MARCO ISLAND — Questions of impropriety in Marco Island’s finance department raised by former interim city manager Dana Souza led the city’s council to order a forensic audit of the city spanning the past five years.

Monday evening’s unanimous decision came on the heels of Souza’s resignation Oct. 16. Souza served as the city’s parks and recreation director for five years and served as interim city manager from March 24 through mid-May.

When the council appointed Steve Thompson as city manager, Souza provided him with a “transition report” outlining some of the concerns that came to light while he served as the interim manager.

“I believe there are management and oversight issues in (the finance) department,” Souza wrote to Thompson in May. “I believe these issues could include management apathy, a practice of cleaning up project account overruns versus managing project accounts, unauthorized moving of expenditures from account to account and misleading City Council when asking for contract approvals,”

The release of the report to City Council coincided with Souza’s announcement last week that he took a job as parks and recreation director for the city of Greenville, S.C., and he will begin work there in mid-November.

The implications raised by the documents is reason to add an emergency addendum to the City Council meeting agenda, said Councilman Frank Recker.

Chairman Bill Trotter and Councilman Wayne Waldack were the only two opposed to Recker’s recommendation to discuss the city manager’s performance, particularly regarding Thompson’s response or lack of response to the financial concerns Souza raised.

The 5-2 vote created a new agenda item that took council and the community into a three-to-four-hour discussion about plans for Souza to become assistant city manager, whether Thompson should be fired and whether a forensic audit — meaning it could be used in court — was necessary.

Recker said he believed Souza may be leaving Marco Island due to “whistle blower retribution” and added that learning about these financial concerns from the public instead of from the city manager was “highly disconcerting and raised grave concerns about (Thompson’s) judgment.”

Trotter said he would prefer to discuss Thompson’s performance during his six-month review, which is due in November.

“I too have concerns about the financial irregularities,” Trotter said, adding that he would prefer to allow all councilmen and Thompson to review the information so as to provide a “due process approach.”

Specific concerns in Souza’s transition report included a request made in May by Public Works Director Rony Joel for a $9 million transfer from the 2009 budget to the 2008 budget. It was for a water project council approved in April. Council had not been advised that the project was not funded in the current year’s budget.

Souza said he also learned $600,000 was transferred from the general fund to the utility fund for the North Collier Boulevard project without council approval.

Souza told Thompson in the report that he found the North Collier Boulevard project was nearly $800,000 over budget.

Subsequently, a report released Oct. 15 by Finance Director Bill Harrison and Joel states the approximate $40 million Collier Boulevard reconstruction project was completed $2.5 million under the amount available for the project.

“I don’t understand why finding $2.5 million is bad news,” Waldack said.

Thompson defended the changes in the North Collier Boulevard project, saying council was advised the project was over budget May 21, 2007, and that a final reconciliation of the project now indicates it was $2.5 million under budget.

Thompson also defended the legitimacy of transferring $600,000 from the general fund to the utility fund for the project because some costs were utility costs and some, such as roads, were legitimate general fund costs.

“I know no more after this than I did before I got here tonight,” Recker said after the meeting.

Council member Ted Forcht said he can’t tell what to believe when the numbers keep changing.

“I don’t care if it’s higher. I don’t care if it’s lower. I just want the truth,” he said.

Souza stood by his transition report and also stood by his recommendation for Thompson.

Souza sought confirmation from other city managers on the issues, including Naples City Manager Bill Moss, formerly Marco’s city manager, who informed Souza in May that Joel and Harrison deserved reprimand for their actions.

Resident Bill McMullan also made arguments suggesting council request a forensic audit.

“You’ve said the buck stops here,” McMullan said. “How can the buck stop here if you have no idea where the buck is?”

Council voted 7-0 to collect bids on a five-year forensic audit, which will provide an outside review of every city document and transaction. Councilmen expressed specific interest in a forensic review of the Collier Boulevard project and the septic tank replacement project.

Council also voted 7-0 to table a review of Thompson’s performance until the next City Council meeting in November.

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