Hallandale Beach holds back records in “botched” audit; $20 million in contracts go unchecked

By William Gjebre,  

Hallandale Beach City Manager Mark Antonio

An outside auditing firm did not review more than $20 million in Hallandale Beach vendor contracts because the city failed to provide the information and limitations on the scope of the audit.

Auditors mention the large deficiency in an updated audit report to be presented to the city commission for review on Wednesday.

The initial draft audit, obtained by Broward Bulldog six months ago, stated that Hallandale Beach had failed to properly track business transactions made by the City Commission controlled Community Redevelopment Agency (CRA).

The city hired the Fort Lauderdale auditing firm Marcum Rachlin in August 2010 to inspect three years of vendor contracts that should have totaled $29.2 million. But the vendor contract file city officials turned over to the auditors for review only included contracts for a one year period totaling $8.9 million, the report says.

Auditors later discovered the discrepancy, but by then the terms of the scope of the review had been set and “Marcum’s procedures were limited to reviewing the vendor contracts that were included on the original listing provided by the city,” the report says.

The city is paying $60,000 for the audit.


Mayor Joy Cooper and City Manager Mark Antonio, who were critical of last summer’s draft audit, did not make themselves available to explain the discrepancy, despite repeated requests for interviews.

The city issued a press release late Friday that hailed the audit’s findings, but does not mention that more than two-thirds of the city’s vendor contracts were not audited.

“I am pleased that once all the information was reviewed by the auditors, the results show that city has and continues to follow best business practices,” said Antonio.

Of what auditors could check, a number of the key problems have been rectified but others remain, according to the updated report.

“It shows that the city does not have its financial house in order or doesn’t care about finances,” City Commissioner Keith London said.

London pointed the finger at the administration for an audit he said was “half-done…botched.”

“The city did not provide the information. We can’t blame the auditors; we got to blame the city,” he said. “It’s either incompetence or intentional, either way it’s unacceptable.”

London said he will ask his fellow commissioners to re-hire Marcum Rahlin to review the un-audited $20 million in contracts with vendors.

Auditors stated in both the initial and updated reports that the firm was retained to review procedures applied in vendor contracts between Oct. 1, 2007 and Sept., 30, 2010.

The review covered 136 vendor contracts totaling $8.9 million. The report does not say how many vendor contracts are involved in the additional $20 million in contracts.

Of the contracts it reviewed, auditors concluded there appeared to be proper approvals.


Questions about CRA business transactions came to a headafter former City Manager Mike Good was fired by the city commission in June 2010 after chronic absences from work. News reports stated an uncommunicative work style and questionable contracts also were cited as reasons for Good’s dismissal.

Commissioners asked for the audit a few weeks later. Marcum Rachlin was tasked with conducting “an extensive review of the city’s land acquisition program, developer agreements, the awarding of vendor contracts, and CRA expenditures and commercial loan programs,” according to Friday’s press release.

After the initial draft audit was made public six months ago, the city asked the firm to continue working and to revise the report.

The auditors’ updated version lessened some of the problematic findings, but some of the observations regarding land acquisitions and loans to businesses showed continued issues in record keeping.

The updated report cleared previously mentioned problems involving developer agreements with the city.

Regarding loans to businesses, totaling $1.5 million as of June 2010, the report said all agreements reviewed had been properly executed; no loans exceeded the prescribed interest rate; and only two loans did not adhere to a 15 percent forgiveness rate in repaying the city’s money. Those numbers were much higher in the first draft report. The report also said there were various documents still missing in 31 loan files.

The new audit reported progress regarding the location of missing land acquisition documents, as well as some continuing issues.

* Files for 30 acquired properties that were initially thought to be missing were located, but the files for 13 other properties that were later sold could not be found.

* The number of property acquisition files reviewed dropped to 40 from 49 after the files of some properties were accounted for. But 39 of the 40 files were incomplete, and 15 lacked contain purchase authorizations.

In Friday’s press release, Antonio said the report shows the city has “followed almost every policy. The areas they wanted us to address involved misfiled or misplaced documents. They recommended additional checks be added to ensure this does not recur. We agreed and have implemented changes.”

William Gjebre can be reached at [email protected]




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  • The results of the Marcum LLP limited audit of the city are finally out, but before you begin to review it, a quick overview of how we got to this point is necessary.

    Exactly two years ago, concerned residents of Hallandale Beach, myself included, greatly unhappy with years of having witnessed curious policies and inconsistent practices at Hallandale Beach City Hall that seemed designed more to hide financial information from the public than reveal it, began the push to force the City to hire an auditor to perform a special audit.
    Over time, with great reluctance and skepticism from some elected City Commissioners, the public finally prevailed upon the City Commission to agree to hire an auditor to perform something called “Agreed-Upon Procedures”.
    This was NOT a full-blown “special audit” as you may have come to know the term, but rather something quite short of that, wherein the City was willing to “agree” to have some aspects of their practices audited, but not all of them.
    That’s why only certain areas were examined in the report that’s now on the city’s website, but others remain unremarked upon.

    The preliminary report of August 2011 noted 515 “exceptions” to the City’s own written rules and procedures.
    The just-released report noted 255 “exceptions” to the City’s procedures.
    That is a large number of exceptions, but actually represents a 50% reduction from last summer.

    While some of the reduction in the number of “exceptions’ is due to requested city records that were initially “missing” finally being found, and given to the auditor, most of the eliminated “exceptions” were due to what can only be called a very curious sense of after-the-fact rationalization.
    It’s an after-the-fact rationalization of a sort that most Hallandale Beach residents would find completely unacceptable where they work or do business, since it literally raises more questions than it answers.

    That rationalization consists of simply stamping “subject to City Manager’s review, which has the authority to change the procedure” and in some cases, “subsequently approved by the City Commission” on those “exceptions.”

    I am surprised that any “exceptions” were noted in the new report if the City Manager or the City Commission has so much latitude that they can both change or ignore written procedures before or after the fact.
    What is the reason for instituting and codifying a series of City Commission-approved city “procedures” if the City Commission, its professional staff and employees does not follow its own written rules, and has the ability to declare anything and everything an exception, after-the-fact, if they so choose?

    Even in its limited scope, the Marcum LLP report we now have been given is a very damning portrait of the last ten years of the city’s operation. No matter how much lipstick the City applies to it, it is still not pretty.
    If you are a Hallandale Beach resident who cares about your city’s future and Quality of Life, it should be required reading prior to next November’s elections.

    Especially since we still have only seen part of the looming financial iceberg, not all of it.


  • Csaba is so right on target. HB desperately needs him on that Commission.

  • As a former city employee I have observed Mr. Antonio as the city finance director as weak kneed and untruthful when he denied his comments to me during my employment.

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