Louisiana Citizens Board Member ‘Outraged’ by Cost of State Audit

The board of Louisiana’s “last resort” homeowners insurance company wants to quiz the legislative auditor over a $480,000 price tag for a review of the firm’s 2008 finances.

The governing board of Louisiana Citizens Property Insurance Corp. has asked chief executive John Wortman to invite Legislative Auditor Steve Theriot to its November meeting. Several members said they couldn’t understand why Theriot’s audit cost that much after the company got a much lower cost estimate from a private accounting firm.

Theriot was unavailable for comment, but his top assistant, Daryl Purpera, said Theriot will be glad to answer all the board’s questions.

State law requires that Citizens’ books get audited annually, and the company’s board initially had wanted to hire Metairie-based LaPorte Sehrt Romig Hand for the job. Steve Cottrell, Citizens’ chief financial officer, said LaPorte had agreed to perform the audit for approximately $135,000 and finish it in less than two months.

However, Theriot told the board that his staff would do it instead.

The price and amount of time it’s taken triggered questions from several board members. It also irked some that the auditor’s office hired LaPorte as a subcontractor on the audit.

“As a board member, I’m outraged by this,” said Eric Berger, a Metairie insurance executive appointed to the board by Gov. Bobby Jindal. “It seems to me the state of Louisiana is getting milked.”

Purpera said the audit should be complete by the end of November. He said he understood the board’s concern, but the auditor’s office is taking the time it needs to perform a thorough investigation of the company’s books. He added that the ultimate cost could be less than the $480,000 maximum.

Topics Louisiana