The Louisiana Department of Justice (DOJ) is disputing an audit by Louisiana Legislative Auditor Mike Waguespack that found the DOJ didn’t ensure proceeds to the Legal Support Fund were classified in a timely manner within the state’s accounting records. In addition, the DOJ did not ensure timely notification of deposits to the fund to state entities.
“The DOJ has not established or implemented formal policies and procedures to consult with attorneys working on its cases to aid in the evaluation of deposits received to timely identify and classify deposits received into the Legal Support Fund within the state’s accounting records,” Waguespack’s report states. According to state law, the attorney general is supposed to notify the State Treasurer, the Joint Legislative Committee on the Budget, and the Commissioner of Administration “immediately upon receipt of any proceeds received,” and deposited into the Legal Support Fund.
According to the audit, in a test of four deposits totaling nearly $42 million between July 1, 2020 through June 30, 2022, it took between 27 and 122 days before three of the deposits were classified into the fund within the state’s accounting system. In addition, it took between 33 and 180 days before the State Treasurer, the Joint Legislative Committee on the Budget, and the Commissioner of Administration were notified of any of the deposits.
Attorney General Jeff Landry disputed the findings in a letter to the auditor on August 7, stating that, “Complex litigation, multidistrict litigation, and litigation involving outside counsel complicates and delays final classification” of funds received. “Even if the Department were to implement formal procedures to consult with involved attorneys would aid in the evaluation of deposits received, these procedures would not lead to ‘timely’ classification.”
In spite of the dispute, Landry stated that the DOJ will implement formal procedures to consult with attorneys for classification of deposits. The procedure will be created, implemented, and under the jurisdiction of the Administrative Program Fiscal Division.
A second finding of the audit was that the DOJ did not remit deposits from the Going-Out-of-Business Escrow Fund for more than a year to the Unclaimed Property division of the State Treasury.
“As of June 30, 2022, there were $65,167 of deposits within the GOB Escrow Fund that were held within the fund for more than one year, and as such, should have been remitted to Unclaimed Property,” the report states.
According to state law, the DOJ must remit deposits within one year. According to Landry, the Department will revise its policies and procedures for reviewing deposits within the escrow fund to ensure compliance with state law.
