Broward Office of the Inspector General 2015-2016 Annual Report
A message from the Inspector General In October of 2016 I had the privilege of appearing before the Ethics Subcommittee of the Broward Charter Review Commission, which is empowered to consider issues facing Broward County in the coming decade and make recommendations for charter change, which will be voted on by the electorate. Since the Broward Office of the Inspector General is a product of the charter review process, we are particularly aware of the importance of the Commission s work. I was given the opportunity to describe the OIG s mission and function, and to identify and discuss some areas of potential improvement. My recent interaction with the Charter Review Commission prompted me to look back upon the five years that our office has been in existence. During that time, our investigations have identified more than $23 million in questionable expenditures. Moreover, our findings have resulted in hundreds of thousands of dollars in realized savings by various Broward governments. In addition, we have referred over 40 of our findings for enforcement including criminal prosecution, findings of misconduct, thousands of dollars in fines, and remedial action to other agencies such as the Broward State Attorney s Office, the Miami-Dade State Attorney s Office, the Florida Elections Commission, the Florida Commission on Ethics, the Florida Department of Business and Professional Regulation, as well as Broward county and municipal governments. John W. Scott Inspector General In this reporting period alone, the OIG found that City of Hollywood officials illegally spent almost $1 million; that Town of Davie employees spent over $160,000 in violation of procurement policies; that gross mismanagement by the City of Margate resulted in a loss of over $290,000; and that six elected municipal officials mishandled campaign funds. And yet I am mindful of the old adage that past performance does not guarantee future results. That said, I ll sign off now as we renew our efforts during the coming year. Sincerely,
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Table of Contents Mission Statement... 3 Authority and Responsibilities... 5 Budget... 5 The OIG Team... 6 Professional Development... 7 Accredited Agency... 8 Complaints, Tips and Information... 8 Programs...10 Investigations and Audit...10 Contract and Procurement Oversight... 16 Ethics...18 Intergovernmental Cooperation and Outreach... 21 1
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Broward OIG Mission Statement The mission of the Broward Office of the Inspector General (OIG) is to act as an independent watchdog for the residents of Broward County. We promote integrity and accountability by investigating allegations of misconduct including fraud, corruption, and abuse and gross mismanagement, by officials and employees of the charter government of broward county, its thirty-one municipalities, and all entities and persons who provide goods and services to the county and the municipalities. The OIG publicly reports its findings to keep residents informed. Whenever appropriate, the OIG seeks criminal prosecution, civil recoveries, administrative and monetary sanctions, and ethics sanctions of those responsible for fraud, waste and abuse in government. 3
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Authority And Responsibilities The OIG s purpose, authority and responsibilities are codified in Section 12.01 of the Charter of Broward County. The Charter authorizes the OIG to investigate misconduct including fraud, corruption, abuse, and ethics violations and gross mismanagement. The OIG functions as an independent watchdog on behalf of more than 1.8 million residents of Broward County. The OIG s authority extends over: all elected and appointed county officials and employees; all elected and appointed officials and employees of the 31 municipalities located in the county; and all entities and persons who provide goods and services to the county and the municipalities. This responsibility encompasses county and municipal budgets totaling approximately $8.2 billion, more than 26,000 employees, and over 450 separate divisions and departments of government. In addition, the OIG has oversight responsibility for more than 170 elected officials including county commissioners, mayors, vice mayors, city commissioners, and town council members, as well as more than 36,000 registered vendors who provide goods or services to the county and municipalities. 5 The Inspector General (IG) has the authority to investigate violations of state and federal statutes and codes, county and municipal ordinances and codes, and conduct involving fraud, corruption and abuse. In connection with an investigation, the IG has the power to subpoena witnesses, administer oaths, and require the production of documents and records. As part of an investigation, the IG may audit any program, contract, or the operations of any division, department, or office of the county or municipalities, as well as the operations or performance of any provider as it relates to its contract with the county or municipality. The OIG is also charged with the responsibility to enforce the Code of Ethics for Elected Officials, which was made applicable to all Broward elected officials in January 2012. Budget Although the OIG s budget is funded through the county general fund, the Charter requires that the OIG remain an independent organization to assure that no interference or external influence affects the objectivity of the office. Each year the Inspector General, pursuant to the Charter, submits a proposed budget to the County Commission in accordance with the county s regular budget process. The proposed budget includes a reasonable estimate of operating and capital expenses, which includes funds required to retain hearing officers. The funds must be approved by the County Commission. In addition, the County Administrator and the Office of Management and Budget
provide resources and support throughout the budget process. after being selected as the first Broward Inspector General in 2011. Mr. Scott spent most of his career with the United States Department of Justice, where he investigated and prosecuted public corruption and fraud cases across the nation. Those cases included allegations of misconduct by federal, state and local officials including members of Congress, governors, judges, city council members, state legislators, members of the military, and law enforcement officials, as well as vendors, lobbyists and representatives of the banking, securities and finance industries. The OIG is committed to operating in a fiscally responsible manner. The approved budget for fiscal year (FY) 2015 was $2,434,390, with actual expenditures of $2,171,233. The approved budget for FY 2016 was $2,682,740 with an estimated actual expenditure of $2,259,242. 1 The OIG s FY 2016 budget represented 0.06% of the county s total budget. For FY 2016 the OIG was budgeted for 20 positions. The adopted budget for FY 2017, which commenced on October 1, 2016, is $2,829,420 which includes funds for a comprehensive investigative management system software solution. The budgeted positions for the OIG remain at 20. The OIG Team The OIG is led by Inspector General John W. Scott, who is serving his second term 1 The OIG has provided an estimate of actual expenditures because the Broward County Office of Management and Budget had not finalized actual expenditures for FY 2016 as of the preparation of this report. 6 The Inspector General leads the organization aided by a management team that includes a Deputy Inspector General, Assistant Inspector General and General Counsel. The OIG team is comprised of a diverse group of highly qualified individuals who bring to the organization a variety of specialties and skill sets. The team consists of an Ethics Counsel, Assistant Legal Counsel, Audit Manager, Supervisory Special Agent, Special Agents, Contract Oversight Specialists, Senior Auditor, Office Manager and an Investigative Support Specialist. The professional qualifications of our team include certified public accountants; attorneys including former federal and state prosecutors; former federal, state, local, and military law enforcement officers; former state regulatory investigators; procurement specialists; and administrative specialists. Our team holds certifications as fraud examiners, inspector general investigators, public accountants, public procurement
officers and criminal justice information system operators. Professional Development The Inspector General recruits the highest quality professionals within their respective fields. As an accredited agency we are committed to maintaining the highest level of professionalism by investing in our most valuable assets, our staff. To date OIG staff members have received over 2800 hours of continuing professional education, 564 of which have occurred during this fiscal year. The OIG provides in-house training to all new staff members on topics including the mission, function, and authority of the OIG; the Charter, the Broward County Code of Ordinances, and municipal codes; county and municipal government organization and function; ethics codes and the Sunshine laws; the accreditation process; the OIG Manual of Directives; and proper investigative techniques and protocols. Staff members have also completed ethics training that is provided to elected officials by our Ethics Counsel. including contract administration, request for proposals and specifications writing, public records requests, construction law in Florida, basics of correlation, regression and hypothesis testing for six sigma, web publishing and cyber security awareness. Throughout the year, staff members have participated in training and conferences provided by various government entities and associations including: Sunshine Law, Public Records and Ethics; Florida Accreditation Conference; Criminal Justice Training Symposium; Practical Techniques for Interviewing; Stress Management in Law Enforcement; Financial Crimes and Fraud Investigations; Social Media Investigations; In addition to new staff member training, the OIG provides resources for continuing education to further develop, cross-train, and add new skills to our staff of professionals. Staff members have participated in training provided by the county including new employee training, employment issues refresher, Microsoft Office applications, contract central overview, procurement system, purchase card program, purchasing processes 7 9th Annual Ethics Seminar; Advanced Interviewing Skills; and Criminal Justice Officer Ethics. OIG staff members are affiliated with the Association of Inspectors General (AIG), a national organization comprised of state, local and federal inspectors general and their staffs. The AIG s goals include
encouraging professional development, sponsoring educational programs and standardizing practices, policies and procedures. The AIG awards certification status to individuals who meet the eligibility requirements regarding education and experience, and successfully complete the respective certification program. Three members of the OIG s team have been awarded the designation of Certified Inspector General. All OIG Special Agents have received the designation of Certified Inspector General Investigator after undergoing training and testing by the AIG. Accredited Agency In October 2014, the OIG was accredited by the Commission for Florida Law Enforcement Accreditation (CFA). The CFA reviews and accredits law enforcement agencies and OIGs that meet or exceed the principals and standards established for offices of inspectors general. By attaining accreditation status, the OIG has demonstrated that it is committed to maintaining high standards of professionalism, which has resulted in enhanced quality of investigations, accountability and transparency. To ensure consistent and continued compliance with these standards, the CFA reviews agencies every three years for reaccreditation. The OIG will be reviewed for its first reaccreditation in fiscal year 2017. The OIG maintains regular communications with inspectors general throughout the state, attends accreditation conferences and provides feedback to the 8 CFA to help maintain the highest level of accountability and professionalism for the inspector general community. Complaints, Tips And Information Investigations are initiated based on complaints, tips and other information that is thoroughly evaluated. The Inspector General has the authority to commence an investigation based on the existence of good cause to believe that any official, employee, or provider has engaged in misconduct or gross mismanagement. The Inspector General may find good cause based upon his own initiative or on a signed sworn complaint. Tips and Information All county and municipal employees and residents are encouraged to assist the OIG in combating fraud, waste, misconduct and gross mismanagement by providing tips and information. There are a number of ways to provide information to the OIG. We accept tips and information through our Hotline at (954) 357-TIPS (8477), email at InspectorGeneral@broward.org, fax at (954) 357-7857, mail, or in person. Information may be provided without disclosing a name or contact information, although the OIG encourages persons to identify themselves should additional information be needed during the investigative process.
To date the OIG has received 1,058 tips, 215 of which were received during this reporting period. Once a tip is received it is reviewed to determine the appropriate action and assignment. Complaints The Inspector General may find good cause based on a signed, verified complaint. The Charter requires a complaint to be signed, under a penalty of perjury, with a statement that the complainant has personal knowledge of the facts. Persons who wish to file a complaint with the OIG may obtain a complaint form from the OIG website or by contacting the OIG at (954) 357-7873. The complaint must be completed, signed and delivered to the Broward Office of the Inspector General, One North University Drive, Suite 111, Plantation, Florida, 33324. To date, the OIG has received 119 signed complaints, including 16 received during this reporting period. Since May 2011, 132 tips have resulted in the initiation of investigative matters and 280 tips have been referred to other governmental agencies. Of all tips received, in the past year 37 have resulted in investigative matters or are currently pending a final determination by the OIG. Our review of those 16 complaints has led to the establishment of good cause to open three investigations. The OIG has referred four complaints this year to other government agencies for their appropriate action. 9
Programs The OIG is structured to support its primary mission of investigating gross mismanagement and misconduct, as well as enforcement of the Broward Code of Ethics for Elected Officials. The OIG structure includes Investigations, Contract Oversight, Ethics, and Audit, all of which work together to fulfill the broad and varied jurisdiction of the Inspector General. Audit is the newest addition to our structure and continues to grow through supporting the investigative function and through the performance of self-initiated reviews of municipal records. As a result of the combined efforts of the various OIG programs more than $23 million in questionable expenditures have been identified to date, with $1.65 million being identified this fiscal year. The programs are discussed in more detail below. INVESTIGATIONS AND AUDIT The Deputy Inspector General is responsible for overseeing all investigative functions of the OIG. Special Agents within the Investigations unit are tasked with investigating credible allegations of misconduct and gross mismanagement by Broward and municipal elected officials, employees and providers. Misconduct is defined as any violation of the state or federal constitution, any state or federal statute or code, any county or municipal ordinance or code; or conduct involving fraud, corruption, or abuse. Gross mismanagement is defined as the material waste or significant mismanagement of public resources. Special Agents also investigate alleged violations of the Broward Code of Ethics for Elected Officials, the Florida Code of Ethics for Public Officials and Employees, and municipal ethic codes. They also assist on procurement oversight and audit related matters. Special Agents are responsible for reviewing and corroborating information from hundreds of tips and complaints. They must also: conduct thorough, well documented investigations; perform extensive background checks; and carry out detailed ethics compliance reviews The Audit unit s primary responsibility is to provide accounting and analytical expertise to investigations. Auditors analyze complex databases and identify patterns of questionable financial practices. Auditors also pro-actively conduct audit reviews based on identified internal control weaknesses and anomalies found during the data analytics process, as well as problems identified during routine sampling of government records. Results of audit reviews may establish good cause to conduct full investigations 10
that are concurrently worked by Special Agents and Auditors. Although OIG investigations vary in size and complexity, most require interviews of witnesses and implicated parties, review of numerous documents, analysis of financial records, and preparation of detailed reports summarizing investigative findings. The OIG issues reports at the conclusion of investigations involving allegations of gross mismanagement. We also issue reports involving allegations of misconduct when we determine that such a report will assist the county or any municipality in preventing similar future misconduct. When the issuance of a report is not warranted, the OIG may issue a memorandum notifying officials of the closure of the investigation and detailing its work. investigation also revealed that Lawn Wizard obtained payment for services it never actually provided and obtained payment for services it did not complete as required. The OIG also identified gross mismanagement on the part of Broward County s Facilities Management Division for failing to timely address issues with Lawn Wizard. Even when building managers documented subpar service, the FMD failed to submit proper documentation to the Purchasing Division or the County Attorney s Office that would have brought a halt to Lawn Wizard s dealings with the county in a timely manner. Because of its failure to hold Lawn Wizard accountable for substandard service, the county was forced to waste resources and public money to ameliorate Lawn Wizard s continued deficient performance. Following are summaries of significant investigative findings made by the OIG during this reporting period. Misconduct by a Vendor and Gross Mismanagement by the Broward County Facilities Management Division The OIG found that a Broward County vendor, Lawn Wizard, willfully and blatantly violated the terms and conditions of its contract with the county. Lawn Wizard failed to provide services at the frequency and quality required by the contract, allowing the landscaping at dozens of buildings throughout the county to become overgrown. The OIG 11 In total, the OIG investigation revealed at least $41,859 in questionable expenditures, which included approximately $16,962 in questionable billings and approximately $24,897 in salary and overtime to the employee tasked with exclusively monitoring Lawn Wizard prior to its eventual debarment. The county accepted all of the OIG s recommendations in this matter and has taken steps to address the opportunities for improvement highlighted in the report.
Gross Mismanagement by the City of Margate in its Arrangement with the Alzheimer s Family Center, Inc. Evidence revealed that former Margate city officials engaged in gross mismanagement in its longstanding arrangement with the Alzheimer s Family Center (AFC). The city s gross mismanagement resulted in a $466,935 loss to the city, which was reduced to approximately $290,640 after entering into a settlement agreement with the AFC in September 2015. For nearly 20 years, the city maintained an informal agreement to provide bookkeeping services for the AFC and to pay the AFC s debts from city funds, later to be reimbursed as the AFC obtained funding. As this arrangement left the city vulnerable to significant financial losses without the implementation of any controls, the city decided in 2007, to implement a single control a $75,000 debt ceiling which was memorialized by resolution. Notwithstanding, the finance director, Gail Gargano who had regular access to information documenting the AFC s debt failed to inform any party that the single financial control contained in the memorialized arrangement, the $75,000 debt ceiling, was regularly violated. In fact, by the time the city commission was advised that the AFC had exceeded the $75,000 debt ceiling, the debt had climbed to over $380,000. The AFC ultimately accumulated $466,935 in debt to the city before the contract was terminated in March 2015. 12 While the OIG made no specific recommendations for the city, it did, more generally, recommend that local governments reconsider the advisability of any agreements or arrangements of the nature detailed in the report. Although the public policy of supporting families struggling with disease is noble, there are more fiscally responsible means of achieving that end. For example, grants of specified amounts allow local governments to control the amount of their investment and specify allowable uses. In the alternative, any agreement utilizing public funds should incorporate oversight and accountability controls that will limit an entity s vulnerability to financial losses. Misconduct and Gross Mismanagement in the Use and Administration of Procurement Cards in the Town of Davie An audit review of public records relating to the use of municipal procurement cards (p-cards) led the OIG to a full-scale investigation of the Town of Davie. Between October 2012 and July 2014, employees in the town engaged in misconduct and gross mismanagement in their use of p-cards by ignoring policies and procedures and failing to engage in the reasonable oversight of the p-card program that would be expected from a governmental entity. Despite the small size of our review sample, relative to the town s total p-card expenditures, we identified $160,630.72 spent in violation of procurement policies, a startlingly high ratio of vulnerability we would not expect to see in a local government with
proper policies and controls. Including duplicate payments and other observations, we identified a total of $171,540.23 in questionable expenditures. taken to date, we have requested that the Town provide a status report in December 2016 regarding additional corrective actions in response to this matter. The OIG found that purchasing staff failed to detect obvious and prolific splitting of transactions to avoid procurement controls. The report detailed instance after instance wherein employees deliberately split up purchases to avoid limits on their p-cards. We also found that purchasing and finance staff failed to develop necessary controls to ensure proper authorized approvals. In multiple instances, the town paid more than it would have if proper procurement controls had been observed. Regrettably, at many times during the investigation, the OIG was provided with misleading information and documentation. The submission of the false documents and explanations led to additional and unnecessary time to complete the investigation and damaged the credibility of certain individuals. Fortunately, the town has begun to address the OIG s concerns with a number of new processes and policies which were identified in this report. The town has conducted revised and more thorough training of staff, created and communicated a list of authorized p-card approvers, and instituted a policy prohibiting users from approving their own transactions, among other reforms. Although the OIG is encouraged by the remedial steps the Town of Davie has 13 City of Fort Lauderdale Commissioner s Misconduct in the Handling of Campaign Funds In August 2016 the OIG issued a final report finding probable cause that Fort Lauderdale City Commissioner Robert McKinzie committed misconduct in the handling of his campaign finances during his 2015 election campaign. The investigation revealed that Commissioner McKinzie accepted contributions exceeding the city s $250 limit on fourteen occasions, refunding only the four that were the subject of a media inquiry. He also underreported excessive contributions, omitted contributions, omitted a deposit and payout of funds unrelated to the campaign, withdrew cash from the campaign treasury, which he said he used to pay a campaign worker, failed to make all expenditures by check or a properly documented debit card transaction, accepted and misreported a prohibited cashier s check contribution, and apparently kept and failed to report a refund of campaign funds. Each of these acts was an alleged first-degree misdemeanor. In addition, the Commissioner committed other violations of Florida campaign finance law such as the failure to document the exact purpose of the expenditure on
approximately 60 campaign checks, the failure to document a bank credit, the failure to keep campaign treasury accounts current, the failure to properly dispose of surplus funds, and the failure to keep all campaign treasury records. The OIG found that the individual who kept the campaign bookkeeping and prepared the campaign treasurer s reports also committed campaign finance misconduct. Consistent with its charter mandate, the OIG referred this matter to the City of Fort Lauderdale, the Florida Elections Commission, and the Broward State Attorney s Office for their independent assessment of the application of local and state ethics and criminal law. Campaign Finance Misconduct by City of Pompano Beach Commissioners The OIG determined there was probable cause that City of Pompano Beach Commissioner Rex Hardin violated Florida s prohibition against a candidate paying him or herself a salary for their campaign activities. We substantiated that, months after his 2014 election, Commissioner Hardin issued invoices totaling $14,374 on behalf of Cypress Printing Center, of which he was the sole proprietor and employee and which was his sole source of income, other than his City salary as an elected official. Commissioner Hardin outsourced most of the actual printing to third-party printers, paid them with his personal credit card, and later charged the campaign up to 307% more 14 than he paid to the those printers. In addition to the mark-up for printing, he also itemized fees for his labor in the design, sorting, and delivery to the post office of his own campaign materials. The OIG investigation also identified other potential violations of campaign finance law by Commissioner Hardin. Specifically, the OIG investigation determined that Commissioner Hardin used funds from his campaign account to pay for a family lunch after the election, failed to properly close out his campaign account, and paid for post-election Christmas cards from campaign funds. During the investigation, the OIG sought to compare Commissioner Hardin s printing expenditures to those of other commission candidates competing during the same election cycle. Our review of the campaign treasurer s reports of the other commissioners revealed a number of additional violations of campaign finance law. The OIG recommended the commissioners obtain further training in campaign finance and reporting obligations. In addition, the OIG referred Commissioner Hardin s matters to the Florida Elections Commission and the Broward State Attorney s Office. The remaining matters were referred solely to the Florida Elections Commission, as appropriate.
Update: Florida Building Code Administrators and Inspectors Board approved Settlement Agreements with Former Fort Lauderdale Building Services Division Employees In the 2014-2015 Annual Report we reported that the Florida Department of Business and Professional Regulation (DBPR), acting upon information provided by the OIG, found probable cause for one violation of Florida administrative law against former Fort Lauderdale Building Services Division Building Official Christopher Augustin and two violations against former Structural Plans Reviewer Glen Osborn. The count against Mr. Augustin charged that he overlooked or ignored Florida Building Code requirements that were applicable to certain buildings vulnerable to flooding. The first count against Mr. Osborn charged that he acted without authority when he approved certain certificates of completion, and the second count charged that he approved the certificates of completion even though he knew them to be false. The DBPR charged Mr. Augustin and Mr. Osborn in complaints filed on September 24, 2015. On January 7, 2016, the Building Code Administrators and Inspectors Board approved a final order approving settlement agreements with Mr. Augustin and Mr. Osborn. Mr. Augustin was fined $500 and ordered to pay administrative costs in the amount of $259.41. He was placed on probation for one year. Mr. Osborn was fined $1000 and ordered to pay administrative costs in the amount of $235.45. He was placed on probation for 15 two years and ordered to complete seven hours of continuing education. Update: Elections Law Violation by City of Margate Former Vice Mayor and his Campaign Treasurer in the Handling of Campaign Funds In the 2014-2015 Annual Report we reported that the Florida Elections Commission (FEC), acting upon a January 2014 complaint filed by the OIG, found probable cause for 19 violations of the Florida Ethics Code against former Margate Vice Mayor and Commissioner David McLean and 62 counts against his campaign treasurer. The FEC approved a consent order with Mr. McLean on November 17, 2015, finding that he violated state law when he willfully certified campaign treasury reports known to be incorrect, false, or incomplete and failed to properly dispose of surplus campaign funds during and following his 2012 election. Mr. McLean paid a $500 fine as part of the agreement. On August 16, 2016, the FEC held a hearing and found that his campaign treasurer violated state campaign finance law 62 times, for which he was fined $6,200. The FEC concluded that the treasurer acted willfully, while knowing that, or showing reckless disregard for whether, the acts were prohibited. It found that he made a $400 cash contribution in another s name; made contributions himself that exceeded the $500 limit; failed to preserve the campaign account information for four years;
certified 18 Campaign Treasurer s Reports to be true, correct, and complete when they were not; falsely reported or deliberately failed to include information on seven campaign reports; failed to report seven contributions; and made thirteen expenditures without sufficient unencumbered funds in the account. Update: Elections Law Violation by Village Clerk of Lazy Lake The OIG referred this matter to the FEC in September 2014, without making a probable cause determination. In August 2016, the FEC entered into a Consent Final Order with Lazy Lake Village Clerk Joseph Fodera, in which he admitted that he refused or neglected to perform his duties as prescribed by Florida election laws and agreed to a fine of $50. Among numerous other findings, the OIG concluded in August 2014 that Mr. Fodera qualified the mayor and council members of the village in the 2012 and 2014 elections when in fact they did not meet constitutional, statutory, and charter requirements to become candidates or hold office. detect gross mismanagement, defined as material waste or significant mismanagement of public resources. The objective of CPOP reviews is to detect the vulnerabilities that make government entities susceptible to the waste of public resources, and to prevent that waste whenever possible. Utilizing the OIG s collective procurement, investigative and legal experience, the program is designed to randomly review recent or ongoing procurements and test the processes of each governmental entity. Occasionally, CPOP reviews identify misconduct or gross mismanagement that has already resulted in waste, fraud or abuse, in which case the CPOP staff proceeds to investigation. Over the course of the past five years, our CPOP staff has initiated 40 reviews, spanning 18 governmental entities and contracts valued over $152 million. The CPOP investigators have also teamed up with Audit staff to initiate reviews of internal controls and potential gross mismanagement at municipalities throughout Broward County. CONTRACT AND PROCUREMENT OVERSIGHT In order to fulfill its responsibility as an independent watchdog over the expenditure of taxpayer funds, the OIG has a specialized investigative program focused on public procurement and contract execution. The Contract and Procurement Oversight Program (CPOP) is a natural outgrowth of the OIG s responsibility to 16 One of the issues that arose in multiple instances this year was the improper use of contracts competed and negotiated by other governmental entities, a practice commonly known as piggy-backing. Although the practice is perfectly legitimate when properly utilized, we found that it frequently serves as a cover for noncompetitive procurement. In a review of emergency lighting purchases in the City of Coral Springs, the
OIG found that the city s policies for piggy-backing were not followed, although there was no evidence of waste. However, most disconcertingly, the purchases were not made in accordance with the terms of the contract that was purportedly piggybacked. This mechanism has the effect of making it appear that a government is utilizing a competitive contract, when in fact, staff is making purchases unregulated by competitive procurement requirements. In the investigation of the City of Hollywood described below, staff also purported to piggy-back a local cooperative contract, when in fact they were utilizing no contract at all. The misleading assertion made to the Hollywood City Commission was only one of multiple mechanisms utilized to attempt to legitimize misconduct. Misconduct and Gross Mismanagement by the City of Hollywood in the Procurement of Temporary Employee Services City of Hollywood officials obtained temporary employee services that were in violation of the city s procurement code, never covered by any written contract, never budgeted, and never authorized by the City Commission. The prices paid were not negotiated or competitively solicited, and there is evidence the city could have obtained a discounted fee had it sought one. A combination of the use of direct payment vouchers for payment and circumvention of the budget documentation procedures effectively concealed the unauthorized, unbudgeted and improperly 17 procured nature of the expenditures. In total, the city spent $973,864.34 for fiscal years 2013 and 2014 without the Commission s approval. During interviews with the OIG, city officials offered no justification for the procurement and payment of those services in violation of accounting, budgeting and procurement controls. It was apparent that city officials were aware of the use of temps and the costs associated with it, but the deficiencies in, and circumvention of, the city s processes allowed the unauthorized expenditures to be paid for two years. Only when the temp agency began to complain that it was losing employees to another service did the staff decide to bring the issues to the Commission. Rather than provide an accurate account of the use of temps, city officials glossed over the violations and provided the Commission with misleading and inaccurate statements. The OIG was encouraged by the remedial steps taken by the City in response to the preliminary report. However, we requested a status report be submitted within 90 days regarding the City s additional corrective actions in response to the matter. In its status report, the city stated that its senior management team has communicated publicly and individually that the inappropriate actions that occurred in the past were clearly wrong and unacceptable. The city has now implemented numerous protocols and procedures in response to the OIG s
investigation. Of particular significance, the city has created and implemented a contract compliance officer position; created and implemented a master contract list; modified the purchase order and direct payment voucher procedures; and increased training regarding procurement and contract administration. The city has also restructured the Procurement Division and reformed oversight of the procurement process. Additionally, after the publication of the OIG s final report, the city accepted the resignation of Finance Director Matthew Lalla and Procurement Director Joel Wasserman, who oversaw the activities discussed in the report. ETHICS The OIG s charter mandate requires the investigation, referral, and enforcement of ethics codes that apply to Broward s officials and employees, including the Code of Ethics for Elected Officials, found at Broward County Code of Ordinances Section 1-19 (Broward Code of Ethics), and the State Code of Ethics for Public Officers and Employees, found at Part III of Chapter 112 of the Florida Statutes. In the reporting period, our ongoing ethics investigation efforts resulted in action by other agencies and the OIG prosecution of the first trial under the Broward Code of Ethics, as described below. Our continuing and significant outreach, education, and reform efforts are also described here. 18 Ethics Enforcement During the reporting period, the OIG reviewed 52 tips and complaints and concluded 4 investigations involving potential misconduct as defined by state and local ethics law. First Prosecution Following extensive pretrial litigation and a hearing, former Lauderdale Lakes Commissioner Eric Haynes was found in March 2016 to have violated the Broward Code of Ethics for Elected Officials. It was the first-ever case to be tried under the Code. Mr. Haynes was found liable and fined $750 for failing to file for public inspection a copy of his 2013 Form 1 Statement of Financial Interests while serving as a Broward municipal elected official, in violation of Section 1-19(c)(7) of the Broward County Code of Ordinances. A municipal official s disclosure is filed for public inspection under the Code when it is filed with the clerk and its information is uploaded into the municipality s searchable internet database. This mechanism provides the public with centralized access to their municipal officials disclosures. Mr. Haynes was also charged with violating the Code s requirement to disclose outside employment and remuneration. The OIG presented evidence that Mr. Haynes received remuneration for his work as a managing member of multiple limited liability companies, but did not file the required disclosure. The
hearing officer found Mr. Haynes was not liable for that charge because the Code provision in effect at the time did not define employment, and was unclear about whether the term employment encompassed self-employment for the management of limited liability companies. As further discussed below, substantial revisions to the Code were made effective in December 2015, including a new definition of employment that defines it as providing services for any person or entity, other than the elected official's governmental employer, in exchange for remuneration. Mr. Haynes paid his $750 fine in full in April 2016. Update: Ethical Misconduct by Deerfield Beach Mayor Jean Robb In our last annual report, the OIG related that, in November 2014, we referred a matter to the Florida Commission on Ethics after we found probable cause that City of Deerfield Beach Mayor Jean Robb committed ethical misconduct including: misusing her elected position by attempting to obstruct the city s code enforcement efforts on a luxury automobile dealership whose owner had made donations to her favored charities; obtaining benefits for her church and pastor by directing City staff to issue an employee parking sticker to the pastor and to use City personnel and equipment to clean the church s parking lot, in violation of her legal duties as mayor; and other violations of state and local ethics laws. 19 In March 2016 the Commission, acting on our complaint, issued an order finding five counts of probable cause to believe that Mayor Robb corruptly misused her elected position, solicited or accepted a prohibited gift, and received unauthorized compensation. A hearing on whether Mayor Robb violated those provisions is pending. Ethics Education The OIG continued providing ethics education to elected officials, expanding availability to evening classes. During the reporting period, the OIG held six free ethics training sessions, primarily for Broward s elected officials. This office made it a priority to conduct training specific to the 2015 revisions of the Code. In February and May 2016, the OIG gave four opportunities for officials to attend a two-hour training session on the revised Broward Ethics Code. Seventynine officials, city attorneys, and OIG personnel attended these sessions. In June 2016 the OIG held two sessions of a twohour review course designed to help meet the state law requirement for municipal elected officials to obtain four hours of training in state ethics, public records, and open meetings law. Twenty-seven persons attended the two-hour class. Since late 2012, we have provided ethics training on 19 occasions for 400 attendees. The OIG has also continued its practice of requiring its own staff to obtain continuing education on ethics laws and rules applicable to them as well as those whom
they investigate. To that end, the Inspector General, the Deputy Inspector General, the Assistant Inspector General, and four Special Agents attended training sessions with elected officials during the reporting period. During the reporting period, our Ethics Counsel continued to provide ongoing guidance to the public, local officials, and the press on the OIG s interpretation of applicable ethics laws. Update: Ethics Code Reform In the prior reporting period, the Board of County Commissioners commenced an effort to revise the Broward Ethics Code. Based upon its experience in enforcing the Code, the OIG provided feedback regarding proposed changes to it, and in November the Board passed several revisions. The changes included: definitions for some previously undefined terms, such as vendor, contractor, outside/concurrent employment, and remuneration; elimination of lobbyist contact reporting by elected officials under certain circumstances; a data entry option in lieu of filing hard copies for certain information; linking hard copies residing on outside websites as an option to filing hard copies; the option of reporting remuneration from outside/concurrent employment by range instead of an exact figure; exceptions to the gift rules (which are still subject to state law), including - lobbyist, vendor, or contractor gifts up to $5 in value, - unlimited gifts from governmental entities, - unlimited customary sympathy gifts, - unlimited non-alcoholic beverages, and - unlimited tickets to charitable events under certain circumstances; requiring all material facts submitted for a binding advisory opinion be articulated in the opinion rather than in the request; reduction of the annual ethics training requirement from eight hours to four hours so long as two hours are interactive; adjusting the reporting period for ethics training; and providing disclosure deadlines. These revisions do not affect Broward s ethics structure, which is presently being reviewed by the Charter Review Commission Ethics Subcommittee. The OIG will continue to be an engaged party as discussions continue and will provide information and feedback as necessary. Intergovernmental Cooperation and Outreach In order for the OIG to effectively accomplish its mission of identifying and investigating misconduct and gross 20
mismanagement, it is essential to engender the cooperation of the individuals and entities that we examine. Many of the violations the OIG investigates are also enforceable only by other state or local agencies. Therefore, the OIG must actively pursue opportunities for outreach and intergovernmental cooperation. The OIG continues to maintain relationships with federal, state and local law enforcement, regulatory, and governmental agencies throughout the state. We have referred completed OIG investigations to various regulatory agencies including the Florida Ethics Commission, Elections Commission and Department of Business and Professional Regulation who have either initiated or taken action in a number of matters that were detailed in the related program sections above. The OIG is also a member of the South Florida Inspectors General Council, and the Financial Institution Security Association. We participate in the Law Enforcement Coordination Committee, which brings together law enforcement executives at the federal, state and local levels to discuss issues of mutual interest. We work with both the Miami-Dade and Palm Beach County Offices of Inspectors General regarding issues of mutual interest. We participate as members of the National and Florida Chapter of the Association of Inspectors General. Maintaining communications with local government leaders, stakeholders, and residents of the county regarding their 21 concerns and to inform them of the OIG s mission and the services it provides is an integral part of the OIG s success as an organization. In 2016, the Inspector General met individually with numerous governmental leaders including county commissioners and other elected officials. He also was a presenter at the ninth annual ethics seminar sponsored by the Palm Beach Planning Congress. He also routinely interacts with elected officials during ethics training provided by the OIG. At the request of the Lee County Charter Review Commission, our General Counsel made a presentation regarding the role of the Inspector General and the effect of Broward s ethics reforms. We also participated in the ethical governance day sponsored by the Miami-Dade Ethics Commission. Members of the OIG conducted outreach activities with local government agencies and community businesses as part of the National Institute of Governmental Purchasing s 18th annual reverse trade show sponsored by the City of Coral Springs. We conducted similar activities at a trade show sponsored by the Broward County Office of Economic and Small Business Development. In light of the substantial revisions to the Broward Code of Ethics, the OIG made a presentation to the Broward County Municipal Clerks Association at its bimonthly meeting in April 2016. The discussion focused on the changes to and clarifications of the disclosure requirements of Broward s municipal elected officials,
broward office of the the inspector general general including the various alternatives to making the information available on the municipalities websites. The OIG s website, www.browardig.org, is an essential resource both for providing and receiving information and for staying connected with all those whom we serve. It is designed to allow users to easily navigate the site to obtain information about the OIG including its mission, structure, authority and responsibilities. Users can access information about our activities, read our issued reports, stay upto-date about our recent activity, and find out how to contact us. Users can navigate 2016 from anywhere on the site to our Report Misconduct application, which encourages them to assist the OIG in combating fraud, waste, misconduct and gross mismanagement by providing information in a number of ways. To find out more about the OIG or to provide information regarding misconduct and gross mismanagement, please visit our website at www.browardig.org. The OIG also uses social messaging to inform the public of the issuance of reports and important activities. To stay connected to the OIG, follow us on Twitter @BrowardIG 22
BROWARD OFFICE OF THE INSPECTOR GENERAL ONE NORTH UNIVERSITY DRIVE, SUITE 111 PLANTATION, FLORIDA 33324 PHONE: (954)357-7873 FAX: (954)357-7857 HOTLINE 954-357-TIPS (8477) E-MAIL: INSPECTORGENERAL@BROWARD.ORG WEBSITE: WWW.BROWARDIG.ORG FOLLOW US ON TWITTER @BROWARDIG 300 copies of this public document were promulgated at a gross cost of $378.00, or a per-copy cost of $1.26, to provide annual reporting information.