Washington Parish received high marks for its audit ending Dec. 31 during a parish Council meeting Monday, night but the glad tidings did little to temper the foreboding anxiety of a looming budget deficit that could topple $200,000.

Auditor Wilson LaGraize of the accounting firm of Kushner LaGraize, L.L.C., praised the parish, and specifically finance director Donna Alonzo, for what he called “one of the best audits I’ve been associated with” since performing accounting duties for the parish.

“I think this year’s (audit) really reflects the parish’s books and records have been done in an extremely professional manner,” he said. “They’ve complied with the laws of the state of Louisiana and all of the rules of governmental accounting.”

The parish ended 2011 with a balance of $210,785 in the general fund, which is the equivalent of the government’s checkbook. According to the report, the parish assets exceeded liabilities by $38,331,385.

However, LaGraize quickly cautioned the council of a potential deficit of approximately $210,000 that is projected to occur at the end of 2012.

“It looks to me like this year we reached a critical mass,” he said. “The problem has become critical such as the council will now have to come up with some special measures in order to rectify a deficit fund, which is against the law.”

Council members recently learned of the pending deficit when members were notified the parish had to write off $800,000 deemed uncollectable from St. Tammany District Attorney Walter Reed. The debt traces back to a gentleman’s agreement Reed made with the parish more than 25 years ago to reimburse the parish for expansion of the DA’s Franklinton office.

However, the district attorney’s office stopped making payments for an 18-month period beginning in 2007 and since resuming payments in 2009 has not paid the parish fully for the added expenditures.

Parish officials have determined Reed’s debt stands at nearly $1 million but through a letter to parish attorney Wayne Kuhn the DA made it clear he would not be paying any of that debt.

Once it was deemed uncollectable, the parish was forced by accounting practices to write off $800,000, with the remainder still in a receivables account. By writing off the debt, it created a gaping hole in the budget, to the point where parish officials will be forced to go to other agencies to ask for cuts so as to avoid the deficit.

“(The shortfall) dramatizes the problem we have in the general fund this particular year,” LaGraize said.

“It’s more or less out of our hands,” Parish Councilman Mike Fussell said in response to a question from audience member Suzannah Fussell regarding the issue with Reed’s office. “We’ve been working with that office to try to get him to work it out. We’ve been seeing it coming but it’s like a snowball, when you see it, it’s right there. We tried to dodge it but we couldn’t.”

Councilman Chuck Nassauer said a contributing factor is the mandated expenses state government forces parish governments to pay. Those mandated expenses, which include supporting or subsidizing the offices of sheriff, clerk of court, coroner, assessor and others, must come out of the general fund, he said.

“If we have x number of dollars coming in and mandates are higher than what you have coming in, you either have to cut back or raise taxes, which nobody wants to do,” he said. “Talk about cutting back then you have to negotiate with these agencies. Baton Rouge told us you have to pay them. If you don’t have the money to pay them, Baton Rouge shuts the doors.

“We all have to work together to get these mandated expenses under control.”

Officials said that Parish President Richard Thomas would soon begin meeting with various agency directors to discuss how to trim expenses.

Councilman Ken Wheat, chairman of the finance committee, said he remains optimistic the issue can be resolved in the near future.