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The city of Grambling, home to one of the nation’s most prominent historic black universities, is clinging to its financial life, according to the latest audit.
An audit performed by Banks, Finley, White & Co., a Jackson, Miss., based CPA firm, concluded there is “substantial doubt about (the city’s) ability to continue as a going concern.”
It was released Monday by the Louisiana Legislative Auditor.
But Mayor Edward Jones, who said he took over a financial disaster left from the previous administration in 2011, insisted the city remains “a viable concern” and is on track to overcome a $415,913 general fund deficit.
Developments like Legends Square are expanding the city of Grambling’s retail tax base. (Photo: Greg Hilburn/USA Today Network)
The auditor’s report seems to confirm Jones’ assertion of progress and that he was left holding the bag.
“There have been many instances since January 2011 whereby management has learned of prior obligations, such as liability Insurance and worker’s compensation insurance, that contributed to the current deficit in that these old bills had to be accrued,” the report reads.
“The old bills also took cash that was needed to pay current bills. Current management has made a concerted effort to make repairs and improvements to city facilities and systems. This effort has caused a temporary increase in expenditures that is expected to result in savings In the long run by properly maintaining facilities and systems and preventing unnecessary repairs.”
Brad Cryer, the Legislative Auditor’s director of local government service, said his office plans to dispatch a group of advisers to Grambling and other cities and towns with similar problems in the coming weeks.
But Cryer said there has been no discussion of a state takeover as has previously been the case in towns like Jonesboro, Richwood and St. Joseph with a fiscal administrator.
“Grambling is still a long way from that point,” Cryer said. “We are concerned, but the city is able to pay its bills. Our goal is to reach out now and offer help so it never gets to that point.”
Jones said the city is focused on growing its business tax base, pointing to the new Legends Square retail development that already includes a Hibbett Sports store and Dollar Tree.
He said a new supermarket will open in the development within two months.
“We have to provide options for our residents to spend there money here rather than go elsewhere,” Jones said.
The city’s and Grambling State University’s finances aren’t officially intertwined other than a shared operating agreement for the sewer treatment plant, but President Rick Gallot said each depends on the other.
“The financial health of each institution is important to the other,” said Gallot, a Grambling native. “You can’t really completely separate the two.”
William Rutlege, who attended the university in the 1940s and moved back to the city in 1975 after retiring from the military, said he is concerned about the audit, but wouldn’t live anywhere else.
“There is such a pleasantness in this town; it’s safe and close to the university,” Rutlege said. “It’s important for the city to be financially stable so we can focus on all of the great things about this community.”
Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1