BATON ROUGE, La. (AP) - The Louisiana Department of Environmental Quality didn't have proper controls over a state program meant to keep tires from being dumped illegally, allowing overpayments, according to an audit released Monday.
The report from the Louisiana Legislative Auditor's Office says DEQ allows waste tire processors to weigh their own tire shipments, rather than confirming the weight through a third party. The payments are based on weight.
"Those processors have an incentive and an opportunity to overstate the amount of processed material contained in payment requests submitted to DEQ," the audit says.
Louisiana pays for the disposal and processing of old tires. The waste tire program was started in 1989 to shrink the number of scrap tires dumped at roadsides and rotting in trash piles.
Residents pay a fee when they buy new tires, with the cash going into a fund to pay scrap tire processors for recycling the old tires. The processors pay tire dealers to get the old tires, bill the state's waste tire fund for processing the tires and sell the recycled product for other uses.
The program paid out $10.5 million in the 2010-11 budget year and $41 million over four years from 2008-2011, according to the audit. Five waste tire processors participate in the program.
"Without obtaining an independent confirmation of processed material weights from a third party or the end user, DEQ retains an unmitigated risk of fraud that could result in overpayments to processors," the report says.
DEQ Undersecretary Vince Sagnibene said the risk of a processor overstating the weight of the tires is minimized because of controls over the scales. He also said the department planned to randomly audit the waste tire processors to spot-check the billing.
The legislative auditor also detailed other, continuing accounting problems, saying DEQ didn't properly track certain revenue and didn't ensure the accuracy of time sheets and attendance records. The report says the problems have happened for multiple years.
The department disagreed with some of the findings and also said budget cuts forced layoffs of some administrative assistants who reviewed the attendance and time records. Sagnibene defended DEQ's performance and said adjustments were made to address audit findings.
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