– (18)(a) "

Public employee

" means anyone, whether compensated or not, who is: • (i) An administrative officer or official of a governmental entity who is not filling an elective office.

• (ii) Appointed by any elected official when acting in an official capacity, and the appointment is to a post or position wherein the appointee is to serve the governmental entity or an agency thereof, either as a member of an agency, or as an employee thereof.

• (iii) Engaged in the performance of a governmental function.

• (iv) Under the supervision or authority of an elected official or another employee of the governmental entity.

– (19) "

Public servant

" means a public employee or an elected official.

62

CODE OF ETHICS

– (22)(a) "

Thing of economic value

" means money or any other thing having economic value, except promotional items having no substantial resale value 63

CODE OF ETHICS

• LRS 42:1111 A.(1) Payments for services to the governmental entity. – No public servant shall receive anything of economic value, other than compensation and benefits from the governmental entity to which he is duly entitled, for the performance of the duties and responsibilities of his office or position 64

CODE OF ETHICS

– C. Payments for nonpublic service.

• (1) No public servant shall receive any thing of economic value for any service, the subject matter of which: – (a) Is devoted substantially to the responsibilities, programs, or operations of the agency of the public servant and in which the public servant has participated; or – (b) Draws substantially upon official data or ideas which have not become part of the body of public information.

65

CODE OF ETHICS

• (2) No public servant and no legal entity in which the public servant exercises control or owns an interest in excess of

twenty-five percent

, shall receive any thing of economic value for or in consideration of services rendered, or to be rendered, to or for any person during his public service unless such services are: – (a) Bona fide and actually performed by the public servant or by the entity; – (b) Not within the course of his official duties; – (c) Not prohibited by R.S. 42:1112 or by applicable laws or regulations governing nonpublic employment for such public servant; and – (d) Neither performed for nor compensated by any person from whom such public servant would be prohibited by R.S. 42:1115(A)(1) or (B) from receiving a gift.

66

CODE OF ETHICS

– D. Payments for

future services

. • No public servant shall receive, directly or indirectly, any thing of economic value during the term of his public service in consideration of personal services to be rendered to or for any person subsequent to the term of such public service; however, a public servant may enter into a contract for prospective employment during the term of his public service unless otherwise prohibited by R.S. 42:1116.

67

CODE OF ETHICS

– E. Payments for

rendering assistance

to certain persons.

• (1) No public servant, and no legal entity of which such public servant is an officer, director, trustee, partner, or employee, or in which such public servant has a substantial economic interest, shall receive or agree to receive any thing of economic value for assisting a person in a transaction, or in an appearance in connection with a transaction, with the agency of such public servant.

68

CODE OF ETHICS

• LRS 42:1112

Participation in certain transactions involving the governmental entity

– A. No public servant, except as provided in R.S. 42:1120, shall participate in a transaction in which he has a

personal substantial economic interest

of which he may be reasonably expected to know involving the governmental entity.

69

CODE OF ETHICS

– B.

No public servant

, except as provided in R.S. 42:1120,

shall participate in a transaction involving

in which, to his actual knowledge, any of the following persons has a substantial economic interest: • (1) Any

member

of his the governmental entity

immediate family

.

• (2) Any person in which he has a

substantial economic interest

of which he may reasonably be expected to know.

• (3) Any person of which he is an

officer, director, trustee, partner, or employee.

• (4) Any person with whom he is negotiating or has an arrangement concerning

prospective employment

.

• (5) Any person who is a party to an

existing contract

public servant, or with any legal entity in which the public servant exercises control or owns an interest in excess of with such

twenty-five percent

70

CODE OF ETHICS

– C. Every public employee, excluding an appointed member of any board or commission,

shall disqualify

himself from participating in a transaction involving the governmental entity when a violation of this Part would result. The procedures for such disqualification shall be established by regulations issued pursuant to R.S. 42:1134(A)(1).

71

CODE OF ETHICS

• LRS 42:1113.

arrangements Prohibited contractual

– A.(1)(a) No public servant, or member of such a public servant's immediate family, or legal entity in which he has a controlling interest shall bid on or enter into any contract, subcontract, or other transaction that is under the supervision or jurisdiction of the agency of such public servant.

72

CODE OF ETHICS

• LRS 42:1113.1. Gubernatorially declared emergencies or disasters;

prohibited personal use conversion

and prohibited preferences (

post-Katrina rule

) – A. During a gubernatorially declared emergency or disaster, no public servant shall convert property or resources of his governmental entity or property or resources which have been loaned to his governmental entity to or for his personal use.

– B. During a gubernatorially declared emergency or disaster, no public servant shall offer, loan, or donate the property or resources of his governmental entity or property or resources which have been loaned to his governmental entity to or for the use of members of his immediate family in a manner which is preferential to members of his immediate family over members of the general public.

73

CODE OF ETHICS

• LRS 42:1114. derived;

Financial disclosure

– A. Other than a legislator, applicable; and

each public servant

and each member of his immediate family who derives any thing of economic value, directly, through any transaction involving the agency of such public servant or who derives any thing of economic value of which he may be reasonably expected to know through a person which (1) is regulated by the agency of such public servant, or (2) has bid on or entered into or is in any way financially interested in any contract, subcontract, or any transaction under the supervision or jurisdiction of the agency of such public servant shall disclose the following: • (1) The amount of income or value of any thing of economic value • (2) The nature of the business activity; • (3) Name and address, and relationship to the public servant, if • (4) The name and business address of the legal entity, if applicable.

74

CODE OF ETHICS

– C.(1) Other than a legislator,

each elected official

, his spouse, and any business enterprise in which he has a substantial economic interest, who derives anything of economic value through a contract or other subcontract from the state or any political subdivision shall disclose the following: • (a) The amount of income or value of anything of economic value derived; • (b) The nature of the business activity; • (c) The name and address, and relationship to the elected official, if applicable; and • (d) The name and business address of the political subdivision, if applicable.

75

CODE OF ETHICS

• LRS 42:1115.

Gifts

– A. No public servant shall solicit or accept, directly or indirectly, any thing of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public servant knows or reasonably should know that such person: • (1) Has or is seeking to obtain contractual or other business or financial relationships with the public servant's agency, or • (2) Is seeking, for compensation, to influence the passage or defeat of legislation by the public servant's agency.

76

CODE OF ETHICS

– B. No public employee shall solicit or accept, directly or indirectly, anything of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public employee knows or reasonably should know that such person: • (1) Conducts operations or activities which are regulated by the public employee's agency.

• (2) Has substantial economic interests which may be substantially affected by the performance or nonperformance of the public employee's official duty.

77

CODE OF ETHICS

• LRS 42:1115.1.

Limitation on food, drink, and refreshment

– A. No person from whom a public servant is prohibited by R.S. 42:1111 or 1115(A) from receiving a thing of economic value shall give to such a public servant any food, drink, or refreshment the

event

given. The total value of the food, drink, or

total value of which exceeds fifty dollars for a single

at which food, drink, or refreshment is refreshment given to a public servant at any single event shall not exceed fifty dollars regardless of the number of persons subject to the provisions of this Subsection giving food, drink, or refreshment to the public servant at the single event.

78

CODE OF ETHICS

– C. Beginning on July 1, 2009, and on July first of each year thereafter, when there has been an increase in the unadjusted

Consumer Price Index

42:1134(A).

(CPI-U)( Food and Beverage) as published by the United States Department of Labor, Bureau of Labor Statistics in January each year, the limit of fifty dollars for food, drink or refreshments provided in Subsections A and B of this Section shall be increased by the same percentage as the percentage by which that price index is increased. The amount of the increase shall be rounded off to the nearest dollar. The food, drink, or refreshment limit shall be adjusted by the Board of Ethics according to the Consumer Price Index (CPI-U)(Food and Beverage) and adopted and promulgated as a rule or regulation by the board in accordance with the provisions of R.S. 79

CODE OF ETHICS

– D. For purposes of this Section, at an event to which a group or organization of public servants is invited and at which food, drink, or refreshment is given, the

value

of the food, drink, or refreshment provided to a public servant shall be

determined by dividing the total cost

of the food, drink, and refreshment provided at the event

by the total number of persons invited

, whether formally or informally, and which is communicated in any manner or form, to the event.

80

CODE OF ETHICS

• LRS 42:1116.

Abuse of office

– A.

No public servant shall

use the authority of his office or position, directly or indirectly, in a manner intended to

compel or coerce

person or other public servant

to provide

any

himself

, any other public servant, or other person

with any thing of economic value

. 81

CODE OF ETHICS

– B. No public servant shall use the authority of his office or position, directly or indirectly, in a manner intended to compel or coerce any person or other public servant to engage in political activity. For the purposes of this Subsection, "

political activity

" means an effort to support or oppose the election of a candidate for political office in an election. This Subsection shall not be construed to limit that authority authorized by law, statute, ordinance, or legislative rule in carrying out official duties.

82

CODE OF ETHICS

• LRS 42:1119.

Nepotism

– A. No member of the immediate family of an agency head shall be employed in his agency.

– B.(1) No member of the immediate family of a member of a governing authority or the chief executive of a governmental entity shall be employed by the governmental entity.

– (2) Notwithstanding the provisions of Paragraph (1) of this Subsection: • Long list of exceptions 83

CODE OF ETHICS

• LRS 42:1120.

Recusal from voting

– If any elected official, in the discharge of a duty or responsibility of his office or position, would be required to vote on a matter which vote would be a violation of R.S. 42:1112, he

shall recuse himself

from voting. An elected official who recuses himself from voting pursuant to this Section

shall not be prohibited from participating in discussion and debate concerning the matter

, provided that he makes the disclosure of his conflict or potential conflict a part of the record of his agency prior to his participation in the discussion or debate and prior to the vote that is the subject of discussion or debate.

84

CODE OF ETHICS

• LRS 42:1121. Assistance to certain persons after termination of public service – A.(1) No

former agency head or elected official

shall, for a

period of two years

following the termination of his public service as the head of such agency or as an elected public official serving in such agency, assist another person, for compensation, in a transaction, or in an appearance in connection with a transaction, involving that agency or render any service on a contractual basis to or for such agency.

85

CODE OF ETHICS

– A.(2) No

former member of a board or commission

shall, for a

period of two years

following the termination of his public service on such board or commission, contract with, be employed in any capacity by, or be appointed to any position by that board or commission.

86

CODE OF ETHICS

– B.(1)

General rule for other public employees

. • No

former public employee

shall, for a

period of two years

following the termination of his public employment, assist another person, for compensation, in a transaction, or in an appearance in connection with a transaction in which such former public employee participated at any time during his public employment and involving the governmental entity by which he was formerly employed, or for a period of two years following termination of his public employment, render, any service which such former public employee had rendered to the agency during the term of his public employment on a contractual basis, regardless of the parties to the contract, to, for, or on behalf of the agency with which he was formerly employed.

87

LAWS AFFECTING BUDGETING

• LRS 39:1301 Louisiana Local Government Budget Act 88

LAWS AFFECTING BUDGETING

• LRS 39:1302. Definitions. For the purposes of this Chapter: • (1) "

Political subdivision

" means any: – (a) Parish governing authority and all districts, boards, or commissions created by such parish governing authority either independently or in conjunction with other units of government.

– (b) Municipality and all boards and commissions created by such municipality, either independently or in conjunction with other units of government.

– (c) School board.

– (d) Special district created pursuant to and under the authority of Article VI, Section 16 or 19 of the Louisiana Constitution.

– (e) City court.

89

LAWS AFFECTING BUDGETING

– (f) District public defender office.

– (g) Housing authority.

– (h) Mortgage authority.

– (i) Political subdivisions of the state not included within the state's Comprehensive Annual Financial Reports.

– (j) Registrar of voters.

– (k) Independently elected parish offices, including the office of assessor, clerk of district court, coroner, district attorney, sheriff, and judges, but only insofar as their judicial expense funds, as provided for in Title 13 of the Louisiana Revised Statutes of 1950.

90

• LRS 39:1303. Legislative intent – A. It is the intent of the legislature that this Chapter shall apply, as provided for herein, to all political subdivisions of the state with a

general fund or a special revenue fund

, except that the provisions of R.S. 39:1307 related to

public participation shall only apply to those political subdivisions with proposed expenditures totaling five hundred thousand dollars or more in such funds

more stringent penalties for violations.

. – The provisions of this Chapter shall be construed as minimal requirements and shall not prevent a political subdivision from requiring more extensive financial planning and budgeting practices nor from imposing 91

LAWS AFFECTING BUDGETING

– B.

Preparation and adoption

of a budget by a political subdivision in any manner

contrary to the provisions of this Chapter prohibited

.

is hereby

expressly

– D.

The provisions of this Act shall apply to school boards only if and when they do not conflict with R.S. 17:88(A).

92

LAWS AFFECTING BUDGETING

• LRS 39:1304.

Uniform chart of accounts

– A. The

legislative auditor

shall develop a uniform chart of accounts for use by political subdivisions in recording of all financial transactions. See:

http://www.lla.la.gov/userfiles/file/chart.pdf

– B. The legislative auditor is authorized to create political subdivision categories for the purpose of carrying out the provisions of this Section. 93

LAWS AFFECTING BUDGETING

• LRS 39:1305.

Budget preparation

– A.

Each political subdivision

shall cause to be prepared a comprehensive budget presenting a complete financial plan for each fiscal year for the

general fund

and

each special revenue fund.

– B. The

chief executive or administrative officer

of the political subdivision or, in the absence of such positions, the equivalent thereof

shall prepare

the proposed budget.

94

LAWS AFFECTING BUDGETING

– C. The budget document setting forth the proposed financial plan for the

general fund and each special revenue fund

shall include the following: • (1) A

budget message

signed by the budget preparer which shall include a summary description of the proposed financial plan, policies, and objectives, assumptions, budgetary basis, and a discussion of the most important features.

95

LAWS AFFECTING BUDGETING

• (2)(a) A

statement for the general fund and each special revenue fund

showing: – the estimated fund balances at the beginning of the year; – estimates of all receipts and revenues to be received; – revenues itemized by source; – recommended expenditures itemized by agency, department, function, and character; – other financing sources and uses by source and use; – and the estimated fund balance at the end of the fiscal year. 96

LAWS AFFECTING BUDGETING

– Such statements shall also include a clearly presented side-by-side detailed comparison of such information for the current year, including » the fund balances at the beginning of the year, » year-to-date actual receipts and revenues received and » estimates of all receipts and revenues to be received the remainder of the year; » estimated and actual revenues itemized by source; » year-to-date actual expenditures and 97

LAWS AFFECTING BUDGETING

» estimates of all expenditures to be made the remainder of the year itemized by agency, department, function, and character; » other financing sources and uses by source and use, both year-to-date actual and estimates for the remainder of the year; » the year-to-date actual and estimated fund balances as of the end of the fiscal year; » and the percentage change for each item of information.

98

LAWS AFFECTING BUDGETING

• SAMPLE – JPSO BUDGET 99

LAWS AFFECTING BUDGETING

• (b)

School boards

shall itemize revenues and expenditures in accordance with guidance provided by the state Department of Education.

100

LAWS AFFECTING BUDGETING

– D. A budget proposed for consideration by the governing authority shall be accompanied by a

proposed budget adoption instrument

. • The budget adoption instrument for

independently elected parish offices

shall

consist of a letter

from the independently elected official authorizing the implementation of the adopted budget. • The budget adoption instrument for any

municipality, parish, school board, or special district

shall be an

appropriation ordinance, adoption resolution, or other legal instrument

necessary to adopt and implement the budget document. 101

LAWS AFFECTING BUDGETING

• The adoption instrument shall define the authority of the chief executive and administrative officers of the political subdivision

to make changes within various budget classifications without approval

by the governing authority, as well as those powers reserved solely to the governing authority.

– E. The total of proposed

expenditures shall not exceed

the total of estimated

funds available

for the ensuing fiscal year.

102

LAWS AFFECTING BUDGETING

• LRS 39:1306.

Completion and submission of the proposed budget

– A. The proposed budget for political subdivisions with a governing authority including municipalities, parishes, school boards, and special districts shall be completed and submitted to the governing authority of that political subdivision and made available for public inspection as provided for in R.S. 39:1308 no later than

fifteen days prior

to the beginning of each fiscal year except that: • (1) The proposed budget for a required in R.S. 17:88(A).

school board

shall be completed and submitted to the school board and made available for such public inspection no later than fifteen days prior to the date for budget adoption by school boards as 103

LAWS AFFECTING BUDGETING

• (2) The proposed budget for a

parish

shall be completed and submitted to the parish governing authority and made available for such public inspection

prior to the fifteenth day of the fiscal year for which the budget is to be applicable

.

104

LAWS AFFECTING BUDGETING

– B. The proposed budget for a

registrar of voters and independently elected parish offices including the office of assessor, clerk of district court, coroner, district attorney, and sheriff

shall be completed and made available for public inspection as provided for in R.S. 39:1308 no later than

fifteen days prior

to the beginning of each fiscal year.

105

LAWS AFFECTING BUDGETING

• LRS 39:1307.

Public participation (only if > $500,000 budget)

– A. Political subdivisions with total proposed expenditures of five hundred thousand dollars or more from the general fund and any special revenue funds in a fiscal year or other similar budgetary period

shall afford the public an opportunity to participate

in the budgetary process prior to adoption of the budget.

106

LAWS AFFECTING BUDGETING

– B. Upon completion of the proposed budget and, if applicable, its submission to the governing authority, the political subdivision

shall cause to be published a notice

stating that the proposed budget is available for

public inspection

. – The notice shall also state that a

public hearing

the proposed budget shall be held with the

date,

on

time, and place of the hearing

notice. specified in the – The notice shall be

published at least ten (10) days prior to the date of the first public hearing

. Where applicable, publication shall be in the official journal of the political subdivision. 107

LAWS AFFECTING BUDGETING

• JUNE 30 FISCAL YEAR – BUDGET DATES FOR JPSO (SHERIFF) –

PUBLIC NOTICE/ADVERTISEMENT – MAY 25 TH

(must be at least 10 days prior to 1 st public hearing) –

PUBLIC INSPECTION – JUNE 10 TH

at least 15 days prior to 6/30) (must be –

PUBLIC HEARING – JUNE 25 TH

(must be completed prior to beginning of fiscal year) 108

LAWS AFFECTING BUDGETING

– C.

No proposed budget shall be considered

for adoption or otherwise finalized

until at least one public hearing has been conducted

on the proposal. Nothing herein shall prohibit one or more political subdivisions from conducting joint public hearings.

– D. The political subdivision

shall certify completion

of all action required by this Section by publishing a notice in the same manner as is herein provided for the notice of availability of the proposed budget and public hearing.

109

LAWS AFFECTING BUDGETING

• LRS 1308. Inspection of the proposed budget – A. The proposed budget of a political subdivision shall be available for public inspection at the following locations: • (1) Municipalities: at the office of the mayor or municipal governing authority.

• (2) School boards: at the school board office.

• (3) Special districts: at the office of the governing authority of the special district.

• (4) All other political subdivisions: at the office of the individual political subdivision.

• (5) In cases where the political subdivision is located within the boundaries of more than one parish, the proposed budget shall be available at the office of the parish governing authority of each parish.

110

LAWS AFFECTING BUDGETING

• LRS 1309.

Adoption

– A. All action necessary to adopt and otherwise finalize and implement the budget for a fiscal year shall be taken in open meeting and completed

before the end of the prior fiscal year

except that: • (1) All action necessary to adopt and otherwise finalize and implement the proposed budget for a 17:88(A).

school board

shall be taken in open meeting and completed prior to the date for budget adoption by school boards, as required by R.S. • (2) All action necessary to adopt and otherwise finalize and implement the proposed budget for a

parish

shall be taken in open meeting and completed

prior to the thirtieth day of the fiscal year for which the budget is to be applicable.

111

LAWS AFFECTING BUDGETING

– B. The

adopted budget shall be balanced

with approved expenditures not exceeding the total of estimated funds available.

– C. The adopted budget

shall contain the same information as that required for the proposed budget according to R.S. 39:1305(C)

for the proposed budget.

112

LAWS AFFECTING BUDGETING

– D. Upon adoption, certified copies of the budget and adoption instrument shall be transmitted to and

retained by the chief executive or administrative officer

as required by R.S. 39:1313.

113

LAWS AFFECTING BUDGETING

• LRS 1310.

Amending the budget

– A. When the

governing authority

has received notification pursuant to R.S. 39:1311, or there has been a change in operations upon which the original adopted budget was developed, • the governing authority shall adopt a budget amendment in an open meeting to reflect such change. 114

LAWS AFFECTING BUDGETING

- When an

independently elected parish official

has received notification pursuant to R.S. 39:1311(A), or when there has been a change in operations upon which the original adopted budget was developed, the independently elected official shall adopt a budget amendment and publish such amendment in the official journal as described by R.S. 39:1307(B).

In no event shall a budget amendment be adopted proposing expenditures which exceed the total of estimated funds available for the fiscal year

.

115

LAWS AFFECTING BUDDGETING

• LRS 1311. Budgetary authority and control – A. The adopted budget and any duly authorized adopted amendments shall form the framework from which the chief executive or administrative officers and members of the governing authority of the political subdivision shall monitor revenues and control expenditures. 116

LAWS AFFECTING BUDGETING

– The chief executive or administrative officer for a political subdivision subject to public participation as provided in R.S. 39:1307 shall advise the governing authority or independently elected official in writing when: • (1) Total

revenue and other sources

plus projected revenue and other sources for the remainder of the year, within a fund, are failing to meet total budgeted revenues and other sources by

five percent

or more.

• (2) Total actual by

five percent expenditures and other uses

or more.

fund balance

beginning fund balance by

five percent

is being used to fund current year expenditures.

plus projected expenditures and other uses for the remainder of the year, within a fund, are exceeding the total budgeted expenditures and other uses • (3) Actual beginning, within a fund, fails to meet estimated or more and fund balance 117

LAWS AFFECTING BUDGETING

– B. The written notification as required by this Section as well as any responsive action taken by the governing authority or independently elected official shall be transmitted to and retained by the chief executive or administrative officer. The written notification as required by this Section and the resulting budget amendment shall only be statutorily required for a special revenue fund with anticipated expenditures that equal or exceed five hundred thousand dollars. Furthermore, only the written notification of Paragraph (A)(2) of this Section shall be required for special revenue funds whose revenues are expenditure driven.

118

LAWS AFFECTING BUDGETING

– C. The

adopted budget

and any duly authorized amendments required by this Section

shall constitute the authority

of the chief executive or administrative officers of the political subdivision

to incur liabilities and authorize expenditures

from the respective budgeted funds during the fiscal year.

119

LAWS AFFECTING BUDGETING

• LRS 1312. Governing authority's

failure to make appropriation

– If, at the end of any fiscal year, the appropriations necessary for the support of the political subdivision for the ensuing fiscal year have not been made, then

fifty percent

of the amounts appropriated in the appropriation ordinance or resolution for the last completed fiscal year shall be deemed reappropriated for the several objects and purposes specified in such appropriation ordinance or resolution.

120

LAWS AFFECTING BUDGETING

• LRS 1313.

Budget filing

– The chief executive or administrative officer shall retain and file certified copies of the adopted budget, budget adoption instrument, duly authorized budget amendments, and copies of supporting schedules and correspondence related to the budget at the domicile of the governing authority.

121

LAWS AFFECTING BUDGETING

• LRS 1314.

Emergencies

– Nothing shall prohibit the expenditure of funds in cases of emergency. For purposes of this Section, "an emergency" means an unforeseen event bringing with it destruction or injury of life or property or the imminent threat of such destruction or injury.

122

LAWS AFFECTING BUDGETING

• LRS 1315.

Violations

– A. Except as provided in R.S. 39:1314, any public official or officer that violates, either knowingly or intentionally, the provisions of R.S. 39:1305(E), either through the adoption of an original budget or through amendment to a legally adopted budget, shall be a violation of R.S. 14:134 (

MALFEASANCE

) and shall be subject to the penalties contained therein.

123

LAWS AFFECTING BUDGETING

•

State Budgets

– LRS 39:34 – Executive Budget – LRS 39:35 – Duties of Governor in Preparing the Executive Budget – LRS 39:36 – Contents and Format of Executive Budget – LRS 39:37 – Executive Budget to be Printed and Distributed – LRS 39:38 – Additional Proposals 124

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• LRS 24:515. Accounts of offices, boards, commissions, agencies, and departments; records of general fixed assets – A. All auditees shall designate or provide

an office

for their secretary, treasurer, or principal finance officer

where their books and records must be kept.

– All accounts of such public funds shall be kept in the form prescribed by the legislative auditor and he shall have the authority to install a system of accounting in any office which he is authorized to examine and audit. – Any failure of any auditee to furnish the legislative auditor with any information requested shall be immediately reported to the Legislative Audit Advisory Council which shall take such action as it may deem proper. 125

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– (2) The records required to be maintained by Paragraph (l) hereof for

state government

shall be prepared on forms and conform to procedures developed and established by the

division of administration

in accordance with the Administrative Procedure Act. 126

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• LRS 24:513. Powers and duties of legislative auditor; audit reports as public records; assistance and opinions of attorney general; frequency of audits; subpoena power – A.(1)(a) Subject to Paragraph (3) of this Subsection, the legislative auditor shall have authority to compile financial statements and to examine, audit, or review the books and accounts of the state treasurer, all public boards, commissions, agencies, departments, political subdivisions of the state, public officials and employees, public retirement systems enumerated in R.S. 11:173(A), municipalities, and all other public or quasi public agencies or bodies, hereinafter collectively referred to as the "auditee". 127

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– The scope of the examinations may include financial accountability, legal compliance and evaluations of the economy, efficiency, and effectiveness of the auditee's programs or any combination of the foregoing. – In addition to the authority granted above, the legislative auditor shall have access to and be permitted to examine all papers, books, accounts, records, files, instruments, documents, films, tapes, and any other forms of recordation of all auditees, including but not limited to computers and recording devices, and all software and hardware which hold data, is part of the technical processes leading up to the retention of data, or is part of the security system. – This access shall not be prohibited by Paragraph (3) of this Subsection.

128

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– (b) For the sole purpose of this Subsection, a

quasi public agency or body

is defined as: • (i) An organization, either not-for-profit or for profit, created by the state of Louisiana or any political subdivision or agency thereof, any special district or authority, or unit of local government to perform a public purpose.

• (ii) An organization, either not-for-profit or for profit, that is a component unit of a governmental reporting entity, as defined under generally accepted accounting principles.

129

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• (iii) An organization, either not-for-profit or for profit, created to perform a public purpose and having one or more of the following characteristics: – (aa) The governing body is elected by the general public.

– (bb) A majority of the governing body is appointed by or authorized to be appointed by a governmental entity or individual governmental official as a part of his official duties.

– (cc) The entity is the recipient of the proceeds of an ad valorem tax or general sales tax levied specifically for its operations.

– (dd) The entity is able to directly issue debt, the interest on which is exempt from federal taxation.

– (ee) The entity can be dissolved unilaterally by a governmental entity and its net assets assumed without compensation by that governmental entity.

– (iv) Any not-for-profit organization that receives or expends any local or state assistance in any fiscal year. 130

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– The financial statements of individual

state agencies, departments, boards, and commissions that are included within the state's Comprehensive Annual Financial Report

shall be

audited by the legislative auditor

, but

may be audited by a licensed certified public accountant

pursuant to the provisions of Subsection A of this Section. 131

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– The financial statements of the offices of the

independently elected public local officials

, including: judges, sheriffs, clerks of court, assessors, and district attorneys, all parish governing authorities and all districts, boards, and commissions created by parish governing authorities either independently or in conjunction with other units of government, school boards, district public defender offices, municipalities, and all boards and commissions created by municipalities, either independently or in conjunction with other units of government, city courts, quasi public agencies, housing authorities, mortgage authorities, or other political subdivisions of the state not included within the state's Comprehensive Annual Financial Reports, hereinafter collectively referred to as "local auditee",

shall be audited or reviewed by licensed certified public accountants

subject to Paragraphs (5) and (6) of this Subsection,

but may be audited by the legislative auditor

pursuant to Paragraph (4) of this Subsection. 132

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• Any person authorized to conduct an audit of a governmental entity pursuant to R.S. 37:77, shall be permitted to continue auditing that governmental entity subject to the approval of the legislative auditor provided for in Paragraphs (5) and (6) of this Subsection. • See Legislative Auditor Local Engagement Approval Form:

http://204.196.254.19/llaengagementapprval.n

sf/engagementform1

133

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– (5)(a)(i) In lieu of examinations of the records and accounts of any office subject to audit or review by the legislative auditor, the legislative auditor may, at his discretion, accept an audit or review report prepared by a licensed certified public accountant, provided that such audit or review is performed in accordance with generally accepted governmental auditing standards and the Louisiana Governmental Audit Guide, which is to be jointly published by the legislative auditor and the Society of Louisiana Certified Public Accountant's Governmental Accounting and Auditing Committee, and further provided that the legislative auditor has approved the engagement letter in accordance with this Section. 134

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– The

Louisiana Governmental Audit Guide

is a standard for audits and reviews of auditees within Louisiana and

shall be produced by the society and the legislative auditor

, with input from the Louisiana Municipal Association, the Louisiana Police Jury Association, the Louisiana School Board Association, and any other interested parties. – See: •

http://www.lla.la.gov/userfiles/file/lagag2.pdf

135

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– Such audits shall be completed within

six months

year. of the close of the entity's fiscal – Reviews shall be conducted in accordance with the authoritative pronouncements issued by the American Institute of Certified Public Accountants and guidance provided in the Louisiana Governmental Audit Guide. 136

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– For the limited purpose of providing the audits and reviews as provided in this Subsection, the certified public accountant shall have the access and assistance privileges afforded the legislative auditor in R.S. 24:513(E) and (I). However, the certified public accountant shall comply with any and all restrictions imposed by law on documents, data, or information deemed confidential by law and furnished to the certified public accountant during the course of the audit or review.

137

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• (ii) At any time

after a disaster or emergency

is declared under the provisions of R.S. 29:724(B)(1) which prevents an entity from completing its report within the period prescribed in R.S. 24:513(A)(5)(i), the entity may ask the legislative auditor in writing for an

extension of time to complete the report.

The legislative auditor may approve the request at his discretion, subject to the approval of the Legislative Audit Advisory Council.

• See:

http://app1.lla.state.la.us/ExtensionReq.nsf/Ext ensionForm?OpenForm

138

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– B.(1) The accounts and records of each

sheriff, in his function as ex officio tax collector

, shall be audited in accordance with the provisions of this Section

not less than once every year

. Upon request, the tax collector shall provide the legislative auditor with a

sworn statement

of the amounts of cash on hand and taxes collected for the current year, with an itemized statement of all taxes assessed and uncollected. The statement shall indicate the reason for his failure to collect. •

NEW REQUIREMENT BEING IMPLEMENTED BY LSA

139

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– J.(1) The audits enumerated in Subsection A of this Section shall be conducted frequently enough to control and safeguard the assets of the auditee as follows: • (a)(i) The financial statements of the

state of Louisiana shall be audited annually

. The financial statements of individual state agencies, departments, boards, and commissions shall be audited at least once every two years, to include the transactions of both years. However, the financial statements of individual state agencies, departments, boards, and commissions that compose a material part of the state's financial statements, as determined by the legislative auditor, shall be subjected to audit tests annually.

140

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• (b) The accounts and financial statements of

parish tax collectors

shall be

audited annually

.

141

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• (c) The financial statements of

local auditees

, as defined in Paragraph A(3) of this Section, shall be audited as follows: – (i)(aa) Any local auditee who received revenues »

<$50,000

= no audit, certification required »

>$50,000 and < $200,000

= annual compilation of its financial statements, with or without footnotes »

>$200,000 and <$500,000

= an annual review of its financial statements to be accompanied by an attestation report »

>$500,000

= audited annually.

142

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– K. Whoever violates the provisions of this Section

shall be fined not more than one thousand dollars

and shall be deemed

guilty of malfeasance and gross misconduct in office

, and shall be

subject to removal

.

143

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– L. Notwithstanding the provisions of Subsection B of this Section or of any other provision of law to the contrary, a

sheriff and ex-officio tax collector shall have the option of having the annual and biennial audits of his office

as provided in Subparagraphs (J)(1)(b) and (c) of this Section conducted either

accountant by the legislative auditor or by a private certified public

pursuant to the provisions of this Section.

144

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– M.(1) In the performance of his duties the legislative auditor, or any member of his staff designated by him, may compel the production of public and private books, documents, records, papers, films, tapes, and electronic data processing media. – For such purpose the legislative auditor and the chairman of the Legislative Audit Advisory Council

may jointly issue a subpoena

for the production of documentary evidence to compel the production of any books, documents, records, papers, films, tapes, and electronic data processing media regarding any transaction involving a governmental entity. 145

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• LRS 24:514. Sworn annual financial statements; actuarial valuations; examinations – A. The auditees and local auditees referred to in R.S. 24:513 shall furnish to the legislative auditor, annually, sworn annual financial statements.

– B.(1) The annual sworn financial statements required under this Section shall be prepared in accordance with generally accepted accounting principles and include such disclosures required by state and federal regulations, except as provided by Paragraphs (2) and (3) of Subsection B of this Section. The statements required by this Section shall include a recital that the financial statements present fairly, in all material respects, the financial condition and results of operations of the auditee; that the entity has maintained a system of internal control structure sufficient to safeguard assets and comply with laws and regulations; and that the entity has complied with all laws and regulations, or shall acknowledge exceptions thereto.

146

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– B.(3) The annual financial statements of the state of Louisiana shall be prepared in accordance with generally accepted accounting principles. 147

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– C.

No officer shall destroy any voucher or other paper

belonging to his office before it has been examined by the legislative auditor or certified public accountant authorized to perform an audit in lieu of the legislative auditor.

– D. In addition to furnishing the annual sworn statements under Subsection A of this Section,

all state, municipal, and parochial retirement systems funded in whole or part out of public funds shall furnish to the legislative auditor, annually, actuarial valuations.

• Such actuarial valuations shall be submitted to the legislative auditor between 1 st and 120 th day following the close of the fiscal year of the retirement system.

148

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– E.(1) The annual sworn financial statements required under Subsection A of this Section shall be furnished to the legislative auditor between the 1 st and 90 th day following the close of the accounting year, provided that individual state agencies shall file annual financial statements within the time frame prescribed by the commissioner of administration.

149

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– F.(1) The annual sworn financial statements required under the provisions of this Section

shall not be filed

by the reporting agency

if the agency has filed an approved engagement agreement

with the legislative auditor within 60 days of the close of the fiscal year

to conduct an audit of its funds by a certified public accountant

, the legislative auditor has approved the terms and conditions of the engagement agreement as authorized by R.S. 24:513, and the engagement agreement includes the period of the required report 150

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

• LRS 24:516. Reports – A.(1) The legislative auditor shall file copies of all audit reports released by his office with the governor, the attorney general, and the office investigated. – For purposes of public inspection, the legislative auditor shall file copies of all audit reports prepared by his office or accepted by the legislative auditor pursuant to R.S. 24:513(A) and R.S. 46:1064(B) with the clerk of court of the parish within which the office investigated is domiciled. – Such copies may be filed electronically; however, the legislative auditor shall make actual paper copies of such reports available to any of these officials upon their request.

151

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– A.(2) All such reports shall call attention to those matters required by governmental auditing standards, including

reportable conditions, failure to comply with laws and regulations, and such additional matters that may be included in a management letter

. – Reports shall make

specific recommendations

for future avoidance together with management's response. 152

ACCOUNTING, AUDITING, AND FINANCIAL REPORTING LAWS

– If the report discloses any

alleged criminal acts

by any public officer or employee, the legislative auditor

shall furnish an additional copy of the report to the district attorney

of the parish where the offense was committed.

153

MEETINGS

• LRS 42:11. Short title – This Chapter shall be known and may be cited as the "

Open Meetings Law

".

• LRS 42:12. Public policy for open meetings; liberal construction – A. It is essential to the maintenance of a democratic society that public business be performed in an open and public manner and that the citizens be advised of and aware of the performance of public officials and the deliberations and decisions that go into the making of public policy.

Toward this end, the provisions of this Chapter shall be construed liberally

.

– B. Further, to advance this policy, all public bodies shall post a copy of this Chapter.

154

MEETINGS

• LRS 42:13. Definitions – A. For the purposes of this Chapter: • (1) "

Meeting

" means the

convening of a quorum of a public body to deliberate or act on a matter over which the public body has supervision

,

control, jurisdiction, or advisory power

. It shall also mean the convening of a quorum of a public body by the public body or by another public official to receive information regarding a matter over which the public body has supervision, control, jurisdiction, or advisory power.

155

MEETINGS

– (2) "

Public body

" means village, town, and city

governing authorities

; parish governing authorities; school boards and boards of levee and port commissioners; boards of publicly operated utilities; planning, zoning, and airport commissions; and any other state, parish, municipal, or special district boards, commissions, or authorities, and those of any political subdivision thereof, where such body possesses policy making, advisory, or administrative functions, including any committee or subcommittee of any of these bodies enumerated in this paragraph.

156

MEETINGS

– (3) "

Quorum

" means a simple majority of the total membership of a public body.

• B. The provisions of this Chapter

shall not apply to chance meetings or social gatherings

of members of a public body at which there is no vote or other action taken, including formal or informal polling of the members.

157

MEETINGS

• LRS42:14. Meetings of public bodies to be open to the public – A.

Every meeting of any public body shall be open to the public unless closed pursuant to R.S. 42:16, 17, or 18.

– B. Each public body shall be

prohibited from utilizing any manner of proxy voting procedure, secret balloting

, or any other means to circumvent the intent of this Chapter.

158

MEETINGS

– C. All votes made by members of a public body shall be

viva voce and shall be recorded in the minutes

, journal, or other official, written proceedings of the body, which shall be a public document.

159

MEETINGS

– D. Except school boards, which shall be subject to R.S. 42:15,

each public body conducting a meeting

which is subject to the notice requirements of R.S. 42:19(A)

shall allow a public comment period at any point in the meeting prior to action on an agenda item upon which a vote is to be taken

. – The governing body

may adopt reasonable rules and restrictions

regarding such comment period (i.e., 3 minutes per issue) 160

MEETINGS

• LRS 42:15.

School board meetings; public comment

– A. Each school board subject to the provisions of this Chapter, except Orleans,

to taking any vote

item.

shall allow public comment at any meeting of the school board prior

. The comment period shall be for each agenda item and shall precede each agenda – C. For purposes of this Section,

shall not suffice a comment period for all comments at the beginning of a meeting

to meet the requirements of Subsection A or Subsection B of this Section.

161

MEETINGS

• LRS 42:16.

Executive Sessions

– A public body may hold executive sessions upon an affirmative vote, taken at an open meeting for which notice has been given pursuant to R.S. 42:19, of two thirds of its constituent members present. – An executive session shall be limited to matters allowed to be exempted from discussion at open meetings by R.S. 42:17; however, no final or binding action shall be taken during an executive session. – The vote of each member on the question of holding such an executive session and the reason for holding such an executive session shall be recorded and entered into the minutes of the meeting 162

MEETINGS

• LRS 42:17. • (2)

Exceptions to open meetings

– A. A public body may hold an executive session pursuant to R.S. 42:16 for one or more of the following reasons: • (1) Discussion of the

character, professional competence, or physical or mental health of a person

such person is notified in writing at least twenty-four hours before the meeting and that such person may require that such discussion be held at an open meeting.

Strategy sessions

, provided that or negotiations with respect to

collective bargaining

of action regarding , prospective position of the public body.

litigation

after formal written demand, or litigation when an open meeting would have a detrimental effect on the bargaining or litigating • (3) Discussion regarding the report, development, or course

security personnel, plans, or devices

.

163

MEETINGS

• (4)

Investigative proceedings

allegations

of misconduct

.

regarding • (5) Cases of

extraordinary emergency

, which shall be limited to natural disaster, threat of epidemic, civil disturbances, suppression of insurrections, the repelling of invasions, or other matters of similar magnitude.

• (7) Discussions between a city or parish

school board and individual students or the parents

or tutors of such students, or both, who are within the jurisdiction of the respective school system, regarding problems of such students or their parents or tutors; provided however that any such parent, tutor, or student may require that such discussions be held in an open meeting.

164

MEETINGS

• (8) Presentations and discussions at meetings of

civil service boards

of test questions, answers, and papers produced and exhibited by the office of the state examiner, municipal fire and police civil service, pursuant to R.S. 33:2492 or 2552.

• (9) The portion of any meeting of the Second Injury Board during which records or matters regarding the settlement of a

workers' compensation claim

are required to be considered or discussed by the board with its staff in order to grant prior written approval as required by R.S. 23:1378(A)(8).

• (10) Or

any other matters

now provided for or as may be provided for by the legislature.

165

MEETINGS

– C. The provisions of this Chapter shall not prohibit the removal of any person or persons who willfully disrupt a meeting to the extent that orderly conduct of the meeting is seriously compromised.

166

MEETINGS

• LRS 42:19. Notice of meetings – A.(1)(a) All public bodies, except the legislature and its committees and subcommittees,

shall give written public notice of their regular meetings, if established by law, resolution, or ordinance, at the beginning of each calendar year. Such notice shall include the dates, times, and places of such meetings

.

– (b)(i) All public bodies, except the legislature and its committees and subcommittees, shall give written public notice of any regular, special, or rescheduled meeting

no later than 24 hours before the meeting

.

167

MEETINGS

– (b)(ii) Such

notice shall include

the

agenda, date, time, and place of the meeting

, provided that upon unanimous approval of the members present at a meeting of a public body, the public body may take up a matter not on the agenda. – Any such matter shall be identified in the motion to take up the matter not on the agenda with reasonable specificity, including the purpose for the addition to the agenda, and entered into the minutes of the meeting. – Prior to any vote on the motion to take up a matter not on the agenda by the public body, there shall be an opportunity for public comment on any such motion in accordance with R.S. 42:14 or 15. – The public body shall not use its authority to take up a matter not on the agenda as a subterfuge to defeat the purposes of this Chapter.

168

MEETINGS

• LRS 42:20. Written minutes – A. All public bodies

shall keep written minutes

of their open meetings. of all – The minutes of all other public bodies shall include but need not be limited to: • (1) The

date, time, and place

of the meeting.

• (2) The

members of the public body present or absent

.

recorded as either • (3) The

substance of all matters decided

, and, at the request of any member,

a record, by individual member, of any votes taken.

• (4) Any

other information

that the public body requests be included or reflected in the minutes.

169

MEETINGS

– B. The

minutes shall be public records

and shall be available within a reasonable time after the meeting, except where such disclosures would be inconsistent with R.S. 42:16, 17, and 18, or rules adopted under the provisions of R.S. 42:21.

170

ASSET MANAGEMENT LAWS

• LRS24:515 B.(1) The head of every auditee subject to examination and audit under the provisions of R.S. 24:513(A)

shall maintain records of all land, buildings, improvements other than buildings, equipment, and any other general fixed assets

which were purchased or otherwise acquired, and for which such entity is accountable. • The records shall include information as to the

date of purchase

of such property or equipment, the

initial cost

, the

disposition

, if any, the

purpose of such disposition

, and the

recipient of the property or equipment disposed of

. 171

ASSET MANAGEMENT LAWS

• When ascertaining the exact cost, exact selling price, or any other relevant information on property or equipment obtained prior to January 1, 1980, creates a hardship on the auditee, such agency may provide estimates of the information. • The

records shall be made available

to the legislative auditor or, when the audit is conducted by a certified public accountant, the certified public accountant, at the time of examination and audit of the auditee, or any such time as the legislative auditor or certified public accountant requests the copies of such records be furnished. • The records shall not include office supplies. 172

ASSET MANAGEMENT LAWS

•

State Government

– LRS 39:321 – Definitions – LRS 322. Appointment of property managers – LRS 323. Marking of property – LRS 324. Inventory of property – LRS 325. Inventory reports; head of agency to furnish information – LRS 326. Regulations of commissioner governing inventories, inventory reports, other records; sanctions for noncompliance 173

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1211 – Local Depositories Defined – The term, "local depositing authorities", includes all parishes, municipalities, boards, commissions, sheriffs and tax collectors, judges, clerks of court, and any other public bodies or officers of any parish, municipality or township, but it does not include the state and its elected officials, and state commissions, boards, and other state agencies.

174

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1212. Daily deposits – After the expiration of existing contracts,

all funds of local depositing authorities shall be deposited daily whenever practicable

,

in the fiscal agency provided for

, upon the terms and conditions, and in the manner set forth in this Chapter. –

Deposits shall be made in the name of the depositing authority

authorized by law to have custody and control over the disbursements.

175

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1213. Fiscal agencies designated – The fiscal agency with which funds are deposited shall be a stock-owned federally insured depository institution organized under the laws of this state or of any other state of the United States, or under the laws of the United States, as may be selected by the depositing authority under the provisions of this Chapter.

176

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1214.

Bids to be invited

– A. Local depositing authorities shall, within 30 days prior to the expiration of any contract that may be entered into under this Chapter,

give written notice to each of the banks located in any parish

which embraces all or any portion of the political subdivision in which the depositing authority is domiciled and for which it acts, setting forth the intention of the depositing authority to select a fiscal agency. 177

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– This

notice shall specify the time for which the fiscal agency contract shall be made and the conditions and terms of the fiscal agency contract proposed

; and it shall invite bids under the terms and conditions of the proposal. – A

copy of the notice shall be published

in the official journal of the depositing authority at least

3 times

, the first notice to be published at least

15 days

preceding the date for the selection of the fiscal agency.

178

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1215. Depositing authorities located in parishes or municipalities of over one hundred thousand; private contract with banks – A. If any local depositing authority, located in whole or in part in any parish or municipality with a population of over one hundred thousand, is unable to arrive at a satisfactory fiscal agency contract with a bank located in this state, it may consummate a private contract for deposits or loans or both, either within or without this state, subject to certain provisions 179

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1216. Depositing authorities located in parishes or municipalities of over one hundred thousand;

supplemental private contracts

with banks – If a local depositing authority, located in whole or in part in a parish or municipality having a population of over one hundred thousand finds existing contracts, or any subsequent contracts, inadequate to meet its needs and requirements, it may enter into such a supplemental contract with any bank within or without the state as is deemed necessary best to meet its needs and requirements; provided, that all of the provisions of this Chapter, with respect to security for deposits and other requirements are complied with.

180

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1218. Fiscal agent banks and private contract banks; security and service – Any bank selected as the fiscal agency of any depositing authority, or any bank with whom a private contract is entered into, whether the bank is within or without the state,

shall give security for the safekeeping and payment of the deposits

and shall perform other services for the depositing authority as and in the manner provided elsewhere in this Chapter.

181

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1220.1. Local depositing authorities; activity charges – all fiscal agent or depository banks

shall pay at par and receive on deposit at par all checks and drafts drawn by or deposited for the account of the local depositing authority

on whatsoever points the checks may be drawn, except as otherwise agreed upon by the parties. – The local depositing authority may elect to pay for services rendered by the bank either through

compensating balances

or through the

assessment of service or activity charges

, or any combination thereof, as may be agreed upon by the local depositing authority and the fiscal agent or depositing bank.

182

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1221. Local depositing authorities shall require as security for deposits: – (1)

Bonds or other interest-bearing securities of the United States, or any agency thereof, including but not limited to the Federal National Mortgage Association

, – or

bonds or other interest-bearing obligations guaranteed fully or partially as to principal and interest by the United States

, or by any agency thereof; – or

bonds of any possession of the United States;

183

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– or

unmatured bonds of this state

, including both direct and indirect obligations and also, including bonds or other interest-bearing obligations, whether supported by revenue or by the avails of taxes, of the State of Louisiana or of any agency, board, commission, department or division thereof or of any agency, public corporation or authority created by or recognized by the State of Louisiana; – or

unmatured bonds of any parish, municipality, levee board, road district, school board or school district of this state

; 184

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– or

bonds of any parish, municipality, industrial district or industrial board which are secured by a lease

executed in accordance with the provisions of Article XIV, Section 14, Paragraphs b.2 or b.3 of the Constitution of the State of Louisiana for the year 1921 or R.S. 39:1001 et seq. or R.S. 51:1151 et seq., as amended, and partially or fully guaranteed by the Louisiana Board of Commerce and Industry in accordance with the provisions of the Bond Lease Guarantee Act of the regular session of the Louisiana Legislature of 1968.

185

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– (2)

Certificates of indebtedness

, including paving certificates, of any subdivision of this state referred to in Sub-section (1) of this Section.

– (3)

Promissory notes either of the authority letting the deposits

or of any other authority referred to in Sub-section (1) of this Section, which notes must be either unmatured or payable on demand.

186

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– (4)

Evidence of participation in such promissory notes

issued by any bank, trust company, or recognized bank clearing house association domiciled in this state, – (5)

Notes representing loans to students

which are guaranteed by the Louisiana Higher Education Assistance Commission in accordance with a contract agreement between the lender and the commission under the provisions of R.S. 17:3021 et seq.

187

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– (6)

Deposit guaranty bonds

underwritten and guaranteed by an insurance company, licensed to do business in this state, listed as an approved surety by the United States Department of the Treasury, that provide coverage for deposits of depositing authorities in excess of the amounts insured by the Federal Deposit Insurance Corporation or any other governmental agency insuring bank or other financial institution deposits that is organized under the laws of the United States, and the form and content of which are approved in advance by the state treasurer.

188

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 1222. Security of deposits; approval by depositing authority – Where any fiscal authority elects to deposit as security any bonds, certificates of indebtedness, paving certificates, promissory notes, evidence of participation in promissory notes or other interest bearing securities or obligations, these securities shall be approved by the depositing authority as being eligible as security under the terms of this Part and as being sufficient for the indemnity contemplated by this Part.

189

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1223. Security for deposits; value of securities – shall be accepted as security at their

market value

excluding accrued interest 190

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1224. Security for deposits; authorized depositories • The bonds, certificates of indebtedness, paving certificates, promissory notes, evidence of participation in promissory notes, and other interest-bearing securities or obligations furnished as security,

shall be

deposited with

the depositing authority

or with

an unaffiliated bank or trust company

or

federal reserve bank

or any

Federal Home Loan Bank

or its successor; 191

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– such security,

shall be

deemed to be

under the control and in the possession of the depositing authority

and deemed to be held in its name by the depository bank, trust company, federal reserve bank or Federal Home Loan Bank or its successor.

192

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1225. Security for deposits; amount of security – The amount of the security shall at all times be

equal to one hundred percent

of the amount of collected funds on deposit to the credit of each depositing authority

except

that portion of the deposits insured by any governmental agency insuring bank deposits which is organized under the laws of the United States (FDIC).

193

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 39:1226. Additional security; failure to provide – If the security required under the provisions of R.S. 39:1221, R.S. 39:1223, R.S. 39:1224, or R.S. 39:1225 is not furnished by a fiscal agency or depository bank, the

depositing authority may require such additional or other security

as shall bring the total to the required amount. – If any bank fails to comply,

within five (5) business days from receipt of demand

for such additional security, a meeting of the depositing authority may forthwith convene and declare the contract cancelled. 194

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• LRS 2955. Investments by political subdivisions – A.(1) All municipalities, parishes, school boards, and any other political subdivisions of the state are hereby authorized and directed to invest such monies in any general fund or special fund of the political subdivision, and any other funds under the control of the political subdivision which they, in their discretion, may determine to be available for investment in any of the following obligations: • (a)

Direct United States Treasury obligations, the principal and interest of which are fully guaranteed by the government of the United States.

195

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (b)(i)

Bonds, debentures, notes, or other evidence of indebtedness issued or guaranteed by federal agencies and provided such obligations are backed by the full faith and credit of the United States of America

, which obligations include but are not limited to: – (aa) U.S. Export-Import Bank.

– (bb) Farmers Home Administration.

– (cc) Federal Financing Bank.

– (dd) Federal Housing Administration Debentures.

– (ee) General Services Administration.

– (ff) Government National Mortgage Association - guaranteed mortgage-backed bonds and guaranteed pass-through obligations.

– (gg) U.S. Maritime Administration - guaranteed Title XI financing.

– (hh) U.S. Department of Housing and Urban Development.

196

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (b)(ii)

Bonds, debentures, notes, or other evidence of indebtedness issued or guaranteed by U.S. government instrumentalities

, which are federally sponsored, and such obligations include but are not limited to: – (aa) Federal Home Loan Bank System.

– (bb) Federal Home Loan Mortgage Corporation.

– (cc) Federal National Mortgage Association.

– (dd) Student Loan Marketing Association.

– (ee) Resolution Funding Corporation.

197

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (b)(iii) Notwithstanding the foregoing list of investments, in

no instance

shall a political subdivision invest in obligations described in Items (i) and (ii) of this Subparagraph which are

collateralized mortgage obligations

that have been stripped into interest only or principal only obligations, inverse floaters, or structured notes. For the purposes of this Item "structured notes" shall mean securities of U.S. government agencies, instrumentalities, or government sponsored enterprises which have been restructured, modified, and/or reissued by private entities.

198

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (c)

Direct security repurchase agreements

of any federal book entry only securities enumerated in Subparagraphs (a) and (b). • "Direct security repurchase agreement" means an agreement under which the political subdivision buys, holds for a specified time, and then sells back those securities and obligations enumerated in Subparagraphs (a) and (b).

199

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (d)(i)

Time certificates of deposit of any bank domiciled or having a branch office in the state of Louisiana

, savings accounts or shares of savings and loan associations and savings banks, as defined by R.S. 6:703(16) or (17), or share accounts and share certificate accounts of federally or state-chartered credit unions issuing time certificates of deposit. 200

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (e)

Mutual or trust fund

institutions which are registered with the Securities and Exchange Commission under the Securities Act of 1933 and the Investment Act of 1940,

and

which have

underlying investments consisting solely of and limited to securities of the United States government or its agencies.

201

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (f) Funds invested in accordance with the provisions of R.S. 33:2955(A)(1)(d)

shall not exceed at any time the amount insured by the Federal Deposit Insurance Corporation in any one banking institution

, or in any one savings and loan association, or National Credit Union Administration, unless the uninsured portion is collateralized by the pledge of securities in the manner provided in R.S. 39:1221.

202

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (g)

Guaranteed investment contracts (GICs)

issued by a bank, financial institution, insurance company, or other entity having one of the two highest short-term rating categories of either Standard & Poor's Corporation or Moody's Investors Service • (h) Investment grade (A-1/P-1)

commercial paper (CP)

of domestic United States corporations.

• (i) In a BIDCO, as authorized by R.S. 51:2395.1.

203

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (j)

Bonds, debentures, notes, or other evidence of indebtedness issued by the state of Louisiana or any of its political subdivisions

; however: – (i) No political subdivision may purchase its own indebtedness.

– (ii) The indebtedness shall have a minimum investment grade rating of Baa3 or higher by Moody's Investor Service, a rating of BBB- or higher by the Standard and Poor Corporation or a rating of BBB- or higher by Fitch, Inc. and have a final maturity of no more than three years, except that such three year limitation shall not apply to (aa) funds held by a trustee, escrow agent, paying agent, or other third party custodian in connection with a bond issue or (bb) investment of funds held by either a hospital service district, a governmental 501(c)(3), or a public trust authority.

204

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• (k)

Bonds, debentures, notes, or other indebtedness issued by a state of the United States of America other than Louisiana

or any such state's political subdivisions provided that certain conditions are met.

205

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– A.(2) Investment of funds in such mutual or trust fund institutions shall be limited to

twenty-five percent of the monies considered available for investment

as provided by this Section. – In no event shall monies be considered available for investment under the authority of this Section unless and

until such funds are determined by the treasurer or chief financial officer of said subdivisions, in the exercise of prudent judgment, to be in excess of the immediate cash requirements

of the fund to which the monies are credited. 206

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– A.(3) Nothing in this Section shall be construed as to abrogate, impair, or supersede the ability of a subdivision from

combining monies

from several funds in order to invest such monies at a better rate of return.

• “

pooled cash” funds

207

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– B. The interest earned on bonds, notes or certificates, time certificates of deposit, or mutual or trust fund investments, so purchased shall be credited by the respective subdivision to the fund from which the bonds, notes or certificates, time certificates of deposit, or mutual or trust fund investments, were acquired, or it may be applied to the payment of the principal and interest of the outstanding bonded indebtedness of the respective subdivision.

208

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– C. At any time that may be deemed advisable the subdivision may cash and liquidate any of the investments authorized herein which are purchased for any particular fund. The proceeds of any such liquidation shall be credited to the fund from which the authorized investments were originally purchased.

209

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

– D.

All political subdivisions

of the state, as that term is defined in Article VI, Section 44 of the Constitution of Louisiana,

shall develop and adopt an investment policy

that details and clarifies investment objectives and the procedures and constraints necessary to reach those objectives. All such investment policies should: • (1) Reflect the

mandate to manage public funds prudently

.

• (2) Place appropriate emphasis on the goals of

safety of principal first, liquidity second, and yield third.

• (3) Establish ensure that the risks inherent in derivatives are adequately managed.

internal controls for any derivatives

in use to 210

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• E. After August 15, 1995 (

California’s Orange County crash

), the

investment of monies

by a municipality, parish, school board, or other political subdivision of the state

in violation of

the provision of

this Section shall constitute

an intentional performance of a duty in an unlawful manner and may be prosecuted pursuant to R.S. 14:134 (

MALFEASANCE

).

211

FISCAL AGENCY AND CASH MANAMAGEMENT LAWS

• State Depository and Investment Laws – LRS 49:319 to 49:327 • Special Provision – Deposits in Savings and Loans is Allowed – LRS 6:748 212

DEBT RESTRICTION LAWS

• Is it true that we have not incurred any long-term indebtedness without the approval of the State Bond Commission, as provided by Article VII, Section 8 of the Constitution, Article VI, Section 33 of the Constitution, or LRS 39:1410.60 to 1410.65? 213

DEBT RESTRICTION LAWS

• Article 7 §8. State Bond Commission – A) Creation. The State Bond Commission is created. – (B) Approval of Bonds.

No bonds or other obligations shall be issued or sold by the state

, directly or through any state board, agency, or commission,

or by any political subdivision

of the state,

unless prior written approval of the bond commission is obtained

. 214

DEBT RESTRICTION LAWS

• Article 6 §33. Political Subdivisions; General Obligation Bonds – (A) Authorization.

Subject to approval by the State Bond

Commission or its successor,

general obligation bonds may be issued only after authorization by a majority of the electors voting on the proposition at an election

in the political subdivision issuing the bonds. –

Bonds to refund

lower effective rate of interest, even though payable solely from ad valorem taxes, outstanding indebtedness at the same or at a

need not be authorized at an election

if the indebtedness refunded is paid or cancelled at the time of the delivery of the refunding bonds, or if money, or securities made eligible for such purpose by law, are deposited in escrow in an adequate amount, with interest, to be utilized solely to retire the refunded indebtedness or bonds and to pay interest thereon and redemption premiums, if any, to the time of retirement. 215

DEBT RESTRICTION LAWS

– (B) Full Faith and Credit. The

full faith and credit of a political subdivision is hereby pledged to the payment of general obligation bonds issued by it

under this constitution or the statute or proceedings pursuant to which they are issued. – The governing authority of the issuing political subdivision shall levy and collect or cause to be levied and collected on all taxable property in the political subdivision ad valorem taxes sufficient to pay principal and interest and redemption premiums, if any, on such bonds as they mature. 216

DEBT RESTRICTION LAWS

• Article 6 § 34. Limitations on Bonded Indebtedness – The legislature by law shall fix the limitation on bonded indebtedness payable solely from ad valorem taxes levied by political subdivisions. 217

DEBT RESTRICTION LAWS

• LRS 1410.60. Approval of application; incurring indebtedness – A.

No parish, municipality, public board, political or public corporation, subdivision, or taxing district

constitution and laws of the state , and no road or subroad district, school district, sewerage district, drainage or subdrainage district, levee district, waterworks or subwaterworks district, irrigation district, road lighting district, harbor and terminal district, or any other political subdivision, taxing district, political or public corporation, created under or by the

evidences of debt Commission.

shall have authority to borrow money, incur debt, or to issue bonds, or other

, or to levy taxes, or to pledge uncollected taxes or revenues for the payment thereof, where they are authorized by the constitution or laws of the state so to do,

without the consent and approval of the State Bond

218

DEBT RESTRICTION LAWS

– B.(1) The provisions of this Section shall not apply to purchases made in the ordinary course of administration on terms of credit not to exceed ninety days.

219

DEBT RESTRICTION LAWS

– C.(1) As used in this Section, the term "debt" or "evidence of debt"

shall not include a lease of a movable or an installment purchase agreement

financing the purchase of a movable

if

the lease or installment purchase agreement contains a

nonappropriation clause

, and

does not contain an anti-substitution or penalty clause

220

DEBT RESTRICTION LAWS

• LRS 1410.61. Approval of application; special fiscal elections –

Before incurring any debt, holding any election to authorize the incurring of any debt or the levy of any special tax, borrowing any money for any purpose whatever, issuing any bonds or other evidences whatever of debt

, levying any tax or pledging any tax or revenue or income for the payment of any such bonds or debt, where they are authorized so to do by the constitution and the laws of this state,

every such governmental agency

of the state of Louisiana named in R.S. 39:1410.60

shall obtain the consent and approval of the commission

.

221

DEBT RESTRICTION LAWS

• LRS 1410.63.

Penalties for violation

– A. Any contract, debt, obligation, bond, or other evidence of indebtedness whatsoever, incurred or issued in violation of this Part, and without the consent and approval of the commission

shall be null and void

, and no court of this state shall have jurisdiction to enforce the payment thereof, or of any suit or other proceeding affecting or involving the same.

– B.

Any person

or any officer, agent, or employee of any governmental agency named in R.S. 39:1410.60, who violates this Part,, without the consent and approval, first hand and obtained, of the commission,

shall be fined

not less than one hundred dollars and not more than five hundred dollars,

and imprisoned

for not more than six months.

222

DEBT RESTRICTION LAWS

• LRS 39:562.

Limit of indebtedness

– A. For the purposes of this Section, "general obligation bonds" and "bonded debt" mean bonds or bonded debt, as the case may be,

payable solely from ad valorem taxation

imposed pursuant to R.S. 39:569.

– B. No debt shall be incurred and general obligation bonds issued therefor by any subdivision hereunder for any one of the purposes herein provided which shall exceed in the aggregate

ten (10) percent of the assessed valuation of the taxable property of such subdivision

property , including both (1) homestead exempt property, which shall be included on the assessment roll for the purposes of calculating debt limitation and (2) nonexempt 223

DEBT RESTRICTION LAWS

• LRS 39:563.

Maximum duration; interest

–

No bonds issued by any subdivision shall run for a longer period than forty (40) years from the date thereof

, or bear a greater rate of interest than the maximum authorized by Act No. 19 of the First Extraordinary Session of the Legislature of Louisiana for the year 1975, [R.S. 39:1421 to 39:1426], as the same now exists or may be hereafter amended, payable annually or semiannually, or be sold for less than par. – Such bonds shall become due and payable in annual installments beginning not more than three (3) years after the date of issuance.

224

DEBT RESTRICTION LAWS

• LRS 39:1365 – Provisions for Bond Acts – Procuedures for State Issue bonds 225

REVENUE AND EXPENDITURE RESTRICTION LAWS

• We have restricted the collections and expenditures of revenues to those amounts authorized by Louisiana statutes, tax propositions, and budget ordinances 226

REVENUE AND EXPENDITURE RESTRICTION LAWS

• It is true that we have not advanced wages or salaries to employees or paid bonuses in violation of Article VII, §14 or LRS 14:138 (Payroll Fraud) • It is true that no property or things of value have been loaned, pledged, or granted to anyone in violation of Article VII, §14 227

REVENUE AND EXPENDITURE RESTRICTION LAWS

• Donation, Loan, or Pledge of Public Credit • Article VII, § 4.(A)

Prohibited Uses

. – Except as otherwise provided by this constitution, the funds, credit, property, or things of value of the state or of any political subdivision

shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private.

228

REVENUE AND EXPENDITURE RESTRICTION LAWS

– (C)

Cooperative Endeavors

. For a public purpose,

the state and its political subdivisions

or political corporations

may engage in cooperative endeavors with each other

, with the United States or its agencies, or with any public or private association, corporation, or individual.

229

REVENUE AND EXPENDITURE RESTRICTION LAWS

– (E)

Surplus Property

.

Nothing

in this Section

shall prevent the donation or exchange of movable surplus property

between or among political subdivisions

whose functions include public safety.

230

SELECTED CRIMINAL STATUTES

• LRS 14:67 – Theft • LRS 14:68 – Unauthorized Use of a Movable • LRS 14:72 – Forgery • LRS 14:118 – Public Bribery • LRS 14:132 – Injuring Public Records • LRS 14:133 – Filing or Maintaining False Public Records 231

SELECTED CRIMINAL STATUTES

• LRS 14:134 – Malfeasance in Office – §134 as amended by Acts 2010, No. 811, §1, eff. Aug. 15, 2011. – C.(1) Whoever commits the crime of malfeasance in office shall be

imprisoned for not more than five years

with or without hard labor or shall be

fined not more than $5,000 dollars

, or both.

– (2) In addition to the penalty provided for in Paragraph (1) of this Subsection, a person convicted of the provisions of this Section

may be ordered to pay restitution to the state

provided in R.S. 13:4202.

if the state suffered a loss as a result of the offense. Restitution shall include the payment of legal interest at the rate 232

SELECTED CRIMINAL STATUTES

• LRS 14:135 – Public Salary Deduction (Huey P. Long) • LRS 14:138 – Public Payroll Fraud • LRS 14:139 – Political Payroll Padding • LRS 14:140 – Public Contract Fraud 233

SELECTED CRIMINAL STATUTES

• LRS 42:1461 – Public Property, Duties of Officials – A.

Officials

, whether elected or appointed and whether compensated or not,

and employees

of any "public entity", by the act of accepting such office or employment

assume a personal obligation not to misappropriate, misapply, convert, misuse, or otherwise wrongfully take any funds, property, or other thing of value

belonging to or under the custody or control of the public entity in which they hold office or are employed.

234

CONCLUSION/QUESTIONS

• Do not forget

Attorney General Opinions

have been issued on many of these topics • See:

http://www.ag.state.la.us/Opinions.aspx

235

CONCLUSION/QUESTIONS

• QUESTIONS????

• DOWNLOAD BOOKLET AT: –

http://www.jpso.com/FinancialAdmini stration/LAGFOA.aspx

236