Reeling from scandals and wasted money, the Riviera Beach City Council this week voted to seek a forensic audit of multiple city departments, going back multiple years, to uncover losses and guard against future mismanagement of the impoverished city’s resources.
The council, in a unanimous vote on Wednesday, directed City Manager Karen Hoskins to advise on specifications for the audit, a financial investigation, including which departments should come under review and how far back in time a selected firm should look. She’s due to report back to the council Aug. 1 and the city would issue a formal request for proposals in the weeks to follow.
Hoskins estimated the audit could cost $200,000 or more.
“Even if it’s $500,000, I think it would be worth spending,” Councilwoman KaShamba Miller-Anderson said. It is essential the city undertake the work, especially in light of the revelation last week that Riviera Beach overspent $1.1 million between 2014 and 2017 for health insurance for ineligible former employees, she said. That revelation, brought to the public’s attention by a community activist who obtained internal documents, indicated that similar mismanagement could plague many departments.
Miller-Anderson recommended the auditors go back five to 10 years and look at disbursements, deposits, payroll, internal controls, employee benefits, contracts, and the hiring of employees, “making sure everyone is qualified for the positions they’re in.”
The unanimous decision came three weeks after activist Amon Yisrael pressed the council on the matter. A Palm Beach Post investigation Sunday detailed the city’s failure to remove ex-employees, ineligible retirees and even a dead person from its health plan.
It was a problem former City Manager Jonathan Evans alerted the council to last Sept. 20 but he was fired that night and the city took little action for months.
Risk Management Director Marie Sullin, whose department was responsible for removing former employees from the health plan, told the council in a special meeting Tuesday that staff is still trying to round up documentation so that Aetna, the insurer, will reimburse the city for some of the payments. To date, $240,000 has been recovered, she said.
Sullin said overbillings began soaring at a time in 2014 when the Human Resources and Risk Management were severely understaffed. The Human Resources director retired Oct. 31, 2014, and responsibilities for human resources, risk management, liability claims management and other functions fell on her, with a division that was short three people. The city’s insurance technician retired in April 2016, she added.
The short-staffing explanation is one Miller-Anderson has said she doubted, since notifying an insurance company an employee is gone only takes an email. She and Councilwoman Julie Botel called for an independent review.
It wasn’t until 2017, when the Finance Department was preparing the city’s insurance contract for a council vote on the policy renewal, that staff realized the scope of the problem and told the city manager.
At the Sept. 20 council meeting, Evans, who’d been on the job six months, presented a deal he’d negotiated with Aetna, to hold the city’s rate increase to 3 percent, half the 6 percent Aetna initially proposed. The city would pay $5.9 million, rather than $7 million for the 2017-18 fiscal year.
But Evans, in a note on the council agenda, cautioned that despite those savings, future rates could rise significantly because they were based on the number of employees and covered family members, and Aetna’s list of Riviera employees was much longer than the city’s count, his agenda stated. Aetna was billing for at least 77 too many employees and 119 of their family members, the Finance Department found.
Evans recommended the council schedule a work session to discuss the problem. But he never got to set up that session. In a surprise move that night, council members Terence Davis, Lynne Hubbard and Dawn Pardo voted to fire him, without explanation.
The insurance issue disappeared from public view.
The call for a broader review, of multiple departments, stemmed from the fact the insurance debacle was just one of several scandals that have wracked the city over the past year.
Among the others:
- A youth summer employment camp so disorganized — and described at a meeting Tuesday as so subject to meddling by Councilwoman Hubbard, who took a role in hiring for it — that it was in session four days before its director knew it.
- Big raises the temporary city manager awarded herself and two other staffers without council approval, including an assistant human resources director who took over for her departed boss and saw her salary go from $65,155 to $133,673 overnight.
- A chief building official hit with a state charge she falsely held herself out to be licensed as a building official.
- A low-income housing complex allowed to fall into such hideous condition that the city’s chief building official — who continues on active duty — hesitated to send inspectors in this week, out of fear for their health.
- Two high-level officials pushed out over sexual misconduct allegations.
- The loss of a second case in the U.S. Supreme Court — to the same resident, Fane Lozman — related to his 2006 arrest for speaking out at a council meeting.
- The mayor’s car being repossessed during a council meeting.
- A broad pattern of overspending on credit cards, cars, hotels and a stipend by a number of council members.
- And the three council members’ vote to fire the city manager, prompting thousands of residents to sign petitions calling for a vote to recall them.
In addition to the planned forensic audit, Palm Beach County Inspector General John Carey said this week he has been in touch with the city over its insurance overpayments. He said the city will share the results of the internal review its Finance and Risk Management staffs have done on the issue, so he can decide what work his staff might add to address the matter or recommend policy changes to prevent a recurrence.
The Office of Inspector General already is undertaking a review of council credit card spending, prompted by disclosures in The Palm Beach Post last fall.
Meanwhile, Finance Director Randy Sherman revealed at Tuesday night’s meeting that some materials the city sent to the Inspector General were forwarded to another investigative agency. Neither he nor Carey would say what the topic of that investigation might be, or even who, or whether the State Attorney’s Office or some other agency, is conducting it.
Mayor Thomas Masters said at Wednesday’s council meeting that he didn’t accept statements by some members of the public that, since the insurance overpayments have stopped, the city should just move on. Whomever is found to be at fault needs to be held accountable, he said, noting that, under the city charter, two people — the city manager and the mayor — have the power to make that happen.
“Heads need to roll, butts need to be kicked, and I’m prepared to do that if the administration doesn’t act accordingly,” Masters said.