Gainesville reviews updated Florida audit with 12 findings completed 

At its 18-month review, the city of Gainesville has corrected eight audit findings from the State Auditor General’s 2022 report, with six findings remaining as partially corrected and four findings dismissed.  

The state auditor’s office submitted its Preliminary and Tentative Audit Findings on Oct. 5, giving the city 30 days to respond before preparing the findings for the Joint Legislative Audit Committee. The Gainesville City Commission received an update from staff at a Monday special meeting.  

Originally, the staff prepared a motion for the commission to ask the state auditor to move finding No. 8 from the partially corrected column. But City Attorney Daniel Nee said the state auditor’s office had already made the switch after being copied on the information concerning Monday’s meeting.  

The finding had to do with financial records of nonprofits associated with the Reichert House Youth Academy. However, since Gainesville decided to end the Reichert House program in May, all four items concerning the program have moved to the “no reason to correct” column while one sits in the corrected column.  

“Management has worked diligently to address these items over the last 18 months, and it is reflected in this report,” said Brecka Anderson, interim city auditor.  

The follow-up findings will be reported to the Joint Legislative Audit Committee in the near future. Mayor Harvey Ward said he was proud of the work that had gone into correcting and making progress of the findings.  

“I am hopeful that, when I appear again before JLAC to represent the City later this month, they will see that we are invested in fully addressing all audit findings,” Ward said in a statement.  

State Rep. Chuck Clemons, R-Newberry, asked for the initial audit along with state Sen. Keith Perry, R-Gainesville. Over the weekend, he said the state will continue watching to make sure similar financial missteps don’t happen.  

“I trust they will learn from this and begin to understand the value of the taxpayer’s money,” Clemons said. 

The original 18 findings led to a harsh review by the Joint Legislative Audit Committee in February 2023 and served as impetus for the newly seated Gainesville Regional Utilities Authority.  

The six items that remain partially corrected are: 

Gainesville Regional Utilities’ debt levels 

• The follow-up report notes GRU’s plan to reduce debt by $315 million over the next decade. However, the report highlights that the debt reduction plan doesn’t account for the costs associated with the utility’s integrated resource plan or the capital improvement plan—which could cost over $1 billion according to the report. 
• In that debt reduction plan, $76 million is slated to come from additional reserves created by rate increases over the next several years—part of the City Commission’s planned seven years of base rate increases. But, the GRU Authority now controls rates for the utility, and at its first meeting, member James Coats said anyone who wants to continue raising rates should resign. None of the other members commented on rates moving forward.  

Internal ability to prepare financial statements 

• The state auditors said staff turnover has made internal financial reports difficult to prepare. In the follow-up report, the state said the problem persists and recommended “the City enhance its efforts to hire, train, develop, and retain staff with the knowledge and capability required to produce [General Accepted Accounting Principal] financial statements.” 
• Gainesville’s Finance Director Sue Wang said she disagreed with the follow-up status for the item remaining only partially corrected. “We believe that the city has fully complied with this recommendation. Since I came on board in June of 2022, we made a series of new hires—and those are credentialed new hires.” 
• Wang said the city would be able to produce the financial documents in accordance with the requirements moving forward.  

Budget management 

• The state said that budget reviews continue to portray a functional instead of departmental level overviews as of the 2021-2022 reports. The state also noted the lack of budget-to-actual comparison reports being presented to the City Commission—currently scheduled on a quarterly basis. Without these reports, the state said, “the City Commission and the public lack the information necessary to gain an appropriate understanding of the City’s financial status.” 

Employee background screenings 

• The city updated its procedures and now requires the city attorney to review all background checks deemed unfavorable. Though the audit update noted that the city has not yet defined what is an unfavorable background check.  
• The follow-up audit recommended that the city continue the practice of conducting background checks every five years for staff in “executive-level positions, in positions of trust, and who work with vulnerable populations.” 

Selection of debt professionals 

• The follow-up audit notes that GRU did open a competitive bid process to find a third-party municipal advisor this year. The process netted one applicant—the current municipal advisor—who was hired for the role.  
• However, the state noted that GRU did not open a competitive process to hire bond counsel, sticking with the same firm it has worked with over the past few years. The city attorney, the report says, explained that benefits come with using the same bond counsel when a company has a debt portfolio as large and complex as GRU’s. 
• The state recommends opening a competitive bidding process for both positions in the future and conducting evaluations on the service being received by the current consultant.  

Use of purchasing cads—separations 

• In the original report, the state auditor said the city needed to cancel staff purchasing cards as soon as that cardholder left employment with the city. The follow-up report shows a reduction in the number of days between the employee leaving and the card being canceled.  
• The city said it had suspended cards as soon as employees left—rendering the cards useless—and canceled the cards later, but the state auditor noted that no official documentation records the suspension of the purchase cards.  
• The report recommends city documentation record both the suspension and cancellation of the purchase cards to reduce risk to the city.  

Read Mainstreet’s original coverage of the 18 audit findings from January 2022.