You are on page 1of 33

Part

1Internal Audit of 2 Parts


FOR IMMEDIATE STAFF USE PUBLIC DISTRIBUTION
May 23, 2017
Office of the Alexandria City Attorney
Alexandria, Louisiana

AUDIT OF IMPROPER PURCHASE CARD ACTIVITY 2016-2017
City Conducts Audit of Purchase Card Activity of
Community Services Director for the Period of 2016-2017 and
Conclusions Regarding the Underlying Facts of the Activity,
Integrity of Internal Controls and Recommendations for
Future Modifications of Purchase Card Policy

Alexandria, LouisianaThe City of Alexandria


provides this memorandum report pertaining to The City of Alexandria was required on March
1, 2017, to report potential misappropriation
suspicious1 and improper purchase2 activity by the of public funds by a city agency head. The
report was triggered by reasonable cause that
former Director of Community Services, Daniel the agency head used a public purchase credit
Williams (Williams); for Williams violations card for a purely private purpose. Public
funds issues are, as provided by La.R.S.
of written city policy; and, potentially, regarding 24:523, to be reported when there is actual
criminal activity relative to public funds and/or knowledge or reasonable cause to suspect
misappropriation of such public funds.
record documentation (the Williams matter).
The City of Alexandria, as a political
The Williams matter therefore is composed of subdivision of the state of Louisiana, is a local
internal auditing, additional agreed-upon auditee for purposes of La.R.S. 24:513, and is
subject to oversight for its public financing
procedures by the independent auditor, and an activities, under certain circumstances.
active criminal investigation. The City of Alexandria uses an independent
auditor pursuant to its home rule charter and
state law, which acts under the auspices of the
EXECUTIVE SUMMARY OF CONCLUSIONS Legislative Auditor. In addition to the
reporting required by La.R.S. 24:523, the City
of Alexandria ordered immediate audits of
For purposes of the Williams matter, the policy of relevant activity internally and by its
the City of Alexandria was violated by Williams3 independent auditor, to be conducted on behalf
of its city council and the Legislative Auditor,
when Williams was: (i) aware of the policies at for full and complete disclosure to the public.
issue, having (A) acknowledged the existence of The City of Alexandria has made and
the purchasing/procurement card (p-card) use continues to make all reasonable and
appropriate efforts to collect any
policies4 and (B) exemplified and acknowledged misappropriated public funds, including
his understanding of the policies (with Williams misused funds not rising to criminal
misappropriation but constituting violation of
receiving multiple reminders and examples of the public purpose and city-use policies.
policies and applications of the policies) 5 ; (ii) The misuse of public funds resulted from
engaged in use of city credit for purposes clearly inappropriate activity, not subject to
simple mistake, oversight or policy-only
inconsistent with, and in some cases without, a violations. Material evidence of intent exists.
public purpose, leading to this investigation and


Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017Part 1



Page -2-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit

others6; and (iii) required to address the central allegation of an unauthorized use of credit
for purely personal activity. After commencement of this review, untruthful statements
by Williams were revealed, which could not be explained as merely mistakes regarding
policy interpretation; and all while Williams had received verbal counseling about city
policy and counseling or discipline regarding historical problems with previous private
employment, of the same or substantially the same nature.7 In addition to criminal
charges, violations of policy necessitate additional collection procedures to recover
public funds.8

SUMMARY OF FACTS KNOWN AND SUPPORTED BY SUBSTANTIAL EVIDENCE

1) The audits of activities involving the Williams matter (the Audit) were
necessitated by improper p-card usage. These activities occurred for personal use,
not city-related business. The questioned activities initially involved charges
dated January 11-25, 2017, appearing on the card statement for the City of
Alexandria (the City), i.e., on the next itemized statement.

2) The Audit is composed of a criminal investigation conducted by the Alexandria


Police Department (the APD investigation) and two additional audits occurring
contemporaneously with the criminal investigation(i) an internal finance and
legal division audit and (ii) additionally requested auditing by the Alexandria City
Councils independent auditor, acting for the Legislative Auditor pursuant to
agreement and law (collectively, the internal audit). The internal audit is
focused on (i) recovery of any monetary loss due the taxpayer for violation of law
or policy, and (ii) discovery of how any policy violations may be related to (A) a
failure of internal controls or (B) a need to change policy and controls.

3) The Audit considered behaviors demonstrating intent to violate law or policy


(conducted primarily by the APD investigation). The internal audit has focused
primarily on fact gathering and policy issues. However, the internal audit has
uncovered material evidence of intent, motive, and opportunity; the internal
controls and policies in place do not prevent the opportunity for Williams to
provide false documentation not easily discovered by auditors who have no
reason to doubt the identifying data. The identifying data on receipts do not
necessarily evidence misfeasance on the face of the documentationsince in
many cases names and public purpose notes were consistent with policy but later
turned out false following interviews. Motive is indicated by multiple instances
of poor financial decision making, which were discovered during the relevant
timeframe, such as garnishments and/or private debt collection by Williams
creditors. The Williams matter evidences motive, rationalization (defense), and
opportunity.



Page -3-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit

4) The facts known as of this date are contained in the APD investigation and this
memorandum (Part 1 of 2 Parts). Part 2 will be the independent auditors report
on behalf of the Legislative Auditor and Alexandria City Council. The request for
the independent audit was first noticed and made to auditors commencing with
discovery of the issues on March 1, 2017, and completed as to the engagement for
additional procedures on May 18, 2017.

5) Regarding the identification of other persons provided by Williams as justification


for use of his p-card, each was provided an opportunity to address questioned
activity related to a suspicious or questioned purchase or use. Questioned
activity as defined herein means: any p-card purchase with insufficient
documentation or identification of the parties justifying use of the card for official
public purchase, or insufficient documentation of the public purpose, or
suspicious descriptive services or amounts for services typically allowed but
insufficiently justified on the face of a record, or purchases of a service that
involved legitimate use of the card for a public purpose and with a proper party
but for a sub-service inconsistent with public policy, and/or identification of
parties that cannot or could not be a party to such a purchase.

6) The APD investigation led to approximately 53 other possible acts of p-card


misuse. These instances contained information designed to record the public
purpose of public funds, in the form of misidentified or falsely identified persons
used by Williams as support for the public purpose of meals or travel using the p-
card. In these 53 or so instances, persons listed provided information that directly
contradicted Williams, including information the persons listed were not
physically at those meals (and, in some instances, the claimed recipient provided
documentation of the impossibility of his/her attendance). In other cases, the
persons confirmed the attendance, supporting Williams documentation.

7) The Audit considered there would be permissible and public purpose meals that
include correct identifier data joined with incorrectly identified parties or data,
making the record technically false but not necessarily rendering the meal
impermissible or illegal. The Audit shows permissible charges, which are
improperly documented, cause no recoverable harm. Similarly, impermissible
and immaterial violations strain public resources for little recoverable return. As
a result of these findings, and to avoid the public expense for a diminished return
relative to the potential funds in the limited universe that could be misused, APD
submitted only the $3015 in improper charges. This left the approximately 53
plus other counts of improper documentation for auditing or other investigation,
totaling approximately $2200 in additional monies potentially owed. The Audit



Page -4-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit

conducted internally has noted other violations of policy for which reimbursement
would be owed in addition to what the APD investigation identified.

8) Because of summary fact #7, it appears the overall extra exposure remains
financially de minimis for collection purposes when compared to the expense to
find additional policy violations plus the costs associated with a recovery suit.
Because the City shall make bona fide collection efforts and therefore authorized
a recovery suit, with the civil action providing liberal discovery and deposition
testimony, suit is a much more efficient vehicle for full audit and recovery of the
policy violations leading to public loss.

a. The completed additional agreed-upon procedures of Attachment A-2 of


May 18, 2017, by the independent auditor of the Alexandria City Council,
will review p-card activity of the Mayor and other Division Heads,
addressing the actual custom and practice at the City for the relevant
periods of time.
b. At this time, it does not appear there was a failure of internal controls.
Management is studying centralized custody of p-cards.
c. The Mayors p-card, distinctly from other p-cards, requires a receipt-for-
receipt analysis and prepared schedule by the Finance Division. The
Alexandria City Councils independent auditor reviewed, pertaining to the
Mayor, 54% of the dollars reported by the receipt-for-receipt schedule
pertaining to his p-card during the last audit period. The Mayors p-card
is, additionally, subject to regular internal controls reviewing the Mayors
charges by the Finance Division.
d. The Mayors p-card and the Finance Directors p-card have been reviewed
by the office of the Mayor and the Finance Division, since the Williams
matter arose, for the last calendar year (2016) and to date (2017), receipt
for receipt. The Finance Director has reviewed every p-card statement for
every division head.

9) Therefore, the Audit concludes, when reviewing the overall misuse of the p-card,
verbal counseling received by Williams about p-card usage, failure to timely turn
in receipts, and past non-city issues discovered, there is reasonable cause the
charges involving the vacation were not, and cannot be said to be, a mistake.

10) Additionally, the Audit concludes, when reviewing the overall misuse of the p-
card, verbal counseling received by Williams about p-card usage, failure to timely
turn in receipts, and past non-city issues discovered, there is reasonable cause
other questioned activities were not, and cannot be said to be, mere mistakes in all
instances, or at least were with reckless disregard for policies in place.



Page -5-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit

SUMMARY OF OPINION BASED ON SUMMARY FACTUAL DETERMINATIONS

As the investigations proceeded, additional information shed more light on the potential
motivations and defenses of Williams, as provided by third parties and other
relationships; however, the summary of facts contained in this memorandum are not in
dispute according to the records and statements reviewed, witnessed by third parties, and
those admitted to by Williams. The public is informed the actions underlying the
Williams matter are not indicative of other executives patterns and practices with
regard to documentation of identifying parties and the public purpose regarding use
of purchase cards; and in no case can the City identify, for the same or an even
larger period, a purchase card use for a vacation with no ostensible public purpose,
of the nature presented here.

Williams use of his p-card, in several instances for alcohol purchases clearly violates
policy. Moreover, in some cases, charges were made after Williams separated alcohol
charges from permissive food charges (indicating knowledge of the policy), and then
placed both sets of charges on his City p-card. Unclassified employees routinely and
meticulously ensure public travel charges do not involve alcohol (or when there are
personal portions of meals and activities during otherwise valid City travel). These
charges involve split bills to ensure personal charges are placed on private cards; there is
ample evidence of this practice by other personnel. Williams knew the policy of the City
held alcohol purchases were never sufficient to meet a public purpose. Similarly,
Williams knew a p-card could not be used in substitution of the obligation to pay for
ones personal meals, outside of official travel and public purpose while conducting
business creating or tending toward public benefit.

The repayment of the funds questioned by the principal charge leading to the Williams
matter was made only after contact by the City Attorney with representative parties, and
was not provided personally by Williams, who had maintained the entire Williams matter
was a mistaken use of the public card instead of a private card because of the error of a
travel agent. The facts contradict this assertion, and the travel agent involved denies
there was ever a second private card on file or used for travel by Williams with the
agent. The trip in question was taken with private persons of a nature wholly inconsistent
with City business or a public purpose. The trip taken involved charges regarding what
can only be considered a private trip for non-public purposes. The witnesses who
attended the trip stated it was an annual trip and had no public purpose. Other trips
contain charges inconsistent with public purposes although involving use of city credit.
In still other cases, trips with a public purpose were taken, permitting p-card use, but
these trips were coupled with parts of the trip in which p-card use would be prohibited by
policy or law.



Page -6-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit

The charges underlying the principal allegation of the Williams matter were discovered
on a credit card statement presented to the City, and at no time did Williams inform the
City of the mistake before the statement arrived (after visual use of his public card by
him to purchase the ski trip); and when confronted, Williams informed the Director of
Finance it was a mistake. After at least two conversations allowing for Williams
corrections or explanations, the preliminary questions led to a discussion with the travel
agent, who did not confirm the nature of the claims by Williams, and in each instance
contradicted the allegations. In fact, the investigations revealed the trip was an annual ski
trip among three friends, and that at no time did Williams have two cards (or, in any
event, a private card) on file with the travel agent. Tellingly, whether Williams
telephoned the agent to make the charge or presented the card personally, at that time,
Williams would have been required to visually review his city-issued card in hand. If
completed by telephone, Williams would have to have read out its numbers. Williams
gave the public card information for the impermissible charges to the travel agent. This
is important because it stands in direct contrast to the statements of Williams to the
Finance Division; and it therefore supports the basis for questioning the veracity of
Williams (and his defenses of mistake or that policy allowed the activity by custom or
practice of others).

At that point in time, the Finance Division determined full opportunity for exculpation9
had occurred and there was reasonable cause10 a misappropriation had occurred. The
City was required by state law to report the activity to the district attorney, the
appropriate investigating agency, and the legislative auditor.11 The City first reported to
the Alexandria Police Chief, who agreed full reporting was required although the Finance
Director had reported to the Legislative Auditor before that confirmation.

******


1 The activity addressed in this memorandum provides reasonable cause to suspect intentional violations of,
and/or reckless disregard for, established city purchasing policy; and there is activity supporting reasonable
cause to suspect violations of law relative to false official statements or records. Conservatively, fifty-three (53)
counts of potential violations of recordkeeping were noted by the Alexandria Police Department (the APD),
in addition to the initiating act of purchasing a personal trip using city credit, with no documentable public
purpose. In these additional 53 instances, the APD suspects Williams knew or should have known the
information he supplied in support of p-card use was materially inaccurate. See La.R.S. 14:133 (Filing or

133. Filing or maintaining false public records.

A. Filing false public records is the filing or depositing for record in any public office or with any
public official, or the maintaining as required by law, regulation, or rule, with knowledge of
its falsity, of any of the following:
(1) Any forged document.
(2) Any wrongfully altered document.



Page -7-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit


(3) Any document containing a false statement or false representation of a material fact.

Williams showed a documented habit of providing late or inaccurate information in support of p-card use. In
these 53 instances, Williams supplied a public purpose beneficiary (i.e., a person he claimed shared meals with
him for a public purpose related to community services) under circumstances that raised a reasonable suspicion
of improper activity. The APD investigation revealed these 53 occasions contained unresolvable activity and
were therefore clear violations of policy and perhaps demonstrated knowledge. The Citys internal audit has
revealed confirmable additional counts of improper behavior related to personal use of city credit and/or use
related to a public purpose in part but not reasonably related to the purpose in other parts.

These acts also may violate, potentially, La.R.S. 14:134 (Malfeasance in office), which provides:

A. Malfeasance in office is committed when any public officer or public employee shall:

(1) Intentionally refuse or fail to perform any duty lawfully required of him, as such officer or
employee; or
(2) Intentionally perform any such duty in an unlawful manner; or
(3) Knowingly permit any other public officer or public employee, under his authority, to intentionally
refuse or fail to perform any duty lawfully required of him, or to perform any such duty in an unlawful
manner.

Williams had a public duty to report p-card activity accurately, as a city officer, and to perform the
duty in a lawful manner.
Williams failed to report accurately on tens of occasions.
Williams claims others acted similarly. The internal audits fail to demonstrate any reasonable cause to
suspect others, with the exception of one other unclassified division head whose habit of late turn ins
are nonetheless documented and now in proper form.

2 The charges detailed infra at endnote 3 constitute probable cause for fraudulent p-card activity, in violation of
statutes regarding improper use of a credit card as well as general theft. La.R.S. 14:67 (theft).

3 Attachment A/A-1-A-2Charges to the Williams purchase card for a trip to Colorado, including a plane
ticket and room lodging charges, totaled $3015.00. The trip referenced by the itemized statement was not
authorized by any city official, and instead was claimed as a mistake by Williams. No personal card ever was
produced, and Williams did not at any time attempt to remedy the situation upon returning to Louisiana. Even
assuming it was unknown (i.e., that the city p-card was inadvertently used and thought to be a personal card), a
month passed with no notification to city personnel in the finance division. Once the finance division received
notice of the charges and questioned Williams, Williams stated it was an oversight and that the travel agent
booked the charges on the wrong card; it should have been my personal card. Williams asserted the trip
simply was charged to the wrong card, maintaining he meant to charge the trip to his personal credit card.
Williams claimed the travel agent knew of the mistake and was supposed to have credited the city card, placing
the charges on the proper personal card of Williams which Williams claimed was on file with the agent. The
travel agent contradicts this story. She spoke to Williams only once, when he made the charges using the City
card. She further stated she did not speak to him again on the matter, nor did he ever attempt any contact of
her office on this matter until notified by the Finance Division. Williams told the Finance Division the agent
was remedying the matter, and when confronted with the reality the agent had been contacted, stated, yeah,
Im sorry. The charges for lodging would have been confirmable at the end of the stay, and at that time
offered an additional opportunity for Williams to correct the situation by substituting his private card and
notifying the City of the impending charges. In other discussions, Williams maintained his full understanding



Page -8-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit


of the policies, and that in those instances charges were supposed to be on his personal card. When
confronted, Williams admitted the issue and stated, yeah, Im sorry. The statements, in this context, evidence
a pattern when considered with prior acts consistent with this matter in which Williams was alleged to have
misused corporate credit through a purchase card. Williams claims this matter involved a simple mistake are
not borne out by the record, witness statements, and his own admissions. On numerous additional counts of
purchase policy violations, Williams involved his colleagues and others in the community under circumstances
in which those persons deny being present with Williams and thereby deny the use of city credit for a public
purpose.

4 Attachment BThis document is the city purchase card policy, administered to all employees and
specifically administered to Williams. It demonstrates his acknowledgement of the policies for use of the card.

5 Attachment CThis documents Williams job description, specifically noting his role in the City for
Community Services. The position requires a distinct knowledge of Article VII, Section 14 issues and
requirements. These issues arose weekly at executive staff meetings, in which Williams was an active
participant. Williams was required, as part of his weekly executive duties, to evaluate Community Action
Partnership forms, which necessitate Article VII evaluations calling for discernment between and among what
requests for partnering were purely private, public, mixed, and/or permissible under circumstances detailed in
the requests. Perhaps as much as any division in the City, Williams was required to exercise, and received
multiple avenues of legal and policy assistance, in determining the balance between public purpose and private
benefit.

Williams participation in the Recreation Millage analysis evidences Williams understanding of policies and
procedures regarding determining public purpose, based on his use of products for public consumption in that
regard, the resulting recreation policy documents, and the long form for using public facilities. These policies
clearly state in pertinent part that the funds, credit, property, or things of value of the City cannot be loaned,
pledged, or donated, unless: (i) the expenditure, use or transfer of public funds or property, or the pledge,
donation, or aid of public or private endeavor by public funds or use of public property, is based on a legal
obligation (e.g., a valid policy, statute, ordinance, charter, or contract); (ii) the expenditure or use is also for a
public purpose (a purpose in which the public benefit outweighs significantly any incidental or minimal private
gain); and (iii) the expenditure creates a public benefit proportionate to its cost (i.e., the amount expended by
the City is met with a comparable return or real and substantial obligation to create a future return). The form
also notes for customers of public facilities that the Citys policies and agreements shall promote uniform use
of public facilities, which uses shall involve a public purpose outweighing any incidental private gain or
fundraising goal of a private nature. The exclusive use of public facilities for private gain or fundraising, no
matter the desirability of the project aim, presumptively is prohibited unless the public benefit outweighs the
private gain by measurable standards, as established by law, policy, custom, and practice; . . . .

These policies are the same as, or substantially similar to, policies regarding use of funds by employees, such as
p-cards (requiring a similar analysis of public purpose). Williams uniquely and fully understood these policies.
Williams confirmed his understanding verbally during use of his p-card, and admitted to knowing this
difference as provided here. Despite these admissions, the pattern and practices are established and tend to
evidence a knowing violation, not merely a mistake.

6 In La.Atty.Gen.Op. 92-597, the attorney general opined that the use of a public credit card for personal
expenses is only permissible if the official or employee is in extraordinary circumstances, is given authority by
the public entity, and reimburses the public entity as soon as possible after the charges are made and before the
receipt of the bill. Routine use of a public entitys credit card for personal purposes is not permissible.



Page -9-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit


The ski trip leading to the Williams matter appears to be an annual one with friends. No corresponding
training or work-related seminar ever was claimed or shown to have occurred, even after opportunity to
provide such documentation was offered. This finding led to a closer scrutiny of past p-card use by the
Alexandria Police Department and Legal Division. APDs investigation was handled separately. In that
investigation, there were additional questions regarding charges violative of policy and several charges
involving use of identification information regarding attendees at meals for ostensibly public purposes, who
were not present according to those persons. In some instances, the persons demonstrated by clear and
convincing evidence they could not have been present. The City takes the position some of these instances may involve
permitted uses for public purposes with some individuals noted on receipts and documentation along with misidentified or wrongly
identified persons on receipts and documentation. While the APD has treated some of these as public record reporting
crimes, this Audit focuses on those without a public purpose identified.

7Williams confirmed during his hiring process he was accused of misusing a mall-issued credit card, for purely
personal purposes, while employed by the Alexandria Mall. Williams separated from employment at the
Alexandria Mall with no formal charges known to have been filed.

8Civil suit was authorized immediately upon discovery of the other counts outlined herein. The suit on behalf
of the City is to recover any losses including those resulting from violation of policy.

9 Full opportunity for exculpation means the Finance Division offered Williams the opportunity to address
and correct the problem after his claim of mistake consistent with La.Atty.Gen.Op. 92-597. Williams
repeatedly told the Finance Division it would be handled. The matter was not handled. When confronted
with the news the agent had been contacted, there was a clear indication the explanation was false. The City
Attorney also reached out to Williams representatives, requesting that a reasonable fund be placed in trust to
mitigate against other counts and avoid a civil suit and the spectacle with it. The City Attorney is required to
make reasonable collection efforts, deemed by past audits to demand a recovery suit. The City Attorney
requested placement of the reasonable estimate of the other counts in trust from Williams retirement.
Williams refused and instead and has maintained a defense that everyone else acted as he did. As shown herein, this
is patently false and was known by Williams to not be the pattern and practice of others. For example, the
Mayors p-card activity is not merely sample audited; it is audited receipt for receipt. The Mayors activity is
documented as to public purpose and attendees. All division heads were audited by sample and then audited
again following this incident. The internal audit is being conducted independently as well. To date, no
additional findings have been produced regarding other employees.

10 Alexandria public employees are permitted to use purchase cards for public purposes, including travel, meals,
and lodging. Credit and procurement cards are used by public entities to simplify the acquisition, receipt, and
payment of purchases and travel expenses incurred on the Citys behalf. Credit and procurement cards shall
only be used for those expenses that are for the Citys benefit and serve a valid and proper public purpose; they
shall not be used for personal purchases. Cardholders are responsible for exercising due care and judgment
and for acting in the Citys best interests. The Finance Director manages the use of credit and procurement
cards by executive-level employees. It is the Finance Divisions responsibility, through the audit and approval
process, to determine whether credit and procurement card use is appropriate. In addition to the other
limitations contained in this and other City policies, credit and procurement cards are governed by the
following restrictions:

No state time or money can be spent for a purely private purpose. The state constitution in Article
VII, Sections 9 and 10 states that state money can only be spent for a public purpose. That is, state
employees time at work must be spent for a public purpose. Further, the amount of state time or
money spent must be proportional to the benefits the public receives as a result. La.R.S. 42:1461



Page -10-
May 23, 2017
Information Release
Office of the City Attorney
_________________________________________________________________
WILLIAMS, D., P-Card Audit 2016-2017 PART 1-Internal Audit


provides that if public money is spent to benefit a private interest, employees may be personally liable
to pay back the money spent. This statute has been invoked when a state car or credit card was used
for a private purpose.

11Public bodies are mandatory reporters when handling matters of this nature, and may not internally handle
the issues simply because their efforts avoid an actual harm to the public, as here. To be sure, other queries
over the period led to policy violations and required repayments for p-cards. For example, if an employee
purchased an item that had an ostensible public purpose, even an agreed partial public purchase, the City may
require repayment if the public purpose is outweighed by the private gainor, at least, require some
equalization. Article 7, Section 14, of the Louisiana Constitution of 1974 provides that the funds, credit,
property, or things of value of the state or any political subdivision shall not be loaned, pledged, or donated to
or for any person, association, or corporation, public or private. La.R.S. 24:513(A) provides that municipalities
are local auditees under law. More specifically, La.R.S. 24:523(A) provides:

A. An agency head of an auditee who has actual knowledge of or reasonable cause to believe that
there has been a misappropriation of the public funds or assets of his agency shall immediately notify,
in writing, the legislative auditor and the district attorney of the parish in which the agency is
domiciled of such misappropriation. Reasonable cause shall include information obtained as a
result of the filing of a police report, an internal audit finding, or other source indicating such a
misappropriation of agency funds or assets has occurred. The district attorney, or other prosecutorial
agency, notified of such misappropriation may request audit assistance from the legislative auditor
with respect to the misappropriation.

B. For the purposes of this Section the terms agency head and his agency shall have the same
meanings as provided in R.S. 42:1102.

La.R.S. 42:1102 defines an agency as a department, office, division, agency, commission, board, committee,
or other organizational unit of a governmental entity. The Finance Division of the City of Alexandria, i.e., the
agency, issues purchase cards. The agency head is the Director of Finance and/or the Mayor of Alexandria
because an agency head means the chief executive or administrative officer of an agency or any member of a
board or commission who exercises supervision over the agency when a governmental entity is defined as
any political subdivision which employs the public employee or employed the former public employee . . . , as
the case may be.