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Home » Money » Port Everglades scandal: No control over employee spending sprees, audit says

Port Everglades scandal: No control over employee spending sprees, audit says

PortandTerminal.com, November 28, 2019

FORT LAUDERDALE, FLAn explosive article published yesterday in the South Florida Sun-Sentinel has painted a damning picture of non-existent spending oversight and corruption at Florida’s Port Everglades.

The article quotes Broward County auditors who say that “Port Everglades’ purchasing, operating and finances have been grossly mismanaged in recent years”

It also reports that public works employees at the world’s third busiest cruise port used county-issued purchasing cards to spend millions of dollars on items that there’s no proof the port ever received, according to auditors it has spoken with. In addition, port managers never emphasized obtaining the best — or even reasonable — prices when buying goods, auditors said.

Among the findings in the audit released this week:

  • More than 7,000 purchases totaling approximately $5 million using the county cards, called P-Cards, could not be verified as having been received. Auditors said “significant parts and supplies could have been misappropriated without detection.”
  • No comprehensive inventory system exists, auditors said. The ordered parts do not go into a central receiving system and are not tracked. Besides the potential for the goods to be misappropriated, it’s also likely port employees unnecessarily bought parts that were already on hand.
  • Approximately 2.5 million gallons of untested and uncertified vessel wastewater was dumped into the port’s sewer system without determining if it met allowable limits set for sanitary wastewater by Fort Lauderdale and the George T. Lohmeyer Wastewater Plant.

Auditors began their inquiry after a whistleblower alerted officials to potential wrongdoing at the county-owned port in 2018. The resulting audits — and investigations by the Federal Bureau of Investigations and the Broward Sheriff’s Office — have uncovered employees using equipment, supplies and materials for their own purposes, or making a profit because of inventory controls that were nonexistent when the audit started.

In a separate article the Sun-Sentinel published in February, it was reported that the whistleblower was forced to file a suit against the county on Feb. 14. He claimed he suffered “workplace retaliation, harassment, threats and other consequences” for his role in bringing illegal practices to light. The reaction made it impossible for him to continue working there, the suit said.

Criminal investigations and arrests

Criminal investigations so far have led to the arrests of five individuals who worked for or did business with the port, and their subsequent guilty pleas. The five have received federal sentences ranging from three months to 21 months in prison and have been ordered to pay restitution totaling more than $400,000.

The five each pleaded guilty to a felony charge of conspiring to commit fraud with programs receiving federal funds. The port receives taxpayer-supported federal grants and subsidies and other federal assistance.

The audit calls for the county to cooperate with law enforcement on any continuing criminal investigations at the port.

County and port officials said they agree with most of the audit’s suggestions for improvement, and many have already been implemented. More than 30 P-Cards issued to workers were suspended in 2018.

Port Everglades Executive Director Glenn Wiltshire

In a prepared statement, Port Everglades Executive Director Glenn Wiltshire said port officials recognized in 2017 “inefficiencies in how the port’s facilities were maintained” lead to the spending scandal and hired a consultant to help revamp its preventative and capital maintenance programs and develop new inventory control and work order procedures. A new system is in place to better track supplies and reduce costs that includes a new central warehouse to improve inventory control, the statement said.

It added that the next step, “already underway,” is the development of software to track inventory functions.

“While we are disappointed in the few individuals who took advantage of the system and engaged in criminal activity or didn’t follow established policies and procedures, we continue to advance initiatives to ensure continued success that benefits Broward County residents, our customers and those who work here,” Wiltshire said.

County Administrator Bertha Henry’s written response to the audit said “many of the deficiencies uncovered were the result of actions and inactions of individuals who colluded to circumvent existing controls. The main individuals who were identified as engaging in inappropriate and fraudulent activities are no longer working for the County and have been prosecuted.”

She blamed the Port Everglades spending scandal on a lack of automation for the internal control deficiencies uncovered by auditors.

“These systems, most notably the inventory and work order system, are in the process of being automated which is being rolled out in December 2019,” Henry wrote.

Some things, such as shortfalls in how public works was organized at the port and the need for a consolidated storage facility, were already identified by the county prior to the audit, Henry wrote.

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