The Florida Auditor General has issued a sweeping critique of Okaloosa County commissioners’ oversight of the Tourist Development Council and the county’s use of bed tax money.
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The analysis contains 25 key findings in 11 areas that range from oversight and fraud prevention to travel expenses, conflicts of interest and improper use of bed tax revenue.
“They’ve been very thorough,” County Administrator Jim Curry said. “The findings they’ve provided are going to be very, very important as we continue to try to refine our processes. Fortunately, most of the recommendations they’ve made the board has been working hard to implement.”
The county has 30 days to respond to the audit’s recommendations and submit a set of corrective actions to the state. Curry said he plans to present that list to county commissioners Jan. 8.
The preliminary report, which was released late Tuesday, comes seven months after the Auditor General began its operational audit.
Sheriff Larry Ashley requested the audit after county officials discovered a fraud scheme put in place by former tourism head Mark Bellinger.
Bellinger died May 4 from a drug overdose after it was discovered he had bought a $710,000 yacht with bed tax money. His illegal and unauthorized purchases also included a $740,000 home in Destin, a $48,000 Porsche, customized motorcycles and a building lease.
Ashley said he was pleased with the report and praised the Auditor General’s professionalism.
“I’m pleased it was released before the end of the year,” he said Wednesday. “It seems like a good portion of the AGO’s recommendations have already been adopted.”
Ashley said the report will benefit his agency, which is investigating the Bellinger fraud scheme along with the state attorney’s office.
State Attorney Bill Eddins has assigned his top assistant, Russ Edgar, to head an investigation he said has already begun.
“We are partners with (the Sheriff’s Office) in this investigation,” Eddins said. “They’re working with us in gathering information and interviewing witnesses.”
Ashley said the probe is tedious and will require numerous interviews well into 2013.
The bulk of the Auditor General’s findings relate to county spending — specifically expenditures made with bed tax money or BP oil spill grants — from May 2010 to May 2012.
The AGO found that the county:
Entered into contracts that didn’t effectively protect the county’s interests;
Did not ensure that goods and services acquired through its two advertising firms were competitively procured; and
Paid for certain goods and services in advance of their receipt, contrary to state law.
According to the report, the county paid its two advertising firms, Lewis Communications and the Zimmerman Agency, a total of $12.1 million “without obtaining adequate documentation supporting the goods and services received.” Many invoices included incorrect or inadequate explanations of the goods and services being purchased.
Among those was a $47,000 invoice described as “convention center marketing services” that actually included the cost of a lavish county Christmas party, a TDC holiday party and a harbor cruise for employees.
Other purchases made with the $47,000 included:
$5,000 donated to a local charity at Bellinger’s request;
$576 on a floral arrangement at the county visitor’s center; and
$640 on cake pops as part of a welcome package for visitors at a local chamber of commerce luncheon.
The report found that Bellinger had spent $31,400 on furniture for the TDC office at HarborWalk Village in Destin, but disguised the invoice as “Harbor Walk/Destin Harbor Advertising.” Three pieces of the furniture, which were worth $6,250, were found at Bellinger’s home in Destin.
The Auditor General documented that Bellinger offered Vision Airlines a $1.1 million marketing incentive, but did not enter into a contract with the company.
“Mark didn’t structure any type of agreement outlining how those dollars were going to be spent,” Curry said. “I think we’re going to find a lot of those things.”
The report also scrutinized a debit card promotion funded with $1.4 million in BP oil spill money.
Bellinger was authorized to distribute $1 million in debit cards, each worth $200, to visitors staying at preapproved lodging facilities.
But Bellinger issued 1,000 of the debit cards, totaling $200,000, to Vision Airlines without an agreement detailing how the money would be used, according to the report.
“It’s my understanding that Bellinger met with Vision Airlines and offered to them the 1,000 cards and … I don’t know that anybody knows (why),” Curry said. “ … You assume it was for promotional purposes, but he didn’t do any agreement with them.”
The report also found that:
Forty-six of the debit cards were used by Bellinger and other individuals for a variety of things, including furniture, lodging, food, tips, entertainment, alcoholic beverages, gas, sales taxes and other unspecified items. Those purchases totaled $6,330.
One debit card was found to have been used as a prize in a local golf tournament.
The Auditor General’s report also examined the role of the TDC during Bellinger’s tenure.
It found that the TDC and its subcommittees operated outside its advisory duties and failed to review all expenditures of bed tax money. The report described the TDC’s actions as “contrary to law.”
County commissioners tackled that issue in the two weeks following Bellinger’s death. The board enacted new policies that dramatically curb the authority of the TDC and its members.
“The message has been sent loud and clear,” Curry said. “At the end of the day, they really don’t have any authority over those dollars other than to provide the board with recommendations.”