Summary

The results of our operational audit of the City of Riviera Beach and the Riviera Beach Community Redevelopment Agency for the period October 1, 2004, through November 30, 2005, and selected actions taken prior and subsequent thereto are as follows:

Finding No. 1:  Except for procurement policies and procedures, the City did not have written policies and procedures formally adopted by the City Council for its accounting and other business-related functions.

Finding No. 2:  The City’s cash collection procedures could be improved.

Finding No. 3:  The City had not established adequate controls over tangible personal property. 

Finding No. 4:  The City exceeded its budgets for the 2005 and 2006 Jazz and Blues Festival by $120,452 and $383,736, respectively, and had not remitted sales tax relating to the Festival to the Florida Department of Revenue.

Finding No. 5:  The City did not invoice the tenant leasing space at the City Marina in accordance with the lease agreement.  Additionally, reductions to the rental fees charged to the tenant for lunches charged at the tenant’s restaurant, purchases at the tenant’s ship’s store, and various other items were not documented by invoices or receipts supporting the public purpose served.

Finding No. 6:  The City did not have written policies and procedures regarding the authorization and documentation requirements for granting complimentary admissions to the City’s Barracuda Bay Aquatic Complex.  Complimentary admissions were granted during the school spring break week in 2005 based on a directive that indicated the Mayor agreed to pay the admission fees.  However, as of April 2006, the Mayor had not paid and had disputed the amount due.

Finding No. 7:  Procurement card transactions were not always authorized by City policy, approved by supervisory personnel, supported by receipts, documented as to the public purpose served, or within transaction limits set by City policy.  Additionally, the City could not provide documentation that a refund was received for a purchased item returned, and bids were not always obtained when required by City Ordinance.

Finding No. 8:  The City used outside law firms to alleviate the City Attorney’s workload; however, it may have been more cost effective to hire an additional attorney.  Also, payments to outside law firms for out-of-pocket expenses were not always supported by receipts, payment approvals were not always documented, and the City paid for the same services twice.

Finding No. 9:  Contrary to City Ordinance No. 2412, the City did not competitively bid for certain repairs to the Wells Recreation Center. 

Finding No. 10:  The City did not competitively select contractors for solid waste and recycling services since 1993.

Finding No. 11:  The City entered into a partnership with the Riviera Beach Youth Football League to run the City’s youth football program without the use of a written agreement that encompassed all significant duties and responsibilities of both parties.  In addition, the City did not provide for the required cure period in terminating the agreement with the League.

Finding No. 12:  Contrary to Section 112.313, Florida Statutes, the City contracted with a member of one of its advisory boards to provide grant coordination services.

Finding No. 13:  Contrary to Section 218.64, Florida Statutes, the City pledged a portion of half-cent sales tax revenues for the repayment of a bond issue obtained to pay the Riviera Beach Community Redevelopment Agency’s (CRA) bond anticipation notes.

Finding No. 14:  The CRA expended approximately $5.6 million dollars from October 2002 to November 2005 for various consulting and professional services without an agreement with a Master Developer and without accomplishing the projects outlined in the 2001 CRA Plan.

Finding No. 15:  The CRA did not have written policies and procedures formally adopted by the CRA Board for its accounting and other business-related functions.

Finding No. 16:  The CRA’s budget for the 2005-06 fiscal year did not include a revenue source or an appropriation for the repayment of $7,010,000 in bond anticipation notes that were due in July 2006.  Additionally, we noted overexpenditures in the CRA’s 2004-05 fiscal year budget and only cash basis budget-to-actual comparisons were provided to the CRA Board.

Finding No. 17:  The CRA did not have written policies and procedures for debt issuance providing for a determination as to the amount of financing needed, timing of the needed funds, or availability of financing options.  The CRA issued bond anticipation notes without a detailed written plan indicating the purpose of the issuance and how the proceeds would be used.  The proceeds of the bond anticipation notes were commingled with the CRA’s tax increment funding and other revenues, and a majority of the funds were not used in accordance with the 2001 CRA Plan.

Finding No. 18:  Expenditures of the CRA were not always supported by receipts or invoices to document that the transactions were valid, served a public purpose, and were in accordance with the CRA Plan.  Payments for contractual services were not always supported by invoices detailing the services rendered, were not always in accordance with the written agreement, and one consultant was reimbursed twice for the same expenses.

Finding No. 19:  CRA Board approval was not provided for some consulting services contracts and some contracts did not contain clearly defined deliverables or total contract costs.  For one consulting firm, the CRA paid $849,042 in excess of the CRA Board-approved Work Order and the CRA could not provide documentation to evidence that the tasks outlined in the Work Order had been received.  The CRA did not provide a cost/benefit analysis demonstrating that the outsourcing of functions performed by the firm was more cost effective than using CRA employees.  In resolving disputed claims from one consultant through the legal process, the CRA spent $150,077 more than the disputed amounts.

Finding No. 20:  The CRA leased more office space than it required, although some space was subleased to one of the CRA’s consultants.  In total, the CRA paid $84,235 for office space not utilized or subleased from May 2001 to May 2006.  The agreement for the subleased space extended beyond the lease period between the CRA and the landlord and, as of October 2, 2006, the sublessee owed the CRA $32,180 in sublease payments.  In addition, the CRA did not provide documentation of sales tax collected or remitted for the sublease payments.

Finding No. 21:  The former CRA Executive Director was employed without the benefit of a written agreement clearly documenting the terms and conditions of his employment.  Further, the CRA did not provide documentation of CRA Board approval of his compensation for part of the period of his employment.  Finally, the CRA treated his compensation as though he were an independent contractor rather than an employee, possibly contrary to the Internal Revenue Code.

Finding No. 22:  The CRA’s written agreement with its financial institution did not include restrictions as to where funds in CRA bank accounts could be transferred.  Also, the CRA provided for only a single-control procedure in which fund transfers could be made and approved by the same individual.

Finding No. 23:  The CRA did not implement all recommendations made by the Financial Review Advisory Committee in its December 2004 report.

Finding No. 24:  The CRA did not require the Executive Director to maintain a vehicle log for the CRA-provided vehicle assigned to him to demonstrate the vehicle usage served primarily a public purpose and to document and calculate the amount of taxable income that should be subjected to employment taxes and reported to the Internal Revenue Service.

Finding No. 25:  The CRA’s report of activities for the 2003-04 fiscal year consisted only of its audited financial statements and did not include a description of activities, contrary to law.

The City Manager’s and the Riviera Beach Community Redevelopment Agency (CRA) Executive Director’s responses are included in the audit report as Appendix B.