City audit 'revealing'
By Sarah Stover
Posted: 2007 Jan 26 - 01:19
SINGER ISLAND - An audit demanded by residents proved what they already suspected: that city of Riviera Beach and redevelopment agency officials need to keep better track of expenditures and set policies in place for record-keeping procedures, an auditor's report said.
The Citizens for Responsible Growth and the Singer Island Civic Association - two citizens watchdog groups - brought the finances of the City Redevelopment Agency and the city to the attention of the state, said Singer Island resident Dawn Pardo.
The CRA and the Riviera Beach City Council are one and the same.
"Multiple individuals on both sides of the (Blue Heron) bridge were involved also," said Singer Island resident Bob Nevins.
The Florida Auditor General's Office conducted the audit after Florida's Joint Legislative Auditing Committee, chaired by state Rep. Carl Domino, R-Jupiter, voted for it in October 2005.
"In my mind, the findings are criminal," said Ms. Pardo.
When auditors checked some of the purchases made with procurement cards, or credit cards given to employees, a lack of receipts to show what was purchased and why, was a common problem.
One of the cards showed a charge of $2,093 for repairs made on a 1992 Lexus, which was not listed as a city-owned vehicle, the audit report showed.
Auditors also found fault with revenues from a half-cent sales tax being applied to repayment of a bond issue used by the CRA.
Florida statutes mandate that half-cent sales tax is to be used by municipalities only for city-wide programs, municipality utility tax relief or to pay interest on capital projects.
"The fact that proceeds of the notes were spent on preliminary expenditures for consultants, engineers and planners, and not on bricks and mortar, does not alter their characterization as 'capital' or for a 'capital project' any more than expenditures for engineers for a city jail become 'non-capital'," said city manager Bill Wilkins in a letter to the auditor's office.
But, auditors also had an issue with that statement since, according to their findings, money was spent without an agreement with a master developer and no aspects of projects outlined in a plan created in 2001 by the CRA were accomplished.
The audit also found that CRA executive director Floyd Johnson's contract provides him with a city vehicle, but the agency has no policies concerning mileage or other uses.
Lack of record-keeping policies might have contributed to city officials going over budget for the past two Jazz and Blues Festivals.
"The City Council approved budgets of $415,000 and $660,000 for the 2005 and 2006 events, respectively. However, actual expenditures exceeded budgeted expenditures by $21, 203 and $395,988 for the 2005 and 2006 events, respectively," the audit report said.
The city also spent more on the events than it made. Records for 2005 showed proceeds totaled $315, 751, but expenses totaled $436, 203; for 2006, revenues totaled $287,503, but expenses totaled more than $1 million.
Riviera Beach officials used the city's general fund to cover the difference, but auditors cautioned that continuing to do so could lead to more problems.
Auditors also found that the city had not remitted sales tax from the annual event to the Florida Department of Revenue for the past five years.
After that finding, city officials calculated the total, plus interest, and sent the $28,460 it owed.
Since the city sent in payment, the department waived the $12,250 in penalties it would have charged the city.
While the city made good on their misstep with the taxes on the jazz festival, Mayor Michael Brown had still not paid for the use of Barracuda Bay, a water park, by press time.
He told the city's parks and recreation department in 2005 that he would pay the admission cost ($3 per person) for the spring break period, which ran from March 22-27, 2005.
In April 2005, he received a letter requesting payment in the amount of $5,559, but he refused to pay until he got more information on how the invoice was calculated.
The mayor did not answer auditors when asked about the issue.
Some of the issues have begun to be resolved, Mr. Wilkins said.
In the letter to the auditor's office, he said he is reviewing the current policies and has, "recognized that the current paper-based system is obsolete," and is considering implementing an electronic system. Mr. Wilkins also agreed with the findings in regard to credit card use. Purchasing guidelines have been revised and receipt requirements have been enforced, he said in the letter.
The city will have a chance to make changes suggested by the auditors before they come back in 18 months for a follow-up audit, said audit manager James Dwyer.
However, residents are skeptical the city's staff will make the necessary changes.
"The city has demonstrated to us in the last six months that they are incapable of following their own ordinances, let alone recommendations from auditors," said Ms. Pardo.
"A perfect example is the Kinsey contract. The Council/CRA Commission-ers hired Mr. Kinsey, and agreed to a contract he wrote, which may cost the city in excess of $1 million in less than a year, yet there was no solicitation for proposals, no bid or any indication that the city was seeking a consultant, prior to the mayor presenting a recommendation to hire him.
"The city nor the CRA budgeted for this expense, yet the Council and CRA Commissioners approved it. Does this represent a prudent expenditure of public funds? I think not," she said.
"The audit was revealing, but not more so than I expected. With clear indications of criminal activity, I am disappointed that its issuance was not accompanied by indictments," said Mr. Nevins. "Hopefully, the follow up by the State Audit Committee will help to resolve some of the problems." Both residents agree that as long as the same employees and council members are around, things will not change.
"Both the city and the CRA's finances are out of control, because you have the same five people approving the finances: the city council. The council, mayor, city attorney and city manager need to step down immediately and the state must come in and sort out this mess," said Ms. Pardo. "With all the tax dollars this city takes in, our city should look like a tropical paradise instead of a slum in a Third World country. The honest, hardworking, taxpaying citizens of Riviera Beach deserve much better."
"The business of the people is not being tended to, (and) public funds are being squandered. The ultimate solution may be state intervention to rehab the city," said Mr. Nevin.
"People need to resign, to be fired and/or sent to jail. The mayor suggested a need for a 'strong mayor' government form. That is not the solution, it is the problem."
Calls to Mayor Brown and Mr. Wilkins were not returned by press time. Mr. Johnson was out of the country and could not be reached for comment, spokespersons from the CRA office said.
To view the audit report, visit www.state.fl.us/audgen.