FERRIDAY — A report by the legislative auditor says a check substitution scheme was used to replace missing cash in the Town of Ferriday’s utility records.

After examining records from nine randomly selected days from 2007, the auditor’s office found that $3,568 in cash collected from customers was missing.

The report states that total funds deposited were for less than the total payments the town received, and that the town received and deposited certain checks but that those checks were not recorded in the utility system.

Those checks were used to make up for the missing cash, the report said.

The report also said that customer billing records were either deleted or a credit was posted to the account to conceal the missing cash, and that billing stubs for certain checks were missing even though the checks were deposited.

The check substitution scheme may go back as far as October 2004, the report said.

But Ferriday Mayor Gene Allen said he has never been aware of any check substitution scheme and did not believe it existed.

“We have not found that report to be an accurate report,” Allen said.

Some of the problems could be blamed on a computer glitch, Allen said.

Whether or not the scheme was illegal depends on how it was used, Assistant Legislative Auditor and Director of Advisory Services Joy Irwin said.

“If a public official takes the money and uses it for their own purposes and defrauds the taxpayers of the area then it is illegal,” Irwin said.

The auditor’s office recommended the town place more controls over billing practices than were in place at the time of the audit.

“There were gaps in our knowledge about what exactly happened because there were some control deficiencies,” Irwin said. “We don’t know what was done, who did it and how it was done.”

The legislative auditor’s office provided information about the scheme to the Seventh Judicial District Attorney’s office because of legal requirements.

The Attorney General’s office is also providing investigative assistance to the DA’s office.

The report stated that the legislative auditor’s office would not provide an opinion about the town’s financial statements, internal workings or legal standing because the report was “substantially less in scope than an audit conducted in accordance with generally accepted auditing standards.”