RIVIERA BEACH, Fla. — An audit of the city of Riviera Beach released Monday found more than $1 million in questionable spending, according to Palm Beach County’s Office of Inspector General.
Inspector General John Carey said the audit was prompted after there were potential insurance premium overpayments for employees who no longer worked for the city Riviera Beach.
Carey said the audit focused on “employment separation activities, including whether employee separations were properly and accurately processed and adequately documented.”
“The city was very cooperative with us … they acknowledge they had a lot of problems," said Carey. “This was a very extensive and complex audit that took some of our best folks looking at it.”
The audit found that Riviera Beach’s employee separation process “lacked adequate policies and procedures and review and oversight activities.”
Responding to the report in an interview with Contact 5, city manager Jonathan Evans said, "we have put internal processes in place to ensure we are better managing this account."
"We’re going to take additional steps because this is something that’s not acceptable to this administration," added Evans.
According to Carey, the audit found the following:
1) Paid for insurance benefits for former employees
2) Did not recoup tuition refunds from employees who separated from the City and lacked sufficient documentation to justify the payment of training and education expenses
3) Paid former employees amounts that were not in compliance with policy and labor agreements or lacked adequate documentation
4) Did not remove computer access upon separation for five former employees
5) Did not process employee separations in compliance with applicable policy, consistently, or in a timely manner
The audit identified more than $1.2 million in questioned costs and $4,968 in identified costs that potentially could be recouped.
Questioned costs are defined as “costs or financial obligations that are questioned by the OIG because of an alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, other agreement, policies and procedures, or document governing the expenditure of funds; a finding that, at the time of the OIG activity, such cost or financial obligation is not supported by adequate documentation; or, a finding that the expenditure of funds for the intended purpose is unnecessary or unreasonable. As such, not all questioned costs are indicative of potential fraud or waste.”
Identified costs are defined as “costs that have been identified as dollars that have the potential of being returned to the entity to offset the taxpayers’ burden.”
“In our investigation, we found no red flags or fraud indicators during the audit, that there was any person who was intentionally letting people keep insurance…” said Carey. “It happened across the board for a number of different years in a number of different departments.”
Evans told Contact 5 that "we had one of our individuals that was suspended as a result of this."
The Palm Beach County Inspector General said Rivera Beach staff have taken corrective actions to address the issue.
"If you don’t have the proper internal controls, and you don’t have the right people in place, being good stewards of the public tax dollars, that’s when those type of situations occur," said Evans.
Below is the full audit released Monday by the inspector general: