Editor’s note: Information taken directly from State of Louisiana Legislative Auditor’s report.
Jennifer M. Mahfouz, former administrator for the Red River Parish Communications District, issued 10 extra paychecks to herself, totaling $17,112 between July 18, 2016, and Jan. 3, 2018. In addition, District records indicate that from January 2015 to December 2017 Mahfouz consistently issued herself paychecks prior to the end of the District’s pay periods and appears to have altered the District’s electronic accounting records to conceal her actions.
By issuing extra paychecks to herself and altering District records to conceal her actions, Mahfouz may have violated state laws. Further, by issuing herself checks before the end of the pay periods, Mahfouz appears to have loaned District funds to herself in possible violation of the Louisiana constitution. Mahfouz was the District’s sole employee during the period covered by our audit (our audit period).
As the District’s administrator, Mahfouz was responsible for overseeing the daily operations of the District, including verifying physical addresses for the “911” system, paying bills, issuing paychecks, and entering transactions into the electronic accounting system. District policy requires two signatures on all disbursements including paychecks issued by Mahfouz. Mahfouz and the seven voluntary board members were authorized signers on the District’s sole checking account.
During our audit, we found that Mahfouz issued paychecks for biweekly pay periods that were signed by her and one of four board members. Although Mahfouz completed and maintained time sheets for parts of our audit period, none of them appear to have been reviewed or approved by an appropriate supervisor. While preparing the District’s annual financial report for the year ended Dec. 31, 2017, the District’s external CPA discovered that Mahfouz may have issued herself extra paychecks and notified the Louisiana Legislative Auditor March 1, 2018. Mahfouz was terminated from her position April 8, 2018. Extra Paychecks During the period of our audit, we found that Mahfouz issued herself multiple paychecks for the same pay periods. For example, from July 11 to July 21, 2016, Mahfouz issued herself three paychecks for the two-week pay period beginning July 18 and ending July 31, 2016. Each check appears to have been signed by Mahfouz and a different board member. Because Mahfouz issued herself multiple checks for the same pay periods, we compared the number of biweekly pay periods during calendar years 2016 and 2017 to the number of paychecks that Mahfouz received during these years. In addition to alternating which board members signed checks, District records indicate that Mahfouz altered the dates that checks were issued within the accounting system to conceal extra paychecks.
According to District records, Mahfouz’s position became full time beginning January 2017, which increased her biweekly salary from $1,140 to $1,800 ($3,600 per month). Although her full-time pay increase was not authorized until January 2017, Mahfouz issued herself an extra paycheck in the amount of $1,800 Dec. 26, 2016.
However, accounting system records indicate that Mahfouz deleted the check and reissued the check using a different check number and date (January 9, 2017). As a result, the $1,800 check that Mahfouz issued and negotiated Dec. 26 was not included on the District’s financials for the year ended Dec. 31, 2016. Further, because the check was altered in the accounting system, it appeared as though Mahfouz’s pay increase was properly implemented in January 2017. Early Paychecks District records indicate that Mahfouz routinely issued herself paychecks before the end of the District’s pay periods. From January 2015 – December 2017, Mahfouz’s paychecks cleared the bank before the end of the pay period on at least 67 occasions. Some of these checks cleared the bank prior to the dates on the checks. According to the District’s accounting system records, Mahfouz appears to have altered the dates that the checks were issued to match the appropriate biweekly pay periods. For example, she issued herself check number 1830 on March 14, 2016, for the pay period beginning March 14 and ending March 27. This check cleared the bank March 15. Accounting system records indicate that Mahfouz entered the check into the system, deleted the check and reissued the check in the accounting system using a different check number (1831). One day after the pay period ended, Mahfouz changed the check number back to 1830 and changed the date of the check to March 28. Mahfouz told us that she did not realize she received extra paychecks and does not know how she overpaid herself.
She acknowledged she made mistakes writing checks within the accounting system. When that happened, she said she deleted the check with the incorrect information and rewrote the check using the same check number. Mahfouz stated that she received checks early because she was trying to change her pay schedule to alternate with her husband’s pay schedule. She further stated that on other occasions she received checks early because she knew she would be out of the office on the regular payroll date.