Okaloosa County BOCC — February 11, 2013 — February 11 Special Meeting Tallahassee — reading text

February 11, 2013 Special Called Meeting A Special Meeting of the Okaloosa County Board of County Commissioners was called to order at 2:00 p.m. EST in Room 309 of The Capitol in Tallahassee. Members present were Don Amunds, Chairman; Dave Parisot, Vice Chairman; Nathan Boyles; and Kelly Windes. Also present were Don Howard, Clerk of Circuit Court; Gary Stanford, Finance Officer, Clerk’s Office; John Dowd, County Attorney; and Jim Curry, County Administrator. Commissioner Wayne Harris was not present. Members of the Joint Legislative Auditing Committee are: Senator Joseph Abruzzo, Chair Representative Lake Ray, Vice Chair Senator Rob Bradley Senator Alan Hays Senator Jeremy Ring Senator Wilton Simpson Representative Daphne D. Campbell Representative Gayle B. Harrell Representative Daniel D. Raulerson Representative Ray Rodrigues Representative Cynthia A. Stafford Members of the local legislative delegation also in attendance were Representative Doug Broxson, District 3, and Representative Matt Gaetz, District 4. Senator Joseph Abruzzo, Chairman of the Joint Legislative Auditing Committee, called the meeting to order. Roll Call was taken of the panel. The first discussion before the Committee dealt with local governments which have failed to file an annual financial report and/or annual financial audit. The second item before the Committee was discussion on the Okaloosa County Board of County Commissioners’ oversight of the Tourist Development Council and use of tourist development taxes and funds received from British Petroleum (BP). This portion of the discussion began approximately 11 minutes into the meeting. Senator Abruzzo stated at the Committee’s last meeting (February 4) certain officials were asked to attend. Mr. Ted Sauerbeck, Deputy Auditor General, was asked by Senator Abruzzo February 11, 2013 -1- Minute Book 68, Page Okaloosa County Board of County Commissioners to provide a brief overview of the audit findings presented last week. The Senator also noted the last tab of the agenda package contains information and correspondence from county citizens. Mr. Sauerbeck stated the scope of the audit focused on the internal controls relevant to use of tourist development taxes and funds received from BP. From the period of May 1, 2010 through May 31, 2012 the approximate amount of tourist development funds involved was $22 Million and for BP was approximately $12 Million. Mr. Sauerbeck noted investigations were being conducted by the State Attorney, Sheriff’s Office, FDLE, and FBI. The Auditor General’s Office did consult with law enforcement during the audit to ensure it did not interfere with those investigations. There were 25 findings and recommendations in the following broad categories: organizational oversight, fraud controls and control risk assessments, procurement, special events grants and sponsorships, allowable uses of restricted resources, and miscellaneous. Mr. Sauerbeck stated the Board of County Commissioners did not establish budgets for restricted expenditures. The TDC and TDC subcommittees performed actions outside the advisory capacity. He said goods and services were purchased involving the BCC, TDC, or TDC subcommittee members representing a conflict of interest and contrary to law. Mr. Sauerbeck stated there was no Fraud Response Plan and no periodic risk assessments for potential fraud or control risks. He reported that every phase of procurement was in need of improvement. Mr. Sauerbeck advised that contracts with two advertising and marketing firms did not include provisions to protect the county’s interests. He said there was inadequate review of expenditures by the marketing firms and several invoices did not adequately or accurately describe services. He added the county did not require these firms to use competitive procedures for procurement of goods and services. During the specified time period (May 2010 – May 2012) there were no written policies and procedures to govern award of special event grants or sponsorships. Mr. Sauerbeck stated $2.5 Million was used in this two-year period to pay for lifeguard and beach patrol services, noting that neither use is expressly authorized by law. He further stated that $118,000 of the BP grant was used in manners contrary to the terms of the grant agreement. Another $208,000 in debit card usage had no evidence of allowable purchases pursuant to terms of the BP grant. Mr. February 11, 2013 -2- Minute Book 68, Page Okaloosa County Board of County Commissioners Sauerbeck reported the rate billed for an EMS vehicle at one station was contrary to the rate in the BP agreement and resulted in an overcharge of $27,000. Additionally, payment of $385,000 to a county-contracted vendor responding to the oil spill did not have adequate support. Mr. Sauerbeck concluded with the following remarks: • control over fuel card usage needs improvement • county has not established adequate controls over electronic funds transfers • control over employee access privileges to data and information technology resources needs improvements • the county did not always comply with the Sunshine Law regarding the recording of minutes of the TDC and TDC subcommittee meetings. Mr. Abruzzo stated there are four commissioners present: Don Amunds, Dave Parisot, Nathan Boyles, and Kelly Windes. Also in attendance are County Attorney John Dowd, County Administrator Jim Curry, Clerk of Courts Don Howard and Finance Director Gary Stanford. Mr. Abruzzo stated TDC Attorney Steven Hall is also present but he understands Mr. Hall resigned that position last week. Also, the Zimmerman Agency is represented by Tom Shulte. Mr. Abruzzo said the Committee requested the three county commissioners in office from May 2010 through May 2012 be in attendance at today’s meeting. He stated County Commissioner Wayne Harris is not present, noting Mr. Harris was Chairman during that time period. Mr. Abruzzo advised that one of the audit findings relates to Mr. Harris and a $27,000 sponsorship to an organization (Crestview Chamber of Commerce) for which Mr. Harris is the Executive Director. Mr. Abruzzo stated the members of the TDC were also asked to be in attendance today. He reported the BCC asked the four county- appointed TDC members to resign last Tuesday. Mr. Abruzzo pointed out there are no TDC members here. He said, however, that two county commissioners here today were part of the TDC during that time period (Mr. Amunds and Mr. Parisot); he added that Mr. Windes is now the liaison commissioner to the TDC. Mr. Abruzzo said he believes someone with the county would like to begin with comments. Mr. Curry replied that Chairman Amunds is present. February 11, 2013 -3- Minute Book 68, Page Okaloosa County Board of County Commissioners Mr. Amunds commented there is one TDC member, Warren Gourley, who has not yet resigned. He said he would like to read a portion of his prepared statement, offer a PowerPoint presentation, and then complete his statement. Mr. Amunds thanked the Committee for the opportunity to speak on what has been a dark hour in Okaloosa County history. He acknowledged the request for the appearance today and apologized for not attending last Monday. Mr. Amunds said it was his understanding the meeting was for the Auditor General’s Office to present a report on its findings on the recently completed audit on the Tourist Development Council and BP funds and to afford the county an opportunity to address the aspects of the county’s corrective action plan. He said Commissioner Boyles represented the commission and had detailed and specific information regarding the AGO audit and the county’s response. In an effort to comply with the Committee’s request, Mr. Amunds said proper public notice of the meeting to ensure compliance of the Sunshine Law was made to allow the members of the BCC to appear voluntarily. Mr. Amunds continued his opening remarks detailing the circumstances leading to today’s meeting before the Committee. He provided a timeline of events beginning with the BP Deepwater Horizon oil spill in April 2010 (one month prior to Mark Bellinger’s employment with Okaloosa County) to May 2012 when the Board learned of the yacht purchase, the house purchase, of Mr. Bellinger’s suicide, and of the subsequent law enforcement investigations. At this time Mr. Abruzzo stated the Committee did invite members of Okaloosa County’s local legislative delegation to attend and acknowledged the arrival of Representative Matt Gaetz. Senator Bradley referred to Mr. Amunds’ comments regarding discovery of involvement in the purchase of the house for Mr. Bellinger and asked him to repeat those details. Mr. Amunds began by saying that one of the vendors contacted him when Mr. Abruzzo interrupted and swore him in. Mr. Amunds stated that on May 3, 2012, Okaloosa County officials were contacted by one of the tourist development advertising agencies to say they may have participated in a TDC financial transaction that resulted in what would later be determined to be the purchase of a house titled to Bellinger and his wife. He said this was the first clear indication of a crime being committed and the county immediately contacted the Sheriff’s Office. February 11, 2013 -4- Minute Book 68, Page Okaloosa County Board of County Commissioners Continuing, Mr. Amunds recited that on May 4, Bellinger was found dead in Alabama of an apparent suicide. And, on May 9 the Board had received a letter from the Sheriff and the State Attorney requesting cooperation and asking the BCC not to conduct an independent audit or independent examination of witnesses during the ongoing criminal investigation. He said he wants to be clear that this letter was not intended to prohibit the Board from implementing immediate or long-term actions. Mr. Amunds felt the letter was designed to ensure no cross contamination of witnesses. He noted the county complied with the request and cooperated fully with all investigating agencies. Mr. Amunds stated the county took action on several fronts. Those efforts are not yet complete and will continue in the days and months ahead. Mr. Amunds stated on May 15, 2012, which was the next meeting following disclosure of the misappropriation of funds and learning of the criminal activity which had taken place, the Board moved forward with emergency actions. He requested an opportunity to begin the PowerPoint presentation as this time. Senator Abruzzo granted permission. Mr. Amunds began to explain the changes which had been put into place regarding “Operating Procedures” when Senator Bradley requested clarification on who the Tourist Development Director reports to. He said it appears on the organizational chart that at one time the TDC director reported to the County Administrator but was changed to reporting to the BCC. Mr. Amunds answered the TDD director now reports to the County Administrator. Senator Bradley asked Mr. Amunds to explain his understanding of the role of the Clerk of Courts Office in pre-audit and review after payment. Mr. Amunds replied it is his understanding when an item comes from Marketing (advertising agency), it is directed to the Marketing Committee of the TDC. After review there, it is sent for review to the Tourist Development Council. He said once a recommendation is made by TDC, the Clerk’s Contracts and Grants Department reviews it and the item is then sent to the BCC representative. From there it is forwarded to the County Administrator and to the BCC for consideration. He said it then goes back to the Clerk’s Office for a final review before the check is cut. Mr. Amunds suggested Mr. Howard may be able to