Lazaro Aleman
ECB Publishing, Inc.
County commissioners have referred yet another financial matter involving the Clerk of Court Office to the Florida Department of Law Enforcement (FDLE) for investigation.
The latest issue came to light as part of the audit report for the fiscal year ending Sept. 30, 2021. The auditor noted the expenditure of some $85,000 to provide family health insurance coverage to Clerk of Court Kirk Reams’ employees, without the commission’s knowledge or its budget being reimbursed the money.
The audit’s finding on the health insurance expenditure was one of five deficiencies cited by the auditor relative to clerk office’s financial reporting, i.e., internal control, in the portion of the report dealing with Reams’ budget.
The other deficiencies cited included the clerk’s use of a county-issued purchasing card for travel expenses absent “adequate documentation to support the public purpose served;” the clerk’s office issuing numerous checks to various nonprofit organizations for sponsorships and advertising absent documentation to support how the public was served by the expenditures; and the submittal of a budget that was not completed correctly per the appropriate submission rules and that included expenses for an independent contractor listed as a paid employee with benefits. All of which matters were earlier referred to the FDLE for investigation.
The deficiency involving the $85,000 charged to the commission to provide the clerk’s employees with family health insurance coverage renewed board attention on the clerk’s operation.
The auditor’s comments noted that the county has historically paid only the basic health insurance coverage for employees and left it to employees to pay for the family coverage and other extras. At least it did until the current fiscal year, when the county changed its policy and now pays a portion of employees’ family coverage.
In the case of the clerk’s office, however, the cost of family coverage insurance had not been deducted from employees’ paychecks for several years, including for the clerk and an independent contractor working for the office, according to the report.
The clerk’s office, moreover, according to the audit report, did not reimburse the commission for the cost of the family coverage. Bottom line, according to the audit, the commission had incurred $85,000 in health insurance expenditures for the clerk’s employees’ family coverage, a benefit then not provided to other county employees.
The reason for the error, per the audit report, was that the human resources (HR) person running payroll and paying the health insurance had been “directed to not subtract the cost of family coverage from any employees working for the clerk.”
Auditor Chris Moran, whose firm of Moran and Smith conducted the audit, noted that as a constitutional officer, Reams was within his authority to set salaries and policies for his office. He further called the clerk’s a unique and complicated office, unlike any of the other constitutional offices, “simply because he doesn’t have a separate set of books; he’s just a fund within the board’s books. He’s a 17 fund.”
“The other constitutional officers do their own payrolls,” Moran said. “So they are writing checks. With the clerk’s office, they run payroll through the payroll fund and then the HR director pulls the cash out of everybody that had payroll that month. And they charge the clerk’s office through an ACH (Automated Clearing House – a financial network used for electronic payments and money transfers) out of his own personal checking account, but it’s not like people are writing checks back and forth.”
That said, Moran said that after reviewing the ACHs and adding them up, “it wasn’t obvious that the clerk had been reimbursing the board for the health insurance.” He further noted that the $85,000 was a best guess, as he hadn’t conducted a forensic audit.
Commissioner Betsy Barfield wanted to know how long the practice might have been going on?
“It appears at least the last three years,” Moran said. “But I don’t know how long the reimbursement checks have not gone over. I didn’t go back and look at that. But I’m sure somebody will.”
Commissioner Stephen Walker wanted to know what Moran thought the remedy should be? Moran, however, skirted the issue.
“I don’t know what to say,” he said, adding that two years earlier, the clerk had had a payback of $60,000 that would have covered the health insurance costs, except that the board had told him that he could keep the money for his next year’s use.
Barfield didn’t let the statement go unchallenged.
“We didn’t know then that he was taking that money,” she said. “Had we seen it in the check register, had we had any idea that this was going on, I doubt that we would have approved anything like that. It’s just wrong.”
Moran said he wasn’t arguing the point.
“It clearly affected the board of county commissioners,” he said of the $85,000. “You do have a budget for health insurance on the board’s side, but that budget wasn’t all that accurate and I don’t think the board of commissioners knew they were paying for his family coverage. Apparently no one did.”
It was Barfield’s recommendation that the matter be referred to the FDLE for investigation.
“That’s what we should do,” she said. “$85,000 is a lot of money. It’s just wrong on multiple levels.”
Walker agreed.
“I think for it to be cleared up it needs to be looked at,” he said. “I don’t see how it would hurt. That would clear everybody. Because if we don’t do that, there are going to be assumptions, and the best way to get rid of assumptions is to have them looked into? If nothing was improperly done, it will be cleared. And if something improperly was done, then it goes that way.”
Polled individually, the board members all agreed that the matter should be referred to the FDLE for investigation.
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