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Details of audit provide fuel for dispute

The auditor of the Safety Harbor Chamber of Commerce's finances outlines a number of problem areas.

By EILEEN SCHULTE
Published December 24, 2005

SAFETY HARBOR - The Safety Harbor Chamber of Commerce has made improvements but has not handled cash and checks as carefully as it should have, a controversial audit of the chamber says.

The financial report has been at the center of a monthlong dispute between two members of the City Commission and the chamber, which has refused to release it.

After seeing a copy of the audit obtained by the Times this week, Commissioners Kara Bauer and Andy Steingold said it raises questions about the chamber's finances.

"The whole thing is a sorry state of affairs," Bauer said.

"It is very embarrassing for the chamber and could be for the city," she said. "And we continue to fund these guys?"

When he saw the two-page audit report, Steingold said "it appears that the chamber is not a healthy financial organization."

Still, Steingold, who is running for re-election in March, said he saw no insurmountable challenges.

"There are a lot of problems and difficulties," he said. "The good news is that these problems can be fixed. Once these problems are fixed and safeguards are in place, I will support the chamber."

The dispute resurfaced during a commission meeting on Monday. City Commissioner Keith Zayac was not at the meeting on Monday and has not yet seen the review, but he did attend the November meeting where the Community Redevelopment Agency budget was discussed and the dispute between the two commissioners and the chamber arose.

He said he's not sure why the chamber's executive board won't release the report.

"If there are issues at the chamber, they should be resolved, especially if city money is helping fund it," Zayac said. "(The commission) needs to use tax dollars wisely."

Commissioner Nadine Nickeson declined to comment. Mayor Pam Corbino could not be reached for comment.

Chamber president and chief executive Cyndi O'Donnell defended the chamber's practices and characterized any problems that the audit described as minor.

"This is by far the best (audit) we've ever had," she said, adding the review was performed during her first year as chamber head.

The review, which was completed on June 6, was performed by Bud Llewellyn, a retired East Lake resident whose church belongs to the chamber. He analyzed the chamber's cash handling system, invoice and sales receipt processing and checking account maintenance for the fiscal year ending Sept. 30, 2004.

In his report to the chamber, Llewellyn outlined six "shortfalls in the recordkeeping and deviations in good operating procedures."

The audit showed voided checks that did not have signature lines removed; statements from the chamber's credit card processor that did not appear to have been audited or approved; invoices, including one for $6,600, paid without approval; no board member approval for some expenses incurred by O'Donnell; and no receipts from two of those purchases.

The petty cash log showed few receipts for the more than a dozen withdrawals, and there were lost invoices, including one for more than $4,000.

Llewellyn wrote that the problems he found were due in part to a new staff and new accounting software.

But the news wasn't all bad. Llewellyn noted that "much improvement" was made in the last six months of the accounting year. During the review, he wrote, staff designed a new sales log that will help identify and track cash receipts.

The dispute first emerged during that Community Redevelopment Agency budget meeting in November. Steingold and Bauer asked to see the chamber's annual audit, saying they want to know how the chamber spends about $51,000 in funds provided by the city.

The chamber refused.

Despite requests from City Manager Wayne Logan and City Attorney Alan Zimmet, the chamber has stood its ground, saying the commission did not have a right to examine it even though the city is a member of the chamber.

Tensions boiled over during a commission meeting on Monday. While Steingold grilled O'Donnell about the report, her husband shouted a vulgarity from the audience.

Among other things, Llewellyn's review showed:

56 voided checks. Of those checks found during the audit, only two had the signature lines removed, a practice Llewellyn said was "highly recommended" in previous reviews. He recommended that all voided checks should have the signature section removed and stapled to the check, and all voided checks should be filed in the same folder.

Monthly statements from the chamber's credit card processor did not appear to have been audited or approved by anyone. Llewellyn said this monthly statement should be reviewed for accuracy.

A random sampling of 584 checks written during the fiscal year revealed 30 invoices paid without approval. They included Bonefish Grill for $1,097.78, Skipper's Smokehouse for $6,600, and Proper Connection for $1,467.30. Llewellyn recommended that board members authorized to sign checks should be instructed to require an approved invoice for all checks written.

Some of O'Donnell's expenses were paid without board member approval.

The petty cash log revealed 15 disbursements and only four receipts. Llewellyn said these disbursements should be documented with a receipt from the vendor.

Invoices could not be found for seven checks paid to vendors. They included checks to Event Production for $800; Countryside Country Club for $4,463.81; Silas Beach for $2,438; and Premier Beverage Company for $1,710.

O'Donnell said she was willing to talk about the review with a reporter because its contents had become publicly known.

About the 56 voided checks, she said, "The checks are printed on a laser printer, and maybe there could have been a problem with the printer.

"Also, it could be maybe something gets lost in the mail." Regarding the checks that were paid without proper approval, O'Donnell said "a board member might get talking and forget to sign the check."

And there is a simple explanation for the missing petty cash receipts.

"Maybe I went and bought pizza and put the receipt in my pocket and forgot it," O'Donnell said, adding the chamber keeps under $100 in petty cash.

She attributed losing the invoices to honest mistakes.

"Out of 300-some-odd days of the year, seven invoices missing is not a high rate of lost invoices," she said.

[Last modified December 24, 2005, 01:38:01]