Here’s The Scoop…The Town Audit Report…2008-2009-2010…Do We Really Have A Contract?…
May 10, 2009 by Barbara
HOW WAS THE AUDIT FIRM ENGAGED?….
Dear Readers….recently we have been hearing a lot grumbling and flashes of anger after this writer found that the Town Manager does have a clause in her 2007 contract to have an annual review….A parade was orchestrated by the Vice Mayor and CIC to throw upon the Manager accolades of her ability and how financially sound we are….The Manager herself was incensed over any such review being done and threw down the gauntlet that such a requirement was tantamount to wanting to remove her …saying that Commissioner Dodd should just get it over with…she has a life….
Nevertheless it is again on the May 12,2009 agenda under Old Business because the contract that the Manager alone put into place in 2007 does not say “IF” the Commission and/or the Manager wants to have a review, it says “at least” an annual review will be done before the annual budget…
There have been some disturbing actions by this Town Manager over the past year…all previously posted over the year+…covering acts such as the RFPs for the Town Attorney and Special Magistrate… the major Beach Pavilion changes that were never brought back to the Commission ….her hiring practices of not putting employment ads in the proper venue to assure top quality administrators with the qualifications desired would respond…RFPs for various contracts being done without following procedure…..including the one for the Audit Firm that has been the longtime firm employed by the Town…
We all sat as the Town won yet another award and we were given a litany of comparisons to other towns…as a testament to our Town Manager …who was previously our longtime Finance Director…culminating over the last weeks with assertions we as a town are “in the black”…
After the audit, and the award presented for nth year……this writer was curious…never being a “numbers person”, I became intrigued by the accounting terminology that was included in the audit report…(previous posts…scoops LBTS agenda/meetings cats.)…It struck my funny bone that the standard “speak” of accountability of the Auditors is to write statements to the effect that they will have an opinion..of not having an opinion…( tongue- in- cheek) …They count on the “reasonable assurances” from the town that materials provided to them (internal controls) are accurate with no misrepresentations… in more standardized “account-ize”…..
I made a public records request for the audit and the engagement letter…provided by Rachlin LLP…and received it from the Town…Included was an 8 page engagement letter written to the Town Manager and the Commission dated July 15,2008…that stated the following..
‘As a part of our continuing contract, we are pleased to confirm our understanding of the services we are to provide the Town of Lauderdale-By-The-Sea, Florida (Town) for the fiscal years ended September 30, 2008,2009 and 2010.’…..going on to explain their audit…On page 5 of the letter the estimated fees are included…(2008,2009 and 2010 respectively)…$45,500,$50,000 and $55,000…Two additional audit fees would also take place if certain additional audits were required by the Town (2008,2009 and 2010 respectively 2x)…$8,000,$8,500 and $9,000 (2x)…..
Well the first thing that struck me was that it was a multi-year contract (although it can be terminated at any time)…Why it struck me was that Comm. Dodd had spoken about wanting RFPs for all major contracts annually and I thought maybe he had forgotten this was a multi- year contract he voted for on July 22, 2008 …(After all he was in the midst of being CIC “tar and feathered” at the time)…
I made an inquiry to Comm. Dodd and asked if he had forgotten this…He replied he had no such recollection that it was a multi-year contract….
I proceeded to look at the minutes for July 22, 2008…Item 6 B. Town Manager Report…which said Manager Colon wanted to INFORM the Commissioners that an engagement with the auditors was being renewed.
The Video online showed this…
Manager Colon-” The engagement due for renewal They sent it and I sent, I put it on the agenda to LET YOU KNOW WE WILL BE RENEWING our engagement with the auditors and I JUST WANTED TO INFORM YOU BEFORE I SIGNED IT.’…The end…
There was no vote and no reference to any specifics…
I found that rather odd…due to the amount of money that was being awarded for this contract each year ( $45,000-$61,000 in 2008 to $55,000- $73,000 in 2010) and the total over the three of approx. $200,000…going forth without a vote of the Commission……It was especially surprising when according to my recently receiving by public records request the “Authority and Purpose Of Purchasing Manual” (requested after Assist. Town Manager Olinzock spoke of it when explaining the Town’s RFP process for the 2009 Fireworks Display…previously posted)…It states on page 13 under General Purchasing Policies…B. Purchasing Approval Policy 1. “All procurements of goods and/or services as well as award of contracts and related change orders, in excess of fifteen thousand dollars ($15,000) must be approved by the Town Commission before such purchase is made or contract is awarded. Unless waived by the Town Commission, the vendors for procurement above fifteen thousand dollars ($15,000) shall be selected through the Formal Bidding Process described in section III. C. and III. D. below.Once the contract has been approved by the Town Commission, the Town Manager may exercise any extension or renewal options in that contract.
Commissioner Dodd looked through his backup materials and found that he had never received and had never seen the July 15,2008 engagement letter addressed to the Town Manager and the Commission…In his backup was the July 1,2005 engagement letter sent to former Town Manager Robert Baldwin, containing the services and fees for years 2005,2006 and 2007….which were $34,250,$37,700 and $41,400 respectively…
I was most disturbed by hearing this and decided to put in a public records request for the backup material for the July 22,2008 Commission meeting item 6 B.
I received back exactly what Commissioner Dodd said he received the 2005 engagement letter sent to former Town Manager Robert Baldwin and nothing else!…
More disturbing news came from the response to the engagement letter sent to Rachlin LLP on July 28,2008 which stated the following…
‘July 28,2008
Rachlin LLP
One Southwest Third Avenue
Miami Fl 33131
Attn. G. Jerry Chiocca, CPA
RE; Engagement Letter
Dear Mr. Chiocca:
Your engagement letter dated July 15,2008 WAS ACCEPTED at the July 22,2008 Town Commission meeting.
Attached is the fully executed engagement letter, renewing the contract between the Town of Lauderdale-By- The _Sea and Rachlin LLP for the fiscal years ending September 30, 2008.2009 and 2010.
Please sign where indicated and return one fully executed agreement to my attention.
Thank you,
June White
Town Clerk
c: Esther Colon, Town Manager
Kaola King, Director of Finance and Budget’
On the last page of the July 28,2008 engagement letter is the following:
‘Response:
This letter correctly sets forth the understanding of the Town of Lauderdale-By-The-Sea, Florida
By: Ester Colon (signature)
Title: Town Manager (written)
Date: 7/24/08 (written)
BC- The 7/28/08 letter says this contract was “accepted at the July 22,2008 Town Commission meeting”…but the minutes and video say otherwise…
The minutes for July 22, 2008…Item 6 B. Town Manager Report…which states… Manager Colon wanted to INFORM the Commissioners that an engagement with the auditors was being renewed.
The Video online for July 22,2008…Item 6 B. Manager Colon-” The engagement due for renewal They sent it and I sent, I put it on the agenda to LET YOU KNOW WE WILL BE RENEWING our engagement with the auditors and I JUST WANTED TO INFORM YOU BEFORE I SIGNED IT.’…
This leaves a whole host of questions that need answering…
1- Why was there no RFP bidding process for such a large contract as stated in the Town’s purchasing policy?
2- Why were the Commission not provided the correct backup with the correct prices for the services when it was sent before the date of the meeting?
3- Why was the Commission told by the Town Manager that she was “letting you know we will be renewing our engagement” and that she “just wanted to inform you before I signed it”?……
4- Why did the Town Clerk send a letter back saying “it was accepted”, when there was no vote taken, and the Commission never saw the July 15,2008 letter?
5- Is the contract with Rachlin valid without the Commission being in receipt of their July 15, 2008 letter and a taking a vote to accept?
This is why a review of the Town Manager should be required.
more to come….
