Board of Commissioners Workshop Meeting

MINUTES BOARD OF COMMISSIONERS WORKSHOP MEETING MARINA FORENSIC AUDIT REPORT JANUARY 22, 2019 A workshop meeting of the City of Madeira Beach Board of Commissioners was held at 2:00 p.m. on January 22 , 2019 in the Patricia Shontz Commission Chambers at City Hall, located at 300 Municipal Drive, Madeira Beach, Florida. MEMBERS PRESENT: Maggi Black, Mayor Deby Weinstein, Vice-Mayor/Commissioner District 1 Nancy Hodges, Commissioner District 2 Nancy Oakley, Com missioner District 3 John Douthirt, Commissioner District 4 MEMBERS ABSENT: CITY STAFF PRESENT: Jonathan Evans, City Manager Clara VanBlargan, City C lerk Ralf Brookes, City Attorney 1. CALL TO ORDER Mayor Black called the meeting to order at 2:00 p.m. 2. ROLL CALL City Clerk Clara VanBlargan called the roll. Mayor Black opened to public comment. Doug Andrews, 90 14151 Avenue, following up on an email he sent to the City, asked if the other tlu·ee candidates running for Commission would be allotted the same amount of time as Commissioner Douthi11, who is also a candidate, to question the auditors. C ity Attorney Ralf Brookes explained the question and comment process, and said that following the presentation of the auditors, and the question and answering portion of the meeting, everyone would be given additional time to ask questions from the podium. 3. TOPICS FOR DISCUSSION A. Marina Forensic Audit Report - Glenn Gillyard and Ben Kincaid, representatives from Carr, Riggs & Ingram, LLC (CRJ) January 22, 20 19, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 1 of 12 City Manager Jonathan Evans turned the meeting over to Glenn Gillyard and Ben Kincaid, accountants with Carr, Riggs & Ingram, LLC (CRI), to begin their presentation. Mr. Gillard gave the background history of their company. Mr. Kincaid explained that his presentation was an overview of the Forensic Examination Report and encouraged everyone to read the complete examination report in its entirety. He explained that during the last fiscal audit performed by the City's external auditor, red flags were identified during their analysis performed on the marina operations and recommended that the City have a forensic examination of the marina to be done. The City looked at some of the internal controls and realized additional concerns, such as inoperable cameras. From among the accounting firms the City contacted, CRI was asked in June 2018 to look at the operations for an amount up to $15,000 to see if the red flags were of concern. During the performance of the initial procedures, some items of concern were identified and based on that information, the City Manager requested approval for CRI to complete a full forensic examination of the marina and the Board of Commissioners approved that request. The period for review discussed was from February 2015 through August 1, 2018, which is when CRI did their initial field work at the City. Wet slips and dry storage overview During the PowerPoint overview of the Forensic Examination Report, Mr. Kincaid showed satellite overviews of the marina, showing the layout of the marina, dry storage areas, wet slips, ship store, and an area for the Public Works Department. Three of the areas of concern discussed were the wet slips, dry storage area, and late fees. The marina has two types of customers and they are long-term customers who stay at the marina more than 30 days and the transient customers who stay less than 30 days. Agreements that customers are required to sign are maintained by the marina in hard copy, not scanned, and not provided to other City departments. Review showed those contracts lacked completeness, such as signatures, customer information, billing rates, and boating information. In the billings, there were incorrect postings, transients billed at long-term rates, inaccurate billing rates, and invoices that were voided and deleted six months after the original invoices were assessed. Out of 295 monthly dry storage renters identified during the period of review, there were only six of those renters billed the correct transient rates, which are higher than the rates charged to long-term customers. Marina staff had indicated that there were no special discounts provided to anyone, including employees. There is a long waiting list for wet slips and dry storage areas at the marina. Some spaces are kept for transient customers because the rate is higher, and they are constantly overbooking. Wet slips overview Per the City's website and CAFRs, the marina has 93 wet slips available for rent. However, the physical count of the wet slips at the marina showed less. According to the marina's wet slip permits from the Florida Department of Environmental Protection (DEP), it was determined that the City is authorized to have 93 wet slips, of which 85 can be rented. Because of the different configurations made at the marina, it was determined that there are 72 wet slips available for rental. The required lease and permit requirements for live aboard rentals authorized on Dock A is that 90% of the wet slips must be publicly available for rent on a first come, first serve basis and limited to a six-month stay during any twelve months, and the marina must maintain 10 boat lifts. The marina was in compliance and there were only 8 out of the 10 required boat lifts at the marina. January 22, 2019, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 2 of 12 Marina staff indicated that they are no longer accepting new live aboard renters and that had stopped a year ago at the time of the audit review. However, according to the data reviewed, there were several new live aboard renters identified in the last several months at the point of their review and they were not being assessed the required vessel inspection fees as mandated by the fee schedule authorized by the Board of Commissioners. Mr. Kincaid explained that the marina verification of the wet slips showed that there were no lists used to verify vessels, no documentation of count, and wet slips were not identified. Within the wet slip conclusion, there were variances between the actual number and the billed number of wet slips. An average of 4 wet slip customers were historically not charged on a monthly basis, approximately $56, 520.64 in lost revenue occurred over the 44-month time period of their review, and the exact cause oflost revenue was undetermined due to lack of controls and documentation. Dry storage overview Mr. Kincaid provided an overview of the dry storage findings. The marina maintains a dry storage area. The property is secured by a fence with two entry gates, one for the marina and one for the Public Works Department. They are secured by a key pad entry system and the gate code is for everyone, such as an employee, transient customer, and long-term customers, and is rarely changed by marina staff. The gates are occasionally left open overnight and that, along with the gate codes, allows unauthorized people at the marina. Boats, trailers, and other small non-motorized boats use the dry storage space. There are no distinguished spaces for the dry storage users, lack of documentation for the wet slips' storage, no documented physical counts, and although the trailer hitches are marked to identify customers, no one goes back and compares those names to what is actually billed in any given month. Similar to the wet slips, they had relied on various historical satellite imagery within their analysis because of the level of satellite imagery. They excluded the billings and small dry storage boats from the analysis because they could not accurately determine how many of those smaller vessels were at the marina based on unusable satellite images. Based on conversations with marina staff, they excluded certain boats and trailers that were attached to vehicles that may not have been utilized in the dry storage areas. They performed detailed reconciliations on all data that was available to them. There were occupancy issues located outside the marina gates. Within the dry storage conclusion, there are variances between actual number and billed number of customers. There was an average of 14 to 18 dry storage customers not historically charged monthly, there was approximately $80,597 to $103,625 in lost revenue over the 44-month time period of their review, and the exact cause of lost revenue was undetermined due to lack of controls and documentation. Late fees overview Mr. Kincaid said that regarding the late fees for both the wet slips and the dry storage areas, fees are required to be paid before the 15 th of every month. Finance staff had to continuously remind marina staff to assess late fees to the marina customers and out of the total fees that could have been assessed to marina customers, only 11 % were actually assessed late fees. Part of that was due to an informal late fee policy that was established by the former finance director, who formally requested that the marina staff to not assess any late fees until those customers were three months in arrears. Other issues regarding assessing late fees existed. Looking at the 11 % of the late fees that were assessed, only 33% of that total was actually collected by the marina and by the City. Without considering the informal policy that resulted in at least $33, 370 in lost late fee revenue to the City, just considering the first month in arrears. January 22, 2019, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 3 of12 Fuel sales and transfers Regarding their findings on the fuel, Mr. Kincaid explained the fuel sales, fuel transfers, fuel inventory, fuel discounts, and marina employee purchases. The marina does provide unleaded and diesel fuel sales to marina customers. In reviewing the sales price per gallon that were sold to marina customers, there were 28 exceptions where marina customers were not charged similar or comparable price per gallon as other customers on the same day or in the same period. With the 28 exceptions, it resulted in an additional $634 in lost fuel revenue. The marina's fuel pump system does not allow for any pre-payments of fuel or credit card holds. Customers would have to go into the ship store to request the pump to be turned on, go outside and pump the fuel, and then go back inside to pay for the fuel. Some customers did not pay and that had to be collected by marina staff. The City does purchase fuel for its equipment and vehicles via fuel cards issued by the City, and one exception to that is for the Fire Department's jet skis. Those are allowed to be refilled at the marina. In review of the general ledger, they identified other departments, including the marina, had utilized the marina's fuel system to pump fuel for equipment and vehicles. There was also general lack of review of those interdepartmental transfers and sign-offs on those. Fuel inventory Mr. Kincaid explained that because of the numerous purchases of fuel at the marina they provided a bulk purchase order for all three of the City's fuel vendors at the beginning of the fiscal year. Each time the marina or City requested more fuel, they obtained a verbal fuel quote from each fuel vendor, and based on that, they ordered from the vendor that provided the lowest cost. According to the City's purchasing policies, fuel quotes are to be documented on requisition forms before an order is placed, and it was found that most were completed after the fuel was ordered, delivered, and invoiced by that fuel vendor. Most of the quotes did not agree with what was listed on the fuel invoices. There were issues raised regarding other areas by the Finance Department surrounding the marina operations. When questioned by the Finance Department, most of which are confirmed by email, they were requested to defer to the marina management by the former city manager, Shane Crawford. This prevented some of the follow-up instances at the marina. There were lack of fuel readings and documentation concerning fuel deliveries by marina staff and one of the comments made by them during an interview was that they can account for every drop of fuel at the marina because of the implementation of the best fuel management system available. The Finance Department staff indicated that there were reconciliation issues with what showed in inventory than what was actually in inventory. In some cases, those variances were significant. There were limited attempts to address those reconciliation issues and the reasons given for the discrepancies did not jive. They performed their own fuel inventory and recalculations, and two significant variations. A fuel vendor had billed the City twice for the same order, which resulted in $27,000 in overpayment by the City. There were also fluctuations that could not be determined due to lack of documentation. Mr. Gillyard said the City recovered the $27,000 overpayment from the vendor. Fuel discounts Mr. Kincaid explained that in the fee schedule approved by the Board of Commissioners, it showed that there was a lack of authorization prior to the most recent fee schedule adopted on June 12, 2018. The City Clerk's research confirmed that, and that there was no authorization for those type January 22, 2019, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 4 of 12 of discounts prior to the fee ordinance adopted on June 12, 2018. During the review period from February 1, 2015 through June 12, 2018, it resulted in approximately $327,126 in unauthorized fuel discounts provided by the marina, and that was not authorized by the Board of Commissioners. They did additional procedures on the fuel discounts and it was determined that over 90% of the marina customers received at least one discount and 29% received at least two discounts. There were numerous overrides of the $0.20 per gallon rates. When asked how the marina documented that eligibility, marina staff stated that they know who qualifies for the discounts. In going over the overridden or error rates, they identified that a little over 1.65% were overridden on the 50+ gallon discounts, almost 3% on the Boat US discounts, and a little over 13% on the commercial discounts. That resulted in approximately $11,104 in lost revenue to the City. Because of the lack of documentation, the only fuel discount that they were able to test the eligibility on was the 50+ gallon discount. They identified that almost 38% of those that received the 50+ gallon discount was not eligible for that discount, which is in addition to the previous error of 1.65% and resulted in $5,000 a month in lost revenue. The $11,000 and the $5,000 number is not in addition to that previous number of$327,000. They thought it was important to note the amounts to the City. Marina employee fuel purchases Even though marina staff had indicated that there were no favors or special deals to City staff or to anyone else, they reviewed the available credit card receipts and there were 67 fuel sales to marina employees and to now former marina manager. Within the 67 fuel sales, it was identified that 48 fuel sales provided to them exceeded the maximum discount rate of $0.30 per gallon. Some of those were commercial discounts, which resulted in a $0.40 fuel discount rate per gallon. That resulted in $253 questionable fuel discounts to marina employees. Boat launch ramp overview Mr. Kincaid explained that within the boat launch ramp fees, it is conducted by the marina on an honor system, hoping people are honest and pay the required fees. It was indicated by marina staff that it was due to lack of man power, especially on busy days. The boat launch ramp is not visible from the ship store. The annual fees did not increase as expected as seen with other marinas but decreasing. When comparing the 2015 percentage rate to the year-to-date, FY 2018, that would result in $1,748 in lost revenue during October 2017 to July 2018. That number is not notated in their final conclusion due to lack of documentation and information during the timeframe of review. Ship store sales Mr. Kincaid explained that on the ship store sales, marina staff provide a variety of merchandise, such as snacks and drinks at the marina, and they typically try keeping a 20% to 30% margin on those goods, but they do not keep any type of perpetual inventory system. The only inventory count done was at fiscal-year-end. All store sales are recorded under ship store income and because of some of the similar rates among similar items, they were not able to identify what type of items were sold at the marina. Just looking from an overview of the ship store operations, most of the actual gross profit at the ship store was within the stated gross profit margins, most of the ship store sales were captured at the marina. Similar to the fuel sales at the marina, it was identified that there were marina employee purchases totaling $10,378 during the period of October 2016 through July 2018. January 22, 2019, BOC Workshop Meeting Minutes-Marina Forensic Audit Report Page 5 of12 Internal control recommendations Mr. Kincaid explained that out of some of the internal control recommendations, they recommended 25 of them for the City to implement at the marina operations. Some of the recommendations require time investments by the City, such as additional staff, staff training, and implementing new policies and procedures, and some of the recommendations require capital investments, such as cameras, fuel systems, and a marina accounting system. Property demolition overview Mr. Kincaid explained that during the performance of their initial procedures, they were asked by the City to expand their initial objectives to include an analysis of a demolition of a non-city owned property. The demolition services were identified through irregular expenditures discovered by the City Clerk's office via some public records requests. The property is located adjacent to the marina and is owned by entities owned by James Holton. The funds were expended for improvement or lease of that property from Mr. Holton. He showed a satellite overview of the property showing before demolition and a satellite overview of the property one year later after the expenditures had occurred. Mr. Kincaid explained that the expenditures occurred in 2014/2015, and were approved by the former city manager, Shane Crawford. The property was used for events hosted in part by the marina and by the City. Within the City's purchasing policy and other documents, the city manager's authority, including the current city manager, is limited to $15,000 in approving purchases. A competitive selection is required for purchases in excess of $1,000 and bids for purchases in excess of $15,000. Several of the purchases that were identified through the public records requests appeared to fall within the city manager's $15,000 approval level and those purchases would not be considered in their analysis. Based on the verbal documentation and the available emails to them, they were able to determine that there appeared to be a verbal agreement between the former city manager, Shane Crawford, and Mr. Holton and his entities regarding the demolition of the Fish Ice House that was located on the Holton property. The demolition services were provided by sole sourced, Cross Construction Services. The total demolition cost was $39,117, of which the City paid $23,617. It was identified that there were no competitive quotes and no competitive solicitation for the demolition services. All the requisition forms were signed off on by the former city manager, Shane Crawford, after the services had been provided and after the services had been invoiced to the City. There was no apparent approval from the Board of Commissioners for the city manager to exceed his $15,000 authority or to sole source the demolition services of Cross Construction Services. This was confirmed by research performed by the City Clerk. In a related email and related expenditures, the former city manager, Shane Crawford, stated in an email dated November 24, 2014 that "[W]e can't keep shoveling out these invoices. Somebody's going to get a hold of it .. .in fact, one already has." There was also another verbal agreement for the City managing the operations at the Holton Property for $400 a month and there was no Board of Commissioners approval for that management. Overall conclusion of forensic examination Mr. Kincaid explained that it was identified that there was limited oversite of the marina operations by the City, there was a general disregard for the City's purchasing policies and procedures by the marina, and it was a tone set by former city manager Shane Crawford, and the marina management. Tone at the top refers to the ethical atmosphere set by the management team, whether that be a January 22, 2019, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 6 of12 government enterprise or a private enterprise. If there is an attitude that purchasing policies do not apply to them, it sets a negative tone from the top causing the City not to care about the purchasing policy procedures. Mr. Kincaid explained that for total loss, it was identified that $550,000 were lost by the marina during the period of review from February 1, 2015 through August 1, 2018. Two substantial areas were the fuel discounts and the rental operations at the marina. There were other fuel errors of $16,000, and that loss is not in addition to the $550,000. It was important to notate the error rates and error losses to the City. Those were credits sitting on the fuel vendor's books and it was easy to obtain and reimburse to the City. Subsequent events Mr. Kincaid explained that since releasing their draft report to City management, there was an investigation that resulted in a recovery of $27,000 in overbilled fuel expenditures. The City management has already implemented a recommended review and revision of policies and procedures noted in their report. Based on their conversations with City management, they are making great strides in changing the ''tone at the top" and sending that throughout the City. That cannot change overnight, but great efforts have been made. Closing Mr. Kincaid thanked all the City personnel that assisted them in the audit and the City Manager and Director Pierce for their efforts and being very receptive to their findings. The· auditors responded to questions and concerns from the Board. The City Manager said it was staffs desire to address the findings and information contained in the report and to bring forward a plan for consideration by the Board at the February workshop meeting. Mayor Black thanked the auditors for their presentation. She said the public had questions concerning the audit and asked for a motion and a vote to suspend the rules of how public meetings are to be conducted. The motion would be to allow the public to ask questions regarding the audit by submitting written questions to be read into the record. Vice-Mayor Weinstein made a motion to have individuals complete a card with their name and address listed along with their question and to suspend the normal rules. Commissioner Oakley seconded the motion. City Attorney Ralf Brookes commented that it was important to still have the public come to the podium and comment afterwards. He asked that each card only contain one question. ROLL CALL VOTE: Vice-Mayor Weinstein "YES" Commissioner Hodges "YES" Commissioner Oakley "YES" January 22, 2019, BOC Workshop Meeting Minutes -Marina Forensic Audit Report Page 7 of12 Commissioner Douthirt "YES" Mayor Black "YES" The motion carried 5-0. Mayor Black opened to public comment. Robert Preston, 425 S Bayshore, had concerns with the question cards. John Hendricks, 569 Normandy Road, stressed concerns about training staff at the marina and obsolete equipment. He said Dave had done a great job and explained the reasons that he was not able to properly do his job. Rees Noren, 363 Medallion Blvd., said the card system needed to be ADA compliant because he had lost control of his fingers and the ability to write. Steve Kochick, 15301 2nd Street, said he was disappointed with the meeting starting at 2:00 p.m. because some residents could not attend. He said the Board could not vote at a workshop. Bill Heming, 503 150th Avenue, said fuel sales had exploded at marina and asked how much money was spent chasing $10. Marvin Merrill, 581 Crystal Drive, commended the City Manager and the Board for spending the $50,000 on the audit. Mayor Black called a recess at 3:18 p.m. and reconvened the meeting at 3:30 p.m. Curt Pressier, the City's Public Information Officer, began reading the comment cards submitted by the following people: 4 J. Roger Pryor, 223 144th Avenue, asked why an audit would not be welcome if it helped people perform their job well and ethically. Mayor Black commented in agreement. Robert Preston, 425 S Bayshore, asked the total revenue for the marina minus the expenditures. Mr. Kincaid said the information was on p. 28 of the audit. Finance Director Walt Pierce provided the information that he said was from the FY 2017 CAFR report. Robert Preston, 425 S. Bayshore, asked what would be done with the $17,850 that Chief O'Neal had stolen from the marina. The City Manager said the question did not pertain to the audit and he would discuss it at a later date. Helen Price, 13319 Boca Ciega Avenue, asked how the auditor missed the inappropriate fuel transfers made by non-marina employees. Mr. Kincaid said they were not always looking at minor expenditures. January 22, 2019, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 8 of12 Amy Verdensky, 388 150th Avenue, said fuel discounts were misconstrued as a loss instead of a promotion and asked what percentage of$327, 126.00 should be classified as advertising, and how much business would be lost if discounts were discontinued. Mr. Kincaid explained that this was not part of the finding procedures that they were authorized to do. The City Manager said the Board adopted a policy in June 2018 allowing for the fuel discounts. Rees Noren, 363 Medallion Blvd, said in the meeting packet, only 45 pages of the 2,000-page audit was provided. The time allowed to ask questions, did not permit a person to digest the audit in its entirety. He asked if there would be another meeting to question and appraise the findings of the auditors. The City Manager explained there would be additional meetings, but the auditors would not be present. He said the entire audit will be posted on the City's website. Janet Wolff, 401 150th Avenue, said due to the high amount of money found in the marina audit, should it be turned over to the U.S. Attorney's Office or the Department of Investigation for a criminal investigation. Mr. Gillyard said they do turn over the findings of audits to the State Attorney's Office, if they felt a criminal offense had occurred, and they could turn this one over to the Pinellas County Sheriffs Department for their review. Helen Price, 13319 Boca Ciega A venue, asked if the auditors were aware that employees paid for fuel with a discount, so they could perform City work, such as moving the firework's barge and placing swim buoys along the beach in a borrowed boat because the marina does not have a boat. Mr. Kincaid said they were made aware of it and they addressed it on p. 27 of the report. Janet Wolff, 401 150th Avenue, asked that since more than $500,000 was found by auditing one department, was the City planning to audit the other departments. The City Manager said they would be auditing the call centers, parking division, and the recreation department. Helen Price, 13319 Boca Ciega A venue, asked if the auditors were aware that the number of wet slips could change over time due to sand and mud shifting and that the number of public slips must be maintained. Mr. Kincaid explained that it was addressed in the report and in the presentation. Helen Price, 13319 Boca Ciega Avenue, asked if the auditors were aware that dry storage revenue was reduced due to the Public Works Department storing a large number of equipment at the marina for many, many months, and that pipes were still being stored at the marina. Mr. Kincaid explained they were aware that equipment was stored at a portion of the marina. Helen Price, 133 I 9 Boca Ciega A venue, asked if three competitive bids were obtained for the forensic audit of the marina. The City Manager explained that the City Manager was allowed to enter into contracts under $15,000 and that once they approached the threshold, the item was brought to the Board of Commissioners to allow further spending on the audit. Mr. Gillyard explained that six accounting firms were selected, and CRI was one of those six. Any one of those six accounting firms would be selected for a state contract without going through the bidding process. January 22, 2019, BOC Workshop Meeting Minutes -Marina Forensic Audit Report Page 9 of12 Helen Price, 13319 Boca Ciega Avenue, asked if there was eye witness evidence and documented proof that fuel discounts were authorized by the BOC in 2002 and if the audit would be properly reissued to show only $223,558.92 at issuance. Ben Kincaid said it would be up to the City of Madeira Beach to request a second audit. Robin Biloski, 118 131 st Avenue, asked the mission of the marina and, if it would be a public enhancement like parks, recreation or a money maker, and would it be addressed in a new comprehensive plan. The City Manager explained it was the intention to run the marina as a successful Municipal operation and that it was a complement in the City's inventory of assets as a self-sustaining operation. The intent is insuring the appropriate policies, procedures, and checks and balances are in place, employees are trained and provided the opportunity to be successful, and that the progress being made would make the marina more of an asset than already. In about six to eight months, significant changes should be seen. J. Roger Pryor, 223 144th Avenue, asked why it would take six to eight months to correct the problem at the marina when the corporate world only allowed six to eight weeks, max. The City Manager explained that, there are certain elements having to be researched and there is appropriate technology at the marina. The marina is not protected from viruses, etc., there are concerns with technology deployments, and they need to go through a process to secure certain contractual services. The small group of employees at the marina work long hours doing multiple jobs and the City needed to support them and provide the tools to be successful. He is confident that the marina should be ready to go back through this process and check the boxes in about six to eight months, if not sooner. Doreen Moore, 13019 Boca Ciega Avenue, said Commissioner Oakley had mentioned fund balances and asked if any of the $550,000 loaned by City to the marina to build the ship store had been returned. The City Manager explained there is a payment schedule in place and the marina had been paying on the balances owed. They will have a more in-depth conversation about the Capital Investment that will need to occur at the marina and the possibility of deferring some of the payments for investment purposes so they could address the items contained in the overall analysis, which will be brought back to the Board. Doug Andrews, 90 141 st Avenue, asked what type of marina experience the auditors had. Mr. Kincaid explained they only do forensic engagements and some of those are private marinas, Governmental and numerous other marinas, and cities that have marinas. They had consulted with Mr. Marsicano and conducted interviews with City staff and employees. The information was included in their report. They relied on the information that was given to them. All the marina employees were provided a copy of the report. Doug Andrews, 90 141 st Avenue, asked which City officials had spoken to John Houser regarding the discrepancies in the CAFR report. Director Pierce explained what occurred and said the auditor told him about the discrepancies and he and the City Manager looked into it. Doug Andrews, 90 141 st Avenue, asked if the $27,661 overbilled for fuel was an oversight of the Finance Department or the marina. Mr. Kincaid said it was a combination of failures with the January 22, 2019, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 10 of 12 marina, as they approved invoices and then those were passed to the Finance department for payment. Director Pierce said there was a shared responsibility. The invoice slipped through for payment. There is a new procedure in place to prevent that from happening again. Helen Price, 13319 Boca Ciega Avenue, asked why the auditors went outside the relevant time of February 1, 2015 through August 2018, and outside the geographical limits of the Mariana to discuss a building on neighboring property. Mr. Kincaid said it was mentioned in the presentation they were made aware of expenditures that were outside the scope of the initial engagement. The City asked CRI to consider that and report back to them any findings and the City would respond to any public records requests. Mr. Kincaid said CRI modified their procedures to consider those expenditures. Helen Price, 13319 Boca Ciega Avenue, asked who drafted p. 40, the last page of the report and why the report was not signed. Mr. Kincaid said he had written most of the report and it was reviewed by Mr. Gillyard and a third party. The report was prepared by Carr, Riggs & Ingram, LLC and the audit report had the firm's stamp on it. Doreen Moore, 13019 Boca Ciega Avenue, asked if other marinas offered fuel discounts and if they were similar to that of the madeira Beach marina. Mr. Kincaid said he was aware of other marinas in the area that offered various type of fuel discounts. Mr. Gillyard added comment. Robert Preston, 425 Bayshore Drive, asked if the City could provide a hard copy of the audit to candidates. The City Manager explained the audit is a public document and is available on the City's website. The Clerk's office has several copies of the presentation for public view. John Hendricks, 569 Normandy Road, asked if there were plans to build a hi-dry storage building to increase profits at the marina. The City Manager explained the item would have to come back to the Board for further discussion. There are 25 items in the audit report that need to be addressed and to look for opportunities to enhance business opportunities at the marina. John Hendricks, 569 Normandy Road, asked why they did not know ahead of the time the audit would cost more than $15,000 and if it was a down payment. The City Manager explained he did not know the cost. The first $15,000 he communicated to the Finance Director and after conversations with CRI, they went to the Board of Commissioners to request additional funds so the elements of the audit could be completed. Helen Price, 13319 Boca Ciega Avenue, asked if fraud, theft or criminal activity were found and why fraud was discussed in the conclusion. Mr. Kincaid explained fraud was always a consideration, and as mentioned in the conclusion section of the audit, fraud could have occurred. Mr. Gillyard explained they worked with the information given to them -ai_!d it was not their call to call it fraud. / Robert Preston, 425 Bayshore Drive, said about a year ago, the Board refused a grant for a pump out fire boat and asked if the City could revisit the grant or was it lost fo-rever. January 22, 2019, BOC Workshop Meeting Minutes -Marina Forensic Audit Report Page 11 of12 Doug Andrews, 90 14 P 1 A venue, had concerns with the audit and said John Houser had commented to Walter Pierce that the City spent $50,000 on an audit because something was said to a new employee. He said that Ms. Weinstein owed Dave Marsicano an apology for slandering his name. Director Pierce clarified there was communication between the City auditor and the Director of Finance regarding the auditor's findings. The auditor had made recommendations or suggestions and there is no obligation. Some of his findings may get shared with the Board of Commissioners. Doreen Moore, 130 19 Boca Ciega A venue, said she looked at the report from Mr. Houser and looked at the 2016 CAFR Repo1t and it was clear that the City's expenditures were exceeding their incom e and that had been given to the prio r commission. J. Roger Pryor, 223 144th Avenue, said his concept of an audit is an opportunity, it not a witch hunt, and his experience with audits is to seek the truth. Everyone needed to come together and work through those things. Helen Price, 133 19 Boca C iega A venue, recalled that in 2002, the fuel discounts were discussed and said the audit needed to be reissued with the amount of $223,558.92. Mayor Black thanked the audito rs for their time. Mr. Gillyard thanked the City for allowing CRI to present. 4. ADJOURNMENT Mayor Black adjourned the meeting at 4 : 18 p.m. ATTEST: II /) I ~I CZ~ (/0.A-~l 6_,..__ Clara VanBlargan, MMC, MSM, City Clerk January 22, 2019, BOC Workshop Meeting Minutes - Marina Forensic Audit Report Page 12 of 12