PAHOKEE, Fla. — A newly released audit from the Florida Auditor General examining what happened with more than $3 million in grant funding that was intended to help boost the city of Pahokee’s struggling economy, uncovered alleged mismanagement and a growing list of questions.
According to the report, Pahokee has spent upwards of $3.1 million in state-issued grants for a “state-of-the-art marina facility” since 2017.
WATCH: Audit raises questions about where grant money went
Today, most of the boat slips at the Pahokee Marina remain empty. A waterfront tiki restaurant with panoramic views of Lake Okeechobee has sat vacant for more than a year. A handful of anglers dot the sidewalks, quietly waiting by their fishing poles.
In its report, the Office of the Auditor General detailed nine findings:
- A lack of policies and procedures to ensure compliance with grant terms and conditions.
- Selection of construction services without a competitive process, as required by state law.
- Grant money was not spent in accordance with city ordinances.
- A lack of policies and procedures to maintain leased sovereign submerged land.
- A lack of procedures to monitor compliance with the lease of a restaurant space located at the marina.
- The city had filed its required financial audit reports late (in one case, more than a year late).
- The city had not ensured that its annual financial statements were prepared on time and “in accordance with generally accepted accounting principles.”
- The city did not use an auditor selection committee or a competitive process to select its auditing service, as required by state law.
- A lack of policies and procedures to mitigate, detect, or report known or suspected fraud.
Among the Auditor General’s findings, the city spent more than $300,000 for items not included in the grant project’s “scope of work,” along with nearly $700,000 on vague invoices, which left inspectors unsure of what work was being paid for, and whether it got done.
The auditors also noted multiple grant deliverables that still aren’t complete, and some incomplete work that was paid for — according to the city’s records.
Auditors found Pahokee paid $150,000 for a deck and fishing pier that were never built. Despite a ruling from a Palm Beach County judge ordering the contractor return most of the $150,000 to Pahokee, the city never followed up to collect, according to the audit.
Another big part of the marina project centered around the former restaurant.
According to the audit, the city used grant money to pay for improvements to the facility, and signed a 10-year lease with tenants whose first year of rent was one dollar.
The restaurant was open for 13 months, before closing in October 2023.
The city never recouped damages from the broken lease, the report said.
Pahokee
'Systemic problem': City can’t account for nearly $2M in taxpayer funds
Pahokee City Manager Michael Jackson, who’s worked for the city for just under a year, agreed to meet WPTV Chief Investigator Jamie Ostroff at the marina, but refused an on-camera interview, saying he believed it wasn’t in the city’s best interest.
He noted that the city had undergone four audits in the past year and was on its way to fixing the deep-seated issues that have plagued Pahokee’s city hall for years.
WPTV received this response from the city of Pahokee regarding the audit:
In his written response to the auditor, Pahokee Mayor Keith Babb either acknowledged or concurred with each of the nine findings detailed in the report.
“During the audited period, the City’s inability to ensure consistent compliance with legal, regulatory, and policy requirements was affected by staffing instability and insufficient training among key management and fiscal personnel,” Babb wrote. “Additionally, the City acknowledges that its purchasing policies and ordinances are outdated and require revision.”
Babb wrote that the city is working on new plans and policies to address its administrative issues, and that some of those plans have already been set into motion.
Read the full report below:
