Louisiana News

Louisiana auditor, coastal protection agency disagree on extent of monitoring for federal funds

(The Center Square) — The Louisiana Legislative Auditor contends the Coastal Protection and Restoration Authority is not complying with requirements to monitor federal funds it disperses, though agency officials disagree with that assessment.

Louisiana Legislative Auditor Mike Waguespack issued an audit report last week that examined CPRA finances, internal controls over financial reporting and compliance and whether the agency complied with applicable laws and regulations in Fiscal Year 2021.

The one significant finding came in regards to monitoring requirements for funds disbursed through the Gulf of Mexico Energy Security Act. Of CPRA’s $73.8 million in expenditures, $60.9 million went to coastal political subdivisions, local groups reimbursed by CPRA for infrastructure construction, levee improvements, engineering and design work and real estate acquisition.

The local groups on the coast enter into agreements with private vendors to provide construction, engineering and design, and real estate services for each project. The relationship between CPSs receiving reimbursement and the CPRA is where the dispute over the agency’s reporting requirements stems.

“GoMESA funds are received by the state of Louisiana annually without an accompanying grant award document, which is typically the document that identifies the applicable federal requirements the recipient agency must comply with,” the audit explained. “Absent an award document, the auditors used the GoMESA Act and the Assistance Listing to identify applicable compliance requirements.”

Auditors’ interpretation of the federal reporting requirements concluded that the relationships between the CPRA and local groups are subrecipient relationships that come with federal reporting requirements, while the CPRA considers local governments as contractors that don’t fall under the subrecipient requirements.

“Based on the auditor’s application of the criteria outlined in 2 CFR §200.331 and using our professional judgment, we concluded that the agreements created subrecipient relationships between CPRA and the CPSs. The auditor’s conclusion is mainly based on the agreements requiring CPSs to adhere to applicable federal program requirements on its use of GoMESA funds,” the audit reads. “In addition, the CPSs use the funds to carry out the public purpose of completing hurricane protection projects as specified in the GoMESA Act of 2006.”

CPRA management disagreed with the auditor’s finding in a letter to the Louisiana Legislative Auditor on May 31.

CPRA Executive Director Bren Haase wrote that “CPRA has not historically and does not currently consider the CPS as a subrecipient.”

“One reason is that CPRA does not subaward GoMESA Funds to the CPS,” the letter read. “Also, it is due to the nature of the relationship between the entities to implement CPRA selected Master Plan projects for the purpose of integrated coastal protection and restoration, which is clearly a determination that federal guidelines allow CPRA to make. It seems the auditor has failed to consider the agreement in its entirety, and does not consider the actual engagement between CPRA and the CPS.”

Haase also pointed to past attempts to clarify the issue with federal agencies, which resulted in conflicting information. Haase requested the legislative auditor reverse the reportable finding of noncompliance and instead “treat this issue as an exit comment/nonreportable audit finding” until the issue is clarified.

“I have reviewed the information presented by both my staff and your auditors, and our position remains that until there is clear written guidance from the appropriate federal agency that subrecipient monitoring is a requirement, CPRA cannot be in noncompliance given that 2 CFR 200 affords the recipient agency the ability through a prescribed analysis to make that determination,” Haase wrote.

“CPRA is committed to working on modifications to its existing and future agreements with CPS and to increase standards for documentation of engagement with the CPS in an attempt to address the auditor’s concerns.”

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