VCAC audit findings note tax issues, deficit

An independent audit of the Vernon Community Action Council Inc. (VCAC) includes findings regarding late federal payroll taxes and problems with unpaid state withholding taxes due to cash flow shortages.

The audit report was released publicly Monday through the Louisiana Legislative Auditor's Office. It was conducted by accountants Steven M. Derouen & Associates, of Lake Charles, and was for the fiscal year ending Dec. 31, 2013.

Auditors also found that the VCAC had a net deficit of $141,373 for the fiscal year. The VCAC, the audit states, plans to cut some employees' work hours, sell unneeded property and equipment, and increase fundraising efforts to make up the budget gap.

"Management is of the opinion that these steps will eliminate the deficit of the organization in less than one year," the report states.

Regarding the findings, the report says payments of federal payroll taxes were paid late at various times due to cash shortages, a repeat finding.

"There were no remittances of state income tax withholdings during 2013. These late payments resulted in penalties and interest," the audit states.

Auditors noted problems with payroll tax reports, and found that the 2013 Form 941 payroll tax returns gross wages did not agree with W-2 reports or wage records in the general ledger.

"After further analysis, it was concluded that the Form 941 payroll reports were understated by approximately $20,000 in wage reporting. This occurred due to the failure to reconcile the payroll tax reporting remittances to the wage records per the general ledger or the Form W-2s. This underrreporting of wages on the Form 941 will result in penalties and interest," the report states.

The report also addresses bank account reconciliation issues.

"During the audit, it was noted that various cash balances reported on the Council's general ledger did not agree with their respective bank reconciliations. After further analysis, it was concluded that various reconciling items were missing between the operating, emergency food and shelter, and payroll bank reconciliations and the general ledger. This occurred due to the failure to agree the bank reconciliation balance to the general ledger," the report states.

Auditors recommended the VCAC implement accounting procedures to prevent the problems. In their response to the findings, VCAC administration said they would be taking steps to remedy the issues.

The VCAC is a non-profit organization that sponsors community, low-income and senior programming for parish residents.

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