What, exactly, were the 26 City of Vero Beach Finance Department employees doing while state deadlines to file the city’s 2022-23 audit flew by, causing a loss of state revenue, the holding back of pension funds and leaving more than $32 million in grants in limbo?
There has, to this point, been no explanation for why the audit – previously completed and filed annually with no apparent problem – was not completed on time a year ago, and still has not been finished.
But one thing that now seems apparent is that national accounting firm Cherry Bekaert – which has long helped Vero Beach produce this audit each year – was not missing in action this past year when the audit was not filed.
In fact, records show the city paid nearly $82,000 to Cherry Bekaert – more than double the $38,000 Vero Beach had budgeted – for its audit assistance between September 2023 and June 2024, an overage that one might have thought would have sent alarm bells ringing at City Hall.
A 100 percent overrun and the audit wasn’t even finished. What was going on here?
Yet, City Manager Monte Falls maintained he was “flabbergasted” in mid-February when state regulators imposed stiff penalties on Vero for not filing its still uncompleted FY 2022-23 audit, a violation of Florida Statutes.
The final total for Cherry Bekaert’s FY2022-23 auditing services, including consultants brought in that are currently helping Vero finish the job, is unknown.
But why is this total going to be so much more than what was budgeted, and so much more than previous years?
A review of more than 1,200 emails between City of Vero Beach finance staff and Cherry Bekaert showed four auditors from Cherry Bekaert were working on the audit starting in April 2024.
Auditors used a “project tracker” and the audit team met in-person or virtually every two weeks, with Cherry Bekaert providing city staff with punch lists of pending and top-priority action items, plus next steps.
A May 10, 2024, email exchange between Senior Associate Crystal Ruiz and the city’s Hana Juman, at that time Vero’s assistant finance director, provides a typical bullet-point list of items, including the fiscal year 2023 “Rollforward, plus a list of 2023 debt payments, new debts, debts paid off and new leases, plus the capital asset detail for the 2022-23 fiscal year.”
Emails showed gentle nudges from Cherry Bekaert Director Jeff Zeichner and the other Cherry Bekaert auditors, such as one email on May 23, 2024, asking for some reports. “If you have someone who can run these we could make selections and make a lot of progress,” Zeichner said to Juman.
In May 2024, Cherry Bekaert billed Vero $52,959 for its FY2022-23 audit work through that point, and another invoice for $28,731 showed up in late June. No audit invoices have been received since.
But had the major variance between the $81,690 billed and the $38,000 budgeted been noted then – and brought to the City Council’s attention days before Vero missed the FY2022-23 audit decline – the current crisis might have been avoided.
At the very least, no one would have been able to have claimed to have been “flabbergasted” the following February.
After the June 30 deadline passed, and the state offered an extension until Sept. 30, audit team meetings shifted to once a week, and a Cherry Bekaert auditor sometimes worked from City Hall.
“I’m starting to wind it down. I didn’t see you in your office so I tossed the visitor badge on your chair. I wanted to make sure I didn’t cause another international incident with you and HR,” Zeichner emailed Juman at 4:53 p.m. on Friday, July 26. “Don’t hesitate to reach out next week if you have any questions as you work through the list.”
Auditors often gave finance staff visual examples of what the requested information should look like as they were hunting down documents. Auditors also showed staff how reports needed to be formatted.
Meantime, Finance Department staff got pulled away from the audit by Falls and department heads to focus on other priorities, and they sometimes rescheduled audit team meetings.
“Hi all, is it possible for us to reschedule our 11 a.m. meeting tomorrow for next week? Steve (Dionne, the finance director) and I are both slammed with budget and unfortunately have little to report at this time,” Juman wrote on Aug. 7, 2024.
If there were any urgent pleas from auditors for Vero staff to shift into turbo gear to avoid further noncompliance with state law, those discussions apparently took place in person or via Microsoft Teams video meetings.
During this period, other Cherry Bekaert auditors were also helping the City of Vero comply with a new accounting rule called GASB-96.
The Government Accounting Standards Board or GASB is a national entity which tells state and local governments how to conduct their business, tweaking rules to adapt to advances in technology.
After 2022, the City of Vero Beach, along with every Florida municipality, county and state entity, had to implement the new GASB-96 rule to better track software licensing and digital subscriptions.
Invoices from Cherry Bekaert show it took city finance staff nine months to implement GASB-96 wrapping up that work in May 2024. The accounting firm billed Vero another $25,719 for its help with GASB-96.
