Broward school auditors' reports don't always win them friends

But their work has saved millions for taxpayers, superintendent says

By Paula McMahon and Akilah Johnson South Florida Sun-Sentinel
5:00 PM EDT, August 9, 2009

FORT LAUDERDALE - At the nation's sixth largest school district, auditing how the money is spent by co-workers and elected officials isn't always the best way to make friends.

But in the last six weeks, relations between the Broward School District's auditors, the construction department, and some board members have become more contentious than ever, officials say.

"This is a bad clash, I think it's the worst so far," said Charlotte Greenbarg, a 10-year member of the district's audit committee, which is composed of citizens appointed by school board members to review audits.

The bad feelings flared when internal auditors reported that the district had been ripped off for at least $765,608 by two contractors.

The auditors accused the contractors, including AshBritt Inc. of Pompano Beach, of doing unnecessary work and inflating bills for repairs to portable classrooms damaged by Hurricane Wilma.

But what really riled some school district employees and board members was the auditors' finding that "there were clear signs of coercion and falsified documentation" to secure approvals of bills and payment to the contractors.

Michael Garretson, the district's deputy superintendent of facilities and construction management, accused the auditors of "editorializing" that was tantamount to "slander."

For the auditors, who work in offices in Sunrise piled high with stacks of documents and binders filled with financial records, it wasn't the first district audit that met with negative reactions. But Greenbarg said the reaction was more heated than she'd seen.

The official mission of the 23-member auditing department: to examine everything that could cost the district money, and recommend ways to save taxpayer dollars and boost efficiency.

"We've been doing it for 11 1/2 years [and] we've got unpopular audits, but a lot of them have done good things," District Chief Auditor Patrick Reilly said. "We're always trying to improve the system. We're trying to basically help the district improve operations."

Reilly, a certified public accountant who is paid a yearly salary of about $116,000, said he and his staff strive to keep personalities out of their findings and stick to documented evidence. Their job is to help the district and taxpayers, he said, but also to discourage waste or fraud.

It's vital, he said, that auditors maintain their independence and "make sure things, if they need to get reported, get reported."

With an annual budget of $1.1 million, the auditors estimate they save the district at least $1 million per year, but say there are additional savings that are not factored into those numbers.

Their work serves as a deterrent to thieves or spendthrifts, the auditors say. Plus, the district saves a significant amount by having its own financial investigators rich in insider knowledge, rather than needing to bring in outside private firms, they say.

It's not a job for the faint of heart, say those who do it. Internal auditors, particularly those in public service, are often put in the difficult position of pointing out errors and raising concerns about fraud or other crimes, said Richard Chambers, president of The Institute of Internal Auditors and a former deputy inspector general of the U.S. Postal Service.

Moreover, they often earn less than their peers in private practice and can face more resistance„© because their recommendations and findings often garner more public attention than occurs in the private sector, he said.

"The response tends to be often 'shoot the messenger,'ƒ|" Chambers said.

In their latest report, the school auditors recommended district officials demand a refund from AshBritt Inc., and that the issues raised in the audit be referred to the Federal Emergency Management Agency, the Internal Revenue Service, and state authorities for investigation.

Controversy over the findings led some school board members to advise delaying the release of future audits and drafts, until other school employees have the opportunity to respond. And at least one audit committee member questioned whether it was appropriate for auditors to make such accusations.

In an interview, Garretson said he knows his department will get plenty of scrutiny, since until recently, it was responsible for spending more than half of the district's $5-billion yearly budget. But he accused the author of the latest audit, Dave Rhodes, of having a "personal dislike for me" and being an "arrogant bully."

"Their job is to be tough and I've never objected to the real findings, I've only objected to the editorializing," Garretson said. The auditors, he said, acted like Monday morning quarterbacks by second-guessing the difficult work he and his staff accomplished in the wake of Hurricane Wilma in 2005.

Superintendent James Notter has been trying to defuse the tension, and said he plans to have the audit reviewed by a school district lawyer. No resolution has been reached yet.

However, Notter called himself a strong advocate of the internal auditors, and said their work has saved taxpayers millions of dollars and vastly improved the district's functioning. For example, he said, the same year Wilma struck, an audit of the district's workers' compensation program uncovered waste and lack of oversight that had cost taxpayers at least $600,000 per year. An earlier audit uncovered severe problems with mold and air quality in schools.

Thanks to such detective work by the school district's internal auditors, Notter said, "we went from media buffoons, to be honest, [to setting] a national standard."

Paula McMahon can be reached at pmcmahon@SunSentinel.com or 954-356-4533.