By William Gjebre, BrowardBulldog.org
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.
DISCREPANCY UNEXPLAINED
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.
CITY SUSPECTED PROBLEMS
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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