Louisiana’s environmental regulator failed to fully collect past-due penalties totaling $7,205 for two companies that previously had reached agreements with the agency, state auditors said Monday.

The Louisiana Department of Environmental Quality also hasn’t done enough required internal checking of its assets and of the application of agency procedures to ensure they are being followed, the auditors added.

The past-due penalty amounts due to DEQ’s Hazardous Waste Site Cleanup Fund and other breakdowns were uncovered in a recent review of DEQ’s internal financial checks, according to a report made public Monday.

The latter findings about internal review were repeats of the conclusions of two prior state audits of the $150 million agency and, in a response, agency officials acknowledged that a corrective plan due in 2021 to begin fixing those past breakdowns of internal quality assurance hadn’t been submitted.

State auditors found DEQ had conducted three internal audits in the past two years, although past review plans had identified 13 “risk areas” with the department. 

Predating the current DEQ leadership, the internal checking failures were blamed by DEQ Secretary Aurelia S. Giacometto on the agency’s former sole internal auditor, who was no longer with DEQ by July 21.

“These types of failures will not occur under my leadership,” she wrote in a Dec. 20 response.

The new internal audit director began working Dec. 9, but the department had still been working through Dec. 11 to hire the director’s audit manager.

The former DEQ auditor had told state auditors, however, that “his resources were dedicated to projects as requested by management, rather than projects outlined in the annual internal audit plans developed” to address past risks found by state auditors.

Giacometto disputed the former auditor’s statements, saying that person “was responsible for the ineffectiveness found in this audit.” She told state auditors that “his supervisor should have been consulted regarding the validity and veracity” of those statements.

“In short, the internal auditor could be biased in his response to the” Louisiana Legislative Auditor, she added.

Giacometto told state auditors that that the agency will hire two new internal auditors who will assess the past five years of the agency’s internal auditing and look at “high risk” areas in the department, including enforcement processing, contract monitoring and travel reimbursement.

The new auditors will also report back on the quality assurance efforts within three months and have an annual internal review finished before the end of 2025.

The past-due fines of $6,500 and $705 were the remnants of larger amounts and were uncovered in a check of 25 penalty agreements or settlements to the hazardous waste fund between July 1, 2022, and May 31, 2024, auditors said.

The remaining $6,500 had been due in September 2022, but auditors found the amount had still not been collected by June 30 and could find no evidence of efforts by DEQ to collect the fine.

The smaller uncollected penalty, for $705, was part of the agency’s voluntary expedited penalty program and had been due April 1 but hadn’t been collected by June 30.

In a third instance, auditors said DEQ officials took a little more than a year to follow up with a company — between February 2022 and February 2023 — after initial correspondence about potential violations and expedited penalties.

In response, Giacometto wrote that the agency does not agree with the auditors’ findings because the expedited penalty program is voluntary and has no “prescribed timeframe for the issuance of a formal penalty” or for its payment.

“LDEQ strives to strike a regulatory balance and ensure its enforcement process is fair, deliberate, and appropriate,” Giacometto wrote in her response. “There is no receivable or payment due until the Respondent agrees to the penalty. The agreement drives this process when it is executed.”

The larger past-due fine balance of $6,500, however, was not part of the expedited program but a settlement.

The smaller past-due fine was part of the voluntary, expedited program, but the fine, auditors said, had a “due date established in the executed expedited penalty agreement.” The date was April 1.

That balance of $705 was collected later this year after DEQ made contact with the company in September, auditors said.

Auditors’ review of the annual and other fees collected for air, water and other kinds of permits, for motor fuel deliveries and other similar fee programs found they were administered correctly, as were the processing of employee pay and personnel changes.

State auditors are still working on a separate review of workplace culture inside DEQ that includes an employee survey. Some outgoing officials have faulted Giacometto for her management style. Legislative Auditor Mike Waguespack said the final public report was “in process.”