Lake County Fiscal Rangers

Florida County Activists Ask Lake County FiscalRangers for Help to Resolve Corruption

Activists and TeaParty members in other Florida Counties are aware of FiscalRangers.

We just got a query from one County activist group asking how they can stop corruption in their County.   They listed a number of officials and issues, so here is what I sent them, and I expect to talk to them later.

Vance Jochim

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 The Florida Grand Jury published a big report on Corruption in Florida last December and Pam Bondi has done nothing to market it to the legislature to get the recommendations implemented, even though her Attorney General Dept. runs the Grand Jury investigations.

The Florida Auditor General has no “resources” to initiate citizen requests for audits.   They mostly focus on CPA type financial and regulatory compliance audits, and not audits for efficiency, effectiveness or to detect and fix corruption.   Almost all local government oversight is left up to local County agencies and officials.

The legislative Audit Committee will not initiate citizen requests for audits, which are sent to the Auditor General, BUT they will do so if asked by a legislator.    So, you need to have a legislator request an audit like what you want, and the AG may do it .   But, the problem with the Auditor General is they only have CPA’s, not Certified Fraud Examiners or Certified Internal Auditors, thus really don’t have the skills I would want them to have.

There is no Florida "audit" or oversight agency authorized to initiate performance audits of either State or County level agencies and programs.   Florida State has over 1500 Special Districts and no department has authority to initiate audits of them (water districts, hospital districts, CRA's, etc.)

At the local level, see if the County Court Clerk for the County has an internal auditor, and whether they would initiate something.  Keep peppering them with details on your concerns, plus copies to the County Board members and County manager.  Determine if the School District has an auditor and review their reports for quality.

County governments have poor oversight on non-financial issues.   They can get awards for how pretty and accurate their annual financial reports (CAFR's) are, but there might not be any reports showing efficiency, effectiveness or oversight to prevent corruption.  In Lake County, the controller and "auditor" are in the Court Clerks office and neither has authority to go into the County government or other Constitutional offices and review internal operations to improve efficiency, etc.   In corporations over $200-million, they usually have one or more internal auditors with a full charter to review any records or interview any employees and initiate audits on their own.

Search the internet for public internal audit reports by local governments on the issue you are concerned with.   For instance, you might find just one Florida Auditor General performance audit on the specific function (like CRA's), and it will give you ideas of what system procedures should exist in your local departments to prevent fraud, waste & abuse.   it is my opinion that most local government officials and staff have no clue how to implement fraud detection and efficiency tracking systems like business has, so you have to find articles of screwups elsewhere to point out local improvements are needed.

Research the corruption in Boca Raton and Palm Beach County.   It was so bad the citizens led a referendum to create an independent Inspector General, who is now issuing some reports and has authority to initiate investigations in all the cities, school districts as well as County operations.

Try to initiate getting a petition to create a similar Inspector General for your County.

 

If the targets of your questions get federal funds, then you could find out which department they get funds from, and send complaints to the Inspector General for that Federal Department.

You might also create a blog like I did at FiscalRangers.com , and report this stuff in the blog with copies to all elected officials.  Then give public input at public meetings and they start listening to you.  I have been doing it for six years.  I also send copies to about 30 press members – in the County, in the nearby major TV market (Orlando) and also to key press people (print, tV and online blogs) in Tallahassee.   This has helped start stories, such as several articles all over Florida about our initiative to reform the North Lake County Hospital District and then get HB-1299 passed to reform it.   That bill was signed last Friday by Gov. Scott. 

If there are Florida government committees of appointed officials, send email copies of articles to them.  I did that with Gov. Scott’s Commission to review the Hospital Districts in Florida, and several of my suggestions made it into their recommendations (and into HB-1299).

Also, if you can get Tea party or other public groups to attend a key local government meeting like County Board meetings or the annual meeting of the County legislators forum, with signs, etc.  – it gets on the TV and also shows officials they can’t keep avoiding your issue.

Attend Tea Party and other groups and give presentations, with a list of actions for them, such as three questions to ask politicians running for office this year on local corruption examples and what they would do to fix it.   Video them, and post it on websites or YouTube, so you have it in case they do not follow through.

Elect smarter officials.  It is hard to get an official who is a high school graduate to spend time to understand governance issues, etc.   Many don't even read documents given to them by staff.   The more educated the official is, the less they might be open to corruption plus they are used to reading professional reports and would understand your issues better.  If they have a Master's degree and some type of professional certification or license, that is even better, because they have been exposed to ethics policies, etc.

The key is to keep bringing up your recommendations publicly – using public input, website, blog, emails, Facebook page, send to press, send to elected officials, get people to attend meeting with signs and give public input.   Once they know you are watching and asking questions, some officials might start backing  your efforts to improve transparency, accountability and oversight.

I even got the local County Board to hire outside auditors to review the local EMS rather than use an inexperienced auditor in the Court Clerk’s office. 

You can call me at anytime to discuss this.

 

Vance Jochim

Lake County Fiscal Rangers

Chief Fiscal Watchdog

Volunteers Searching for Ways to Improve Local Government Fiscal Management, Efficiency & Effectiveness

PO Box 1042

Tavares, FL 32778

Mobile:  352-638-3578

FiscalRangers@comcast.net

www.FiscalRangers.com   

TWITTER:  @FiscalRangers 

Fiscal Ranger's page on Facebook

CLICK HERE to see recommended internet links related to Local Lake County government fiscal issues.

 

 

National Website Monitors "State Integrity" and Ranks States - Florida is a C-

Tavares, FL - March 20, 2012

I found a new website that is run by a number pf public integrity types of organizations, and they rank all the States by several categories and rank their "Corruption Risk".

Here is Florida's page, which shows abysmal rankings in most categories, and an average C- in Corruption Risk .  Even with that ranking, they are 18th out of all the states, which shows how much worse other states are.

http://www.stateintegrity.org/florida  

I noticed that they ranked "Internal Audit" as one of the only "A" categories, so I posted this comment:

As a former corporate internal audit director, Certified Internal Auditor and anti-corruption adviser, I was amazed to see you give Florida an A for internal audit.  I write a blog on local Lake County, FL government agency fiscal fiascos and mis-management at www.FiscalRangers.com .  After five years of monitoring issues here, I do not believe there is ANY oversight on about 2000 local government agencies comparable to what I saw in Fortune 500 firms, the County of Los Angeles or even the Federal government.   They may do nice, clean "financial audits" but the Inspector General has no authority to initiate performance or internal audits of local agencies, including water districts, hospital districts, special tax districts, etc.  

There are no requirements for independent County auditors and the audits conducted by the Florida Inspector General are conducted by CPA's, not CIA's or CFE's to catch performance and efficiency problems.

For instance, we had a local Hospital tax district that existed for 40 years without ANY spending rules on how more than $10-million would be spent by two named non-profit hospitals.  They could spend it on pink flamingos for the lawn and be legal.   It took locals 4 years to finally get a Legislator who wrote a much improved bill governing them, and it was barely passed recently due to insider tricks by a Hospital supported State Senatory.

You might find one internal "operational audit" of a single Community Redevelopment Agency (CRA) by the Inspector General, but if lots of problems are found, they don't go out and review the other CRA's for similar problems.   Florida is still a Huckster State with little oversight.   The one benefit is a good sunshine law, so local people can do their own research to find stupid government practices.   My mantra is that government should be run as well as corporations, and Florida local government agencies lack professional oversight from the State or local internal auditors, and waste is rampant.  .

vj

Broward County, FL Inspector General Issues First Report and blasts County Economic & Small Biz Development

The new Broward County Inspector General just issued a report blasting the total mis-management of a County run small business certification program designed to give County contracts a local preference. Only local government could create a $750,000 fiscal fiasco like this (or State or Federal Government.).

I can't stop - there is a basic management rule cited by Ronald Reagan - "Trust but verify", but these county managers trusted, but didn't verify the vendors' true eligibility for local government contracts.

Best quotes:

“The OIG determined that at least $750,000 in public funds, and in all probability a lot more has been misspent as a result of gross mismanagement by the OESBD,’’ Scott said Friday. “Our office is going to work with county government to make sure this doesn’t happen.’’

In one instance, the Inspector General found that a county vendor, Everytrade International Company, was awarded 37 county contracts worth nearly $750,000 since June 2007. At least 35 of those contracts required the vendor to be certified as a Small Business Enterprise, which gives the designated company exclusive access to certain county contracts and preference in the procurement process.

But according to the Inspector General, Everytrade International is actually a brokerage with negligible business space, no inventory, no warehouse and no full-time employees other than its owner, Jose de la Riva Aguero.

And more:

The Inspector General’s report also singled out Norman Taylor, director of the county’s OESBD for improperly certifying brokers to participate in the SBE program.

“The OESB has failed to develop suitable guidelines addressing certification requirements for applicants; failed to ensure that those guidelines which were established were fairly and consistently applied to all vendors; and ignored evidence that brokers were exploiting their SBE certifications,’’ the report states. “In addition, the OESBD’s documentation and record keeping practices have been inadequate, further hampering enforcement and oversight of the SBE certification process.’’

Read the details here:

http://www.miamiherald.com/2011/12/16/2549235/broward-inspector-general-finds.html 

This kind of reminds me of the Lake County fiasco regarding house renovation grants when the "program manager" was left unsupervised and gave grants to relatives, out of county vendors, etc. 

The Broward County Administrator should also be held accountable for not making sure that proper management control processes were in place, and verified.  But the article doesn't mention any such sanctions. 

vj

 

 

 

Palm Beach County School Board Resists Coverage by new County Inspector General

Gee, why would a government agency board NOT WANT an outside, independent watchdog group to look at their internal operations?

But, Palm Beach County has a new Inspector General with authority over the County operations and local cities, but not the School District.

So, the School District is now creating their OWN Inspector General and PROMOTING their existing internal auditor into the position.

http://www.palmbeachpost.com/opinion/editorials/for-school-district-internal-inspector-general-weaker-than-2030290.html?cxtype=rss_editorials 

This editorial supports the idea of the County Inspector General having oversight of the School District, and we think it is a good idea.

What do you think?

vj

 

 

 

Broward County, FL Inspector General Office up and running...

In 2010, Broward County, FL Commissioners amended the County charter to create an Inspector General department, and in April, 2011, they hired an ex-US Justice Department manager to run it.   The IG department was setup after pressure from citizens due to excess government fraud and corruption.

They now have a website up and running and some background pages, but no reports yet.

The IG had independent authority over all County operations AND all cities in the County.

Lake County does NOT have an Inspector General, and the "County Clerk Auditor" in the County Clerk's department has no authority to open audits in other County or City operations.

Basically, there is no central auditor in Lake County with authority to audit or investigate County operations, Constitutional officers or cities.   And, you can't request an audit from the Florida Auditor General without approval by the separate Legislative Audit Committee (which rarely does give approval or funding)

So, this posting is a place marker to contain the website information on the Broward County Inspector General:

http://www.broward.org/InspectorGeneral/Pages/Default.aspx

vj

 

Here is a short SunSentinel.com article explaining the announcement of the new website...

http://weblogs.sun-sentinel.com/news/politics/broward/blog/2011/12/broward_inspector_general_offi.html 

County Attorney Overspends Impact Fee Funded Land Buys by $28-million

Jan. 28, 2011

I always read the Saturday papers in detail because they usually contain articles about government screwups, and the government agency releases the information late on Friday, hoping no one reads the Saturday paper or watches the Saturday TV news.

Oooops...I found a BIG government screwup...

But, fortunately, this $28-million attorney caused screw up was not in Lake County, but in Osceola County.  We have written or provided public input about the lack of business sense in Lake County attorney led contract writing issues in Lake County (and recently the Lake County School District construction contracts), but this one in Osceola takes the cake.  The Osceola County legal department cost their taxpayers about $28-million more than budgeted for road project land buys.

It seems Osceola County wanted to launch seven road projects using local property based impact fee taxes for a total of $200-million.

So the Osceola County Attorney's office somehow decided that all land purchases should be accomplished not by negotiations, but by suing the owners of 360 parcels of land they needed.   AND, the Assistant Attorney followed that plan without she or anyone keeping track of the running costs or comparing the final costs of all the lawsuits to the land purchase budget.   According to the Sentinel article below, staff at nearby Orange County say it is less costly to negotiate first, then go to mediation for needed land purchases, and finally, as a last resort, launch a lawsuit.

And, the former head of Osceola's Public Works Department said they wanted to negotiate first for the land purchases, budgeted at $19-million, but "the request was rejected", and the result was that the land cost over $41-million and 1/3 of the lawsuits are not settled yet.  No name was provided regarding WHO rejected the less costly process.

The Assistant County Attorney who handled the lawsuits, Sherry Hopkins,  is quoted by the Sentinel as saying "that staying within the land acquisition budget WASN'T HER RESPONSIBILITY".   Talk about a poor attorney, who isn't even smart enough to watch total costs of her litigation activities, and who was not smart enough to ask what the budget was.  Every County meeting usually discusses budget issues, so why didn't she even compare her projected lawsuit costs to a budget line item?

However, reading between the lines, the article did not say exactly WHO rejected the Public Works request to negotiate first for the land.  I am sure there are some documents that indicate that possibly the former County Manager, the County Attorney, or an elected official got involved and that is being covered up.  Or, possibly a law firm that benefitted from outsourcing of the lawsuits was involved.  So, Hopkins could have been ordered to only file lawsuits, but if so, who ordered it, and WHO benefitted from the decision and ignoring budget limits?   As they say in Police TV shows, they look for means, motive and opportunity, and investigators need to find what the motive was.

I looked at the Osceola County website to see if they have an internal audit function, and there are pages on the website but nothing on them, no names are listed, and the "Reports" page has nothing on it.  So, if they don't even have an auditor, it seems they have a really bad management problem at Osceola County, and they might need one (and some new Attorneys).

Osceola County needs a forensic audit and should call in the Attorney General or Auditor General for the State.  The amount of loss is too great not to have a professional, objective review of how the losses happened.

And, as an experienced auditor, here are some internal audit industry gobbledegook recommendations:

1) ANY government employee, even County Attorneys, need to always know what the projected (not just actual) cost of their activities are, and on a monthly and project to date basis, compare them to an authorized budget line item account using a "percentage of completion" method.  Thus, if their attorney settled the first 10% of the lawsuits and costs were 3 times that allowed by the budget for 10% of the land buys, they should have known then and stopped further work until either more budget was approved or reduced spending was approved.

2) In construction or other work, it is normal to use "work orders" and I am sure in government work, they include the relative line item from the budget.  It seems like the legal department did not follow such a process, or their written authorization for the lawsuits would have also specified the budget line item, total approved amount, which should have been used to compare to projected costs.  This would ensure that even poor attorneys couldn't say they didn't know what the maximum budget was.

Someone needs to be personally investigated and put in jail over this $28-million loss of taxpayer funds.

Be sure to forward this to your favorite elected official and government managers as a warning about their fiscal management responsibilities to the taxpayer.

vj

HERE is the Osceola story in the Saturday, Jan. 28, 2011 Orlando Sentinel

OrlandoSentinel.com

Osceola commissioners want to know how $30 million was overspent on buying land for road projects

County's aggressive land purchases for roads amass huge costs

By Jeannette Rivera-Lyles, Orlando Sentinel

10:21 PM EST, January 28, 2011

It was billed as Osceola's own stimulus package: Seven road projects launched simultaneously at a cost of $200 million that would inject needed cash and jobs into the economy.

Three years after the program was launched, the county's public works officials estimate that more than $28 million in impact-fee funds were overspent in the process to acquire land for the projects.

County Commissioners want to know how that happened and why they are just finding out.

"I can't imagine in my wildest dream that someone knows there's a [almost] $30 million overrun and kept it to themselves," Commissioner Frank Attkisson said. "That's money we could've used to continue to pay for building roads in Osceola County, and we can't do that now....I think that's almost criminal."

Commissioner John Quiñones said the overrun was "negligent and irresponsible."

Impact fees, paid by developers to the county to help build roads and other infrastructure to accommodate new growth, are often passed on to new homebuyers. The county had set aside $19.9 million for land purchases but now public works officials estimates it needs $48 million to complete it, an increase of 141 percent.

County Manager Don Fisher, at the county helm since April, said he's not sure yet exactly how much was overspent and who is responsible. Fisher is scheduled to report Monday to the commission. The manager, however, pointed out that the bottom line of the road projects won't be affected because the county saved enough in construction costs to make up for the overspending on land.

"That's the good news," Fisher said.

Quiñones said that doesn't excuse blowing the budget.

"How can $30 million that is now gone not have an impact?" he said. "Even if these projects are completed, we have a long list of failing roads and other transportation projects that have not been funded. We could've used that money for those."

Osceola has dozens of roads listed as failing by the state Department of Transportation. County officials in November attempted to pass a referendum that called for an increase of 7 percent to 8 percent on the local sales tax to raise money for roads. It was overwhelmingly rejected by voters.

Departments point fingers

The seven targeted road projects required the acquisition of 360 parcels. But the costs quickly surpassed the budgeted $19.9 million, in part because the county chose to sue property owners rather than negotiate sales prices. The county made land owners offers that were mostly less than market value and gave them 30 days to accept the terms. None of them did, so the County Attorney's Office sued to acquire the land by eminent domain — the taking of private property for public use.

The aggressive strategy resulted in additional costs and delays. Property owners ended up with more than what was originally offered, and the county became liable for the owners' legal fees and expenses such as land surveys and expert opinions. Under Florida law, if the final settlement on an eminent domain property is more than the original offer, the government becomes responsible for the other parties' fees.

When asked about the overspending, Assistant County Attorney Sherry Hopkins, who handled the land transactions, said that staying within the land acquisition budget wasn't her responsibility.

"Public works [department] controlled the budget," Hopkins said. "No one ever told me or my boss that we were spending too much money."

Hopkins added that she sued 100 percent of the property owners because those were her marching orders. Of the 360 parcels, one-third have still not been settled.

"The way Public Works directed this to happen was that they wanted us to acquire," Hopkins said. "They didn't want us to go through negotiation."

Not so, said Gregg Hostetler, the county's former public works deputy director, who now works in the private sector. His team, he said, asked the county attorney to let them handle the land acquisition — the standard procedure in Orange County and at most local governments — so that they could negotiate instead of suing. The request was rejected, he said.

Going to court is not the best way to acquire land for public projects, said Ron Ribaric, an Orange County Public Works Department assistant project manager.

"That's a very last resource," Ribaric said. "It's very expensive and time-consuming. It can bust your budget and delay your projects."

Ribaric said Orange County first attempts to buy properties at market value. If the owner doesn't agree on the price, it moves to mediation. If that doesn't succeed, the county sues, about 25 percent of the time.

Osceola Commissioner Michael Harford said he wants to change the process "so that we're not here ever again," he said.

Jeannette Rivera-Lyles can be reached at jrivera@orlandosentinel.com or 407-420-5471

Copyright © 2011, Orlando Sentinel

 

 

 

 

Lake County Auditor Issues Audit Report on County Employee Services Dept. 17 months after Initial Complaints Filed

So, 17 months after local government reformer Lee Johnson prepared a massive report on problems in the Lake County Employee Services Dept., the County Auditor finally issued a 43 page audit report with 62 Findings, and included the responses from the County officials.

You can find our initial August 18, 2008 posting about this issue and Lee Johnson's research HERE.

You can find our later Sept. 18, 2008 posting on Johnson's research WITH all his reports attached HERE.

The link to the recent audit report is further down in this report.

Basically, Johnson used public records requests and found all sorts of questionable work practices related to hiring, firing, promotions and demotions in County operations.  Based upon my experience as an internal audit manager in several large firms, a professional HR manager would never have condoned such practices.   However, some issues could also have been due to political interference, which we will never know.

During the lapsed time between Johnson's analysis and the issuance of the audit report:

- one employee filed a discrimination lawsuit and settled for $50,000

- the County Manager, Cindy Hall, who originally ignored Johnson's research and tried to bury it, has been fired.

- the County Manager in charge of the Employee Services Dept. "left" the County after Hall was fired.

- the Manager in charge of the employee who won the lawsuit was demoted.

- The County Auditor, Dennis Grey, left the County about 6 weeks ago, but he and his staff did a great job on this audit - they were delayed in completing the audit due to scheduling and slow cooperation from the County offices and because the County Clerk would not authorize quick action until a "request" was received from the County Manager.   

However, thanks to County Clerk Neal Kelly for moving the audit forward after Grey left the County, and issuing it today. 

Unfortunately, the County Clerk, who supervises the County Auditor, does not feel he has authority to initiate audits even with significant documentation, indicated by the following quote from the report's cover letter:

"The presenting resident at the August 19, 2008 BCC meeting later met with the Clerk of the Courts and presented the same information. The resident further stated that he and those working with him represented a group of persons which includes former and current county personnel. He requested the Clerk’s Internal Audit Department perform an internal audit of the County’s Employee Services Office. The Clerk explained that the Clerk’s office had an ongoing good relationship with the County Manager and the Board of County Commissioners and that if they determined that an internal audit was needed, they would be the ones who would initiate Internal Audit services. The Clerk further stated that his office would present the topic for potential inclusion in the next fiscal year’s annual audit plan."

The above statement indicates a significant weakness in the oversight of Lake County operations.  An auditor should have a "Charter" that gives him complete authority to initiate audits of significant issues without having to 1) ask for permission of the auditee and 2) not have to wait to schedule it in a future "audit plan".  In my 18 years experience as an Internal Audit Manager, we never delayed reviews of any significant, documented operational issues like this, and it was not uncommon to fly out to a location within a week to investigate much smaller issues than the ones discussed in this report.   Perhaps this is evidence that Lake County needs a separate Inspector General like other Florida Counties have recently implemented.

And, the Court Clerk will not publish audit reports on their website.  Thus if Lee Johnson and I were not monitoring this, the public would probably never know of the audit report, because the local newspapers do not monitor them.  And if Lee Johnson had not made public presentations on the issue at the Board meetings, the audit might never have taken place.

Here is the County Audit Report - I will add my comments below by Thursday, Feb 4 after I read it.  

Unlike many professional internal audit reports I have seen, there is no executive summary listing the major findings, so you have to read all 60+ findings to identify which are the important issues and the relevance of the responses.

Here is the attached audit report:

Download ES QIP Internal Audit Final Report with Management Response FINAL

My comments - being revised in real time, so until I change this line to say "final", it will be subject to change :

My Overall Summary of Issues and the Report

I will create this section last after my review.

Draft Issues so far:

Here are some key quotes buried in the audit report:

- "the current director may lack formalized, human resources educational requirements as stated in the job description under which the director was hired..."   (This could explain some of the findings)  (pg 10)

- "As previously found in other internal audits, other Board departments place little emphasis on identifying or measuring key performance measures. ES is no different. ES is aware of their central job duties and the function of ES within the county structure. However, most information is collected informally, retained informally by managers, and problems are identified as they arise or are discovered in performing managerial oversight of their areas of responsibility. Little time is spent in looking at trends or capturing key data. ES appears to be more reactive than proactive in their approach to managerial leadership and problem identification and solving."    (Note:  I found this after writing some similar observations of my own.)  (pg 10)

- "ES, though responsible for leading the charge in quality improvement, lacks direction in looking at continuous improvement within ES functions."  (pg 10)

More to be posted here tomorrow, Thursday.

vj

Florida Legislators from Broward County to Create County Inspector General

Another Florida County is considering establishment of a County Inspector General.  This is the first time I have read where it seems the County State Legislators are moving to set it up.   We posted earlier about one in Palm Beach County, but that was initiated by local voters (and probably made into law by the County legislators).

Inspector Generals are usually setup to investigate reports of wrong doing, and may or may not also act as operational auditors to evaluate efficiency, effectiveness or economy of operations.  All Florida government agencies DO get financial audits, but that really is the routine CPA type of audit to ensure the annual financial report is correct and accurate.   Such audits do not evaluate efficiencies or cost controls like many corporations do.

As we have mentioned before, the oversight here in Lake County is fragmented and restricted because