Audit: NOLA S&WB may have violated state law with unreliable record-keeping

Report also cites outmoded power standard as significant expense

Chris Miller
November 12, 2018 - 11:47 am

The Louisiana Legislative Auditor's office released details of its audit into the New Orleans Sewerage and Water Board following the August 5, 2017 flood that exposed serious issues with New Orleans' drainage system.

The report raises concerns that some Sewerage and Water Board practices may have been contrary to state law. It also highlights a number of inefficiencies within Sewerage and Water Board operations, particularly in areas regarding contracts, drainage, and power generation.

"We identified control and compliance deficiencies, including possible constitutional violations relating to the donation of public funds, possible bid law violations, lack of appropriate approvals, and insufficient monitoring of conflicts of interest," the report stated.

"The S&WB did  not  have  adequate written contract policies and procedures over (1) recordkeeping and reporting, (2) procurement, (3) monitoring, (4) change orders and amendments, and (5) payments. Contract recordkeeping is not centralized, nor is there centralized management review and oversight of all contracts."

The auditor's report notes that the water board would hold an annual "employee awards" banquet at a cost of up to $340,000, handing out 10-and 24-karat gold jewelry up to $449.50 in value. New S&WB director Ghassan Khorban agreed with the auditors recommendation to cease this practice, and said the banquets are no longer being held.

Auditors also took note that the New Orleans Sewerage and Water Board operates a large number of drainage pumps on 25Hz electrical power, when other drainage systems in the metro area use 60Hz power. The 25Hz system is an outdated standard, and as a result, S&WB generates its own power for those pumps. The audit said that doubles the cost of power for S&WB compared to using cheaper power available from Entergy. In response, Khorban points out that the New Orleans drainage system was built decades earlier, when 25Hz power was the standard. He also said S&WB has added 60Hz systems to its drainage system.

Click here to read the Legislative Auditor's report.

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