Councilman investigated

FRANKLIN — An audit focusing on a St. Mary Parish councilman will likely draw a grand jury appearance after questionable transactions on an account not sanctioned by the city were found.

The city of Franklin requested Darnall, Sikes, Gardes and Frederick Certified Public Accountants of Morgan City to conduct an audit surrounding the transactions of an account started by former Development Director Michael Domingue.

Audit findings state that Domingue opened a non-city account using the city’s tax identification number. Transactions researched in the audit show that money from the Franklin Community Development Fund was used to pay personal credit cards bills, as well as donations to various groups.

Domingue, a parish councilman and chairman of the council’s finance committee, has not been employed with the city since November.

“I have received a copy of the audit. I have received a copy of the police investigation into the issues raised in the audit. I have received the referral letter from the legislative auditor’s office. I’m reviewing all of those things,” said Assistant District Attorney Jim McClelland.

McClelland said his review should be finished within two weeks.

“I anticipate we will schedule a case before the grand jury on July 23,” he said.

Mayor Raymond Harris said he was approached by merchants questioning the account statements.

“They saw some things that looked suspicious, and they thought the funds belonged to the city of Franklin. I thought the funds belonged to the merchants but they wanted to show me the pattern of transactions,” Harris said.

Harris met with the merchants along with Police Chief Sabria McGuire and Chief Financial Officer Bianca Phillips to determine whether the issue was a matter of poor bookkeeping or something serious.

“We saw a pattern, and the police chief thought it was something she should look into. She did and she gave it to the D.A.’s office, and they thought it was a matter that should be looked into further,” Harris said.

The audit began in February and focused on bank statements and copies of checks from Jan. 1, 2001, to Jan. 10, 2007, when the Franklin Community Development account was closed. The account was originally opened July 14, 1992, at First Commercial Bank, which is now Capital One, but changes in ownership prevented the auditors from obtaining documents before 2001.

The audit only refers to a “former city employee” but Harris confirmed that the employee is Domingue. Auditors found that only Domingue and a bank employee were designated to sign for the account. Only Domingue’s name appeared on the checks. The city’s tax identification number was used to open the account, which classified the account as “public funds.”

Harris said the account was opened without the consent of the council, despite the tax identification number being used.

“Our cash accounts are opened by council resolution. None of these accounts were opened by council resolution. None of them had council approval. The mayor, the city clerk and two councilmen are always on the signature cards. No elected city official was on any of these signature cards,” Harris said.

The audit states that the City of Franklin Office of Development/Main Street cash account was opened on Aug. 24, 1999, by a group of local merchants with the intent of “creating and promoting events in the downtown area.”

The audit stated that a $1,000 contribution was distributed into the City of Franklin Office of Development/Main Street cash account on Oct. 2. On the same day, a check for $1,000 was deposited into the Franklin Community Development Fund. Four days later, a $1,000 check from that account was made to Domingue’s personal credit card account with “silent auction prizes” in the memo line. No support for auction purchases was found, and purchases in that amount could not be matched to the credit card statement.

A total of $7,492 in deposits were made to the Franklin Community Development account from the City of Franklin Office of Development/Main Street account. The audit noted $6,203.52 in deposits to the account from merchants and citizens.

The audit also found that purchase orders, vendor invoices or any other forms of proof of expenditures from the account were not found, a violation of the city’s purchasing policies.

The auditor noted $9,426.34 in checks were written to “MC Bank” from April 9, 2002, until the account was closed. The checks were traced to personal credit card statements for $7,282.14 in expenditures. The auditors did not find any documentation to support the expenditures and could not match credit card purchases to payment amounts from the account.

During the audit, purchases from the credit card statements not related to food or travel from Jan. 1, 2004, to Jan. 10 of this year were compared to the payments applied to the account. The auditor determined $2,867.36 of purchases and $10,028.79 in payments applied to the Franklin Community Development Fund account, leaving more than $7,000 unaccounted for.

Other items listed in the audit include: