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Audit finds Old School Square not in compliance with lease agreement

'It justifies what we have been told,' Delray Beach mayor says
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Posted at 9:54 PM, Sep 13, 2021
and last updated 2021-09-13 23:50:40-04

DELRAY BEACH, Fla. — The nonprofit that runs Old School Square in Delray Beach said it was "blindsided" last month when the three city commissioners voted to end their lease agreement after three decades.

On Monday night, the commission heard a report done by the city's auditor, who found the nonprofit was not in compliance with their lease agreement and were missing several reports dating back to 2016.

"It justifies what we have been told," said Mayor Shelly Petroli, who said she does not regret voting to end the lease. "This wasn't something that was happening in the last few months. This is something that was happening over several years."

Despite the audit report, there were still people in Delray Beach who disagree with the decision. Jim Chard said he is left wondering where the transparency has been.

"It looks like they have something to hide," he said.

There was public outcry at a commission meeting and a petition with more than 10,000 signatures, but the commission was set in its decision.

Commissioner Ryan Boylston said there are things in the audit that needed to be addressed, but there are also questions that will never get answered.

"Were we compliant with this arrangement? But that wasn't the scope of this audit," he said during Monday's meeting.

The city is currently working to put together plans for a new organization to take over Old School Square. There are 180 days before the lease runs out with the nonprofit.

The city has hired an outside attorney to handle any litigation between the city and Old School Square.

Read the Old School Square full statement below:

We take exception to the baseless and defamatory remarks made towards Old School Square at today’s City Commission meeting. Further, we take issue with the way the audit was conducted, as it was not at all impartial or independent. The City’s internal auditor states in her report that it is impossible to understand if OSS is compliant regarding our budgetary parameters regarding CRA funds. Had the auditor shared an open dialogue with our organization during the auditing process, she would have received information revealing the fact that we are in complete compliance. At today’s City Commission meeting, it was stated that we were not communicating with the auditor, however we have documentation that demonstrates just the opposite. We attempted on multiple occasions to contact the auditor during this process, requesting specific details on the reporting format the city desired, as no specific reporting formats are required by the lease. In the process of providing reports to the city, on July 19 we sent an email asking if the city had a preferred format for the various reports. No one from the City, including the auditor who was cc’d on our email, ever responded to us. Interestingly enough, within the Sept 13 “surprise” City Meeting agenda, the City auditor provided the City Commission those very example report formats that had been requested by Old School Square.

It was not lost on anyone how important this audit was. For the previous two months, OSS, the entity that founded the arts and cultural campus, built it from virtual scratch, and cultivated it for the past 30 years, was on the verge of losing it. This audit was a big deal to us. But interestingly, the City’s own auditor had ignored attempts to make things right, or deemed them unimportant, or simply desired to disrupt them.