Three weeks before City Manager Monte Falls told Vero Beach 32963 he was “flabbergasted” by news Vero was facing an imminent state funding cutoff for failure to file its FY2022-23 audit, his Finance Director Steve Dionne was publicly informing the City Finance Commission the overdue audit would not be finished for another two months and that Vero had already started incurring costly penalties. Is it reasonable to believe that Falls, who was held blameless for this debacle at last week’s City Council meeting, remained so unaware of the magnitude of the problem festering in his finance department? At the Finance Commission’s Jan. 22 meeting, the delinquent audit was discussed in detail. Dionne told the panel he hoped it could be filed “sometime in March” but that he “didn’t want to put a deadline on it.” But he said the state already had withheld pension fund contributions from Vero Beach the previous couple of months, and warned that the city’s critically important municipal bond rating was also in jeopardy. The Finance Commission discussion took place with City Attorney John Turner, as well as retired City Clerk Tammy Bursick, on the dais. Neither Falls nor Mayor John Cotugno were present, but the meeting was videoed and has been posted on the city’s website for anyone to watch for weeks. The January admissions by Dionne to the City Finance Commission – and the cutting off by the state of $200,000 pension draws in December and January – would appear to raise important new questions of what Falls knew, when he knew it, and why neither he nor Mayor Cotugno filled the City Council in much earlier that the city was in trouble. Is it possible that Falls was “flabbergasted” weeks later when Vero Beach 32963 contacted him on Feb. 11 after covering a meeting of the Joint Legislative Auditing Committee? Is it possible that Falls had been kept in the dark on the magnitude of the problem for weeks if not months by Dionne, as the city manager told the Vero council on Feb. 25 after firing Dionne and finally notifying council members? The City Finance Commission meeting on Jan. 22 is a seminal event in the saga of the unfiled audit. The audit was item 4B on the published agenda for that meeting, so it came as no surprise it was going to be discussed. At 10:56 minutes into the tape of the meeting, Finance Commission Chair Robert Jones asked Dionne for an update. “You had hoped to get it done by end of calendar year, right?” Jones asked, of the audit which originally had been due in June of 2024. “I had hoped for June and then July and then September and it just isn’t happening, and then when (assistant finance director) Hana Juman left (Nov. 18), she was really the only one working on it,” Dionne said. “I was doing other things at the time, that may or may not have been a good decision. Be that as it may, we are where we are. “We do understand the importance of this, and I just found out one of the reasons it’s important is I can’t even upload the budget for fiscal year 2024-25 into our system until I close out 2022-23. We cannot have three active fiscal years going on. Just, the database won’t handle it.” “So what’s your best judgment on when ...?” Jones asked, and Dionne looked over at his new assistant Lisa Burnham, who had just been hired 10 days earlier. “What would you think now? March maybe?” “I think so,” she replied. “Sometime during March. I don’t want to put a March 30 deadline on it but I think sometime during March. There are a large number of issues on the list. Some of them will be relatively easy. Some of them, not so much,” Dionne said. “But I think working together we can get through all of them by March. The audit firm (Cherry Bekaert) has freed up staff time in February to work with us.” Jones asked, “Does this create any issues with the State of Florida?” “Yes, we’re late in filing,” Dionne said. “They are withholding pension fund contributions that the state contributes to the city to contribute to the pension funds. So that’s on hold. I don’t believe that will jeopardize the payment in total, but those (payments) are both on hold and they are in the $200,000 each range. “Also it’s going to impact the bond rates if we don’t get this uploaded, and soon, because when we’re issuing bonds and we don’t have a financial statement posted for September 2023, it doesn’t bode well.” The city’s bond rating is of utmost importance right now as Vero Utilities attempts to finance a $340 million wastewater treatment plant at the airport and hopes for good terms on that massive bond issue. Ratepayers in Vero, Indian River Shores and the unincorporated South Barrier Island will fund that debt service over the next three decades through water-sewer bills. Finally, Jones had Dionne confirm “we do not expect a similar recurrence” with the 2023-24 audit being filed late. “No, we do not,” Dionne said. The status of the pending audit had also been discussed in detail by Dionne and commission members at the Nov. 12 Finance Commission meeting and was item 3C on that agenda. The meeting minutes show Turner and Bursick also were present at that meeting, but again neither Falls nor Cotugno were. Two weeks before that Finance Commission meeting, on Oct. 29, Cotugno had been sent an official non-compliance notice by the Florida Joint Legislative Auditing Committee, with Falls and Dionne copied. No one replied to the notice, according to JLAC records. This newspaper also submitted a public records request two weeks ago for all of Dionne’s employee performance reviews to see what incremental measures Falls may have taken as Dionne and his department, plagued by turnover, missed deadline after deadline. In the 20 months Dionne was on the job, Falls gave him one review in November 2023 at his five-month mark. Falls did not give him any subsequent reviews. The city has a two-page printed review form with space for employees to be rated as satisfactory or unsatisfactory on eight different criteria. None of the boxes next to the criteria – knowledge of duties/responsibilities, knowledge of safety procedures, quality of work, quantity of work, initiative, dependability, attitude and interaction with others – were filled in on Dionne’s five-month review. Falls checked only two blanks indicating Dionne had completed his trial period and that he recommended him for retention. Falls’ hand-written comment seemed to indicate some previous rift with finance department staff. “Steve’s positive attitude has been a breath of fresh air in the finance department. Continue working with the department heads to improve efficiency in the organization.” A space for Dionne to comment was left blank, but Dionne signed the review.