Forensic audit response: Price tag a shocker, no fraud, no surprise

MARCO ISLAND — It was a near chorus response to the findings of a lack of fraud in the forensic audit of Marco’s $42 million, seven-year Collier Boulevard reconstruction project. “No surprise.”

The firm, James Moore, reported no findings of fraud or intentions to deceive, however addressing months of concern and speculation arising from a transition report by exiting interim city manager Dana Souza more than $1 million in misallocations, or money assigned to the wrong account, were found, according to the audit result presentation Monday afternoon.

Though many say they weren’t shocked by those results, residents and officials say they were pleased to learn no city official could be found absconding with tax dollars during one of the city’s largest projects.

“It is no surprise and just proves that those who pushed for the audit had a political agenda and not the interests of the citizens in mind,” responded Island attorney and businessman Patrick Neale, after the audit results were posted Thursday afternoon on this reporter’s Facebook page.

City Manager Steve Thompson, City Councilman Jerry Gibson and Chairman Rob Popoff were among those who also said there were “no surprises” in auditors’ reports.

Many officials, including Councilman Bill Trotter, said that the audit was most worthwhile in putting concerns to rest and improving city policy further since Thompson and current Finance Director Patricia Bliss began implementing changes before the audit was complete.

The concerns over financial practices came to a head in the public release of a transition report from Souza to then-incoming City Manager Steve Thompson in October 2008.

Souza, the city’s long-time parks and recreation director and interim city manager for about six weeks, wrote to Thompson in May 2008 of the concerns he had regarding accounting practices

“I believe there are management and oversight issues in this department. 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; misleading City Council when asking for contract approvals,” Souza had written in the report.

“Dana’s concerns with a lack of policies and procedures especially as they relate to change orders and purchase orders were very accurate and are recommendations of the auditors,” said Terri DiSciullo, chair of the forensic audit committee.

Concerns raised by Marco Island Taxpayer Association board member Amadeo Petricca, who found errors of similar magnitude to the $1 million reported by auditors, were also very accurate, she added.

“I was pleased that there were no findings of fraud or financial gain, but I was disappointed at the total cost, errors in the accounting of the project such as miscoded invoices and invoices coded to the wrong tax period, missing paperwork, lack of policies and procedures in the accounting department, change orders and purchase upgrades, and lack of journal entry approval,” DiSciullo said.

She added that although the percentage of the total project in error, about 10 percent, wasn’t alarming, it was still a lot of money to be off by $1 million or more.

Even more alarming to many who spoke about the audit results was learning what the total cost of the project ended up to be.

About six members of the public stood and commented at Monday’s meeting, among them were MITA President Fay Biles, vice president Bill Duncan and board member Ken Honecker.

Biles said learning that the project cost $42 million was the greatest shocker. Popoff and DiSciullo agreed.

“I sank down in my seat a little bit,” Popoff said.

Honecker said the project grew during the implementation of the Island-wide Septic Tank Replacement Program, but also questioned how such large expenses could have been approved for the project, which began before the utility improvement expenses related to the STRP and water utility purchase were known.

Councilman Chuck Kiester asked Bernadette Britz-Parker of the firm James Moore, which performed the forensic audit for about $80,000, some difficult questions about whether city officials were involved in illegal activity. He also asked if Britz-Parker believed the actions of Harrison, former Marco City Manager Bill Moss, now Naples’ city manager, and Marco purchasing director Bob Creighton could be defined as “nonfeasance, misfeasance, malfeasance or fraud.”

“You’re making her feel uncomfortable,” Popoff said, interrupting the line of questioning.

Vice Chairman Frank Recker said he believed the January 2008 purchase order upgrade for $900,000 was an unlawful act.

“But we have made it okay, accidentally, by approving it afterward,” Recker said of council’s decision in January 2009 to approve the change order six months after the fact.

After Souza’s transition report went public, concerns about city staff possibly misleading council, among other suspected improprieties, led to public comments and allegations from Kiester and others about Harrison “cooking the books.”

Harrison retired soon after the allegations.

“I don’t find fault with Bill Moss or Bill Harrison. The only fault I can find is that they didn’t make their case stronger to council that they needed a dedicated account staff person. We’ve been so conservative as a city, I think they were afraid to come to council and say they couldn’t do it with the staff they had,” said Steve Stefanides, an Island resident who has served on several city and community boards, including the financial planning committee.

Harrison shared his side of the story in a letter to council Friday.

“One standard we never relaxed was our duty to safeguard the resources provided to the city by the taxpayers ... Nowhere in their report do they document one dollar of taxpayer funds wasted or misused,” Harrison said of the audit results.

Resident Sal Sciarrino, who also serves on city advisory boards, said he thought all the money and time on the audit was spent for nothing.

“Where’s the thief?” he asked rhetorically following the meeting.

City Attorney Alan Gabriel said any criminal activity would require knowing intent. Auditors said they could find no evidence of an intent to deceive.

Resident Frances Enman said Islanders finally got a taste of what they’ve been wanting all along, transparency.

“It is and will always be my opinion that Harrison was the master of the shell game when it came to shuffling funds,” Enman said.

To some extent, auditors verified this concern in their recommendation to cease the commingling of funds and begin creating separated accounts for large projects, among other recommendations. The full report is available in supporting documents to the left along with the full letter by former Finance Director Bill Harrison.