Final Audit Report of Monroe County Contract with Stand up for Animals, Inc
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FINAL AUDIT REPORT OF MONROE COUNTY CONTRACT WITH STAND UP FOR ANIMALS, INC.
STAND UP FOR ANIMALS RESPONSE
I. OBJECTIVES AND SCOPE:
SUFA Response: A review of communications between Monroe County staff indicates that the audit may have been conducted with a predetermined focus on Stand Up for Animals, Inc., (Exhibit A - email exchange between C. Cyr and B. Leto, email exchange between Wigington and Hutton) and the assets of the corporation (Exhibit B – email exchange between Wigington, Hutton and Gastesi, email exchange between Neugent, Hutton)
Florida State Statute 119.0713 (3) mandates that audit reports prepared by internal auditors remain confidential until the final report is issued. A letter dated 9-22-10 from auditor Sandy Mathena indicates that the audit report is not final (Exhibit C-letter from Mathena to Gottwald). Thus, the actions of County Administrator Roman Gastesi appear to violate this statute (Exhibit D - communication from Gastesi to B. Becker, US 1 Radio with preliminary audit response). This resulted not only in irreparable harm to the reputation and finances of the corporation, but also to premature conjecture of Monroe County commissioners to the public (Exhibit D2- Facebook posting re: SUFA by Neugent). The release of this information during contract negotiations also likely led to the loss of the contract (Exhibit D3, Barometer Article). Additionally, information regarding the audit was exchanged between the auditor and Public Works Department while ongoing contract negotiations occurred (Exhibit E – email exchange between Leto and Mathena).
The auditor reported to SUFA that she had completed her audits of the FKSPCA and HACC in a one-week period. The audit of SUFA was conducted over an eight-week period and with far more scope and span. The audit findings reveal a pattern of discrimination by Monroe County between contractors. Of particular note is that the auditor and county reported no objections or suggested any claims on additional adoption fees charged by the FKSPCA.
The auditors strayed well beyond the contract requirements in trying to determine what expenditures were "for a valid public purpose". SUFA is an independent contractor who provided a service to the County. The contract is a service agreement. The auditors performed this audit as if SUFA is a county agency and subject to the standards of the county’s spending requirements and approval. This is not the case with SUFA and the determination of the validity and appropriateness of any expense lies with the management of SUFA which is required to adhere to the not for profit stated purpose.
The County acted beyond its authority and disclosed audit results prematurely for what appears to be its own financial gain. These findings suggest that the audit was not objective in its purpose.
II. METHODOLOGY:
SUFA Response: In Sec. II, the auditor states she interviewed SUFA Executive Director Linda Gottwald and SUFA accountant Linda Kruszka of L and L Financial Management. There were no scheduled interviews with either Gottwald or Kruszka. Gottwald offered to meet with auditor in Florida. Mathena declined, stating she was busy preparing for her son's wedding and that it was not important that she speak with Gottwald. When Gottwald requested a telephonic interview with a witness present, Mathena cancelled the interview and did not reschedule it (Exhibit F-email exchange between Gottwald, Mathena). The only communications the Director had with the auditor were limited to brief requests for documents and logistical aspects of the audit. Kruszka also was never directly interviewed. Several of the findings reached by the auditor were erroneous (Exhibits P, T-Z3). These findings could have been corrected had she directly interviewed either Gottwald or Kruszka,
The audit references statements made by SUFA employees. Auditor interviewed employee Katherine Bentley, President of Safe Harbor Animal Rescue of the Keys (Exhibit G-Safe Harbor Corporate Registration). Bentley had indicated her intent to bid on the contract. Leto assured Bentley anonymity if she provided information to the County re:SUFA. Leto then sent information regarding Bentley to the FKSPCA (Exhibit H- email exchanges between Leto, Bentley). Bentley also indicated to the County Administrator that she wanted Gottwald to leave Monroe County and that she would like to be considered as manager of the Marathon Animal Shelter (Exhibit I - communication from Bentley to R. Gastesi). Auditors relayed information provided by Bentley without disclosure of a possible conflict of interest that may have influenced Bentley's statements.
The auditor also attempted to prompt comments in interviews. SUFA Board member Peter Meyers stated Mathena asked him if he “ thought the director’s salary was too high?” Mathena also asked employees if they were aware of the large amount of money in SUFA’s First State Money Market account.
Mathena attempted to remove original documents on two occasions from the office of L&L Management. In the second incident, she attempted to do so while Kruszka was not in the office and questioned her assistant, Lula Vorick (Exhibit J - Affidavit of Kruszka). Although the auditors had been asked to schedule appointments, they frequently did not do so. On one occasion, Kruszka was detained in her office until 7 p.m. to accommodate their requests. Many of the requests posed in the audit were redundant or impractical (Exhibit J1, Auditor list of questions 14, 15- receipts for items not purchased on Thursdays). This resulted in unnecessary costs of time and money to both parties.
On p. 3, the auditor reported that the director “asked the auditor if the contract provided funding for spaying and neutering.” This is not true. On the same page, the auditor states she discussed segregating funds with both the director and the accountant. Segregation of funds was not discussed with either the Director or the accountant.
The auditor also stated "The Director of SUFA questioned if an internal audit and independent audit were still needed to be completed if they no longer contracted for services.” This statement is not accurate. The Director asked if there would still be a need for an external audit if the internal audit covered the same time frame and material.
The auditor alleged multiple instances of misspending by SUFA throughout the report. She did not, however, report evidence that remuneration had been made for multiple expenses prior to the audit. (Exhibit J2 - 2007 reimbursement check #1184 from Director to SUFA).
The auditor denied requests for additional time to complete the response to the audit. The audit extended over an eight week period. SUFA was given less than three weeks to respond. The County failed to comply in a timely manner with a Public Records request as per F.S.S. 119 which was integral to the response. Prior to receiving SUFA’s response, the County then released the audit to the media in violation of F.S.S. 119.073. IV. AUDIT FINDINGS
SUFA Response: Throughout the audit, the auditor cites purchases as being ineligible for county funds. This is a service contract. Nowhere in the contract does it list what expenses are considered ineligible for County funds. Nowhere in the contract does it state the County has the right to dictate to the public how their donations to SUFA will be spent. The FKSPCA has made numerous purchases, including a house on which monthly mortgage payments are made, without county approval or objection (Exhibit K). By allowing other contractors to enjoy unfettered purchases while initiating litigation against SUFA for select purchases, the County is discriminating between contractors. This is in violation of County Contract Sec. XVIII.
1. Accountant furnishes some documents requested in final demand letter dated Aug. 30, 2010. SUFA Response: The Corporation’s records are maintained by accountant Linda Kruszka in accordance with generally accepted accounting principles. Kruszka and SUFA allowed auditors complete unfettered access to all available documents. Many transactions noted by the auditor were electronic. The credit card statements served as the documentation for many of these expenses. Explanations of charges on the credit cards were provided to the auditors. The auditors are not required to determine if expenditures were for “a valid public purpose”. It is SUFA management’s duty to determine if an expenditure is valid for the organization’s not for profit purpose. The county contract is a services rendered document. Monroe County is not charged with determining if an expense is valid for the organization.
2. Adoption fees in addition to approved Board of County Commission fees are being charged by SUFA without County approval in violation of Section III. (C)of the contract.
SUFA Response: SUFA is offsetting the cost of adoption. The subject charages are for the preparatory costs of an adoption, they were included with the county and license fees for ease of administration, and the County was advised that SUFA (like other shelters was charging to offset the cost of adoption. SUFA currently charges $110 for the adoption of a dog and $45 for the adoption of a cat. A breakdown with estimated allocated costs is as follows: Dogs: $10 county fee Cats :$10 county fee $10 license $10 microchip $10 microchip $20 spay/neuter $50 spay/neuter $10 FVRCP vaccine $10 DHLPP vaccination $10 parasite prevention $10 parasite prevention $10 FeLeuk/FIV test $20 Heartworm /Lyme/Erlichea test Total $120 Dogs Total $75 Cats
Please note that the incurred costs are actually higher than the charges to adopters, but in an effort to keep animals affordable to the public, we do not ask for additional monies. We also offer two for one cat adoptions in an effort to place more cats. On these adoptions, we still reimburse the county for two cats. We also do not include the cost of rabies vaccinations as this is a cost reimbursed by the county annually. In 2002, SUFA initially asked people to write two checks when adopting- one for the county and one for SUFA’s cost of adoption. This was not only cumbersome, but confusing to people when we stated the adoption price was $10 plus additional charges. For clarity’s sake, we began to charge one price.
The preparatory costs are not paid by the county stipend (Exhibit L - Revenue and Expenditure spreadsheets). County approval for additional charges was in place in 2002 when SUFA assumed the contract. A former SPCA employee who was hired by SUFA during the transition of the Marathon shelter explained the charge for adoption was $10 for the county plus prep fees for the animals, which the contractor kept to recoup costs. Public Works confirmed this in July of 2002. Public Works Director Dent Pierce was again made aware of these fees in 2004 via letters from SUFA confirming the charges and explaining the additional preparatory costs. Community Service Director Jim Malloch also reviewed and approved the preparatory fees . (Exhibits M1, M2). The auditor reviewed these fees in internal audits of SUFA in 2002 and 2004. Additionally, the fees have been noted in SUFA's Operating Plan and website and the revenue has been recorded in annual audits since 2002.
The FKSPCA also charges a total adoption fee greater than the $10 county fee (Exhibits N, FKSPCA Fee Schedule) and these fees are retained as revenue (Exhibit O, FKSPCA 990). The HACC charges a fee for sterilization for animals that are adopted that were not altered previously. Both of these contractors keep these fees. The County has been aware of these fees. (Exhibit O2, email exchange between Hutton, Leto, Limbert). No County action has been taken to retrieve or correct the collection of other contractor’s additional fees.
Monroe County contract states "In recognition that the Agency is a not-for-profit organization providing shelter care for the County shelter, none of the adoption or other related preparatory fees are refundable" (Exhibit P, County Adoption Form). This indicates that the Agency (contractor) is the recipient of the adoption and preparatory fees.
Florida State Statute 823.15 (3) states "All costs of sterilization pursuant to this section shall be paid by the prospective adopter...".
The auditor concludes that there is a total of $281,529 in fees owed to the county based on service fees minus fees remitted to county. She does not consider that SUFA revenue is generated by multiple sources in addition to the recoup of preparatory fees.
All costs of preparation and sterilization of animals for adoption, with the exception of rabies inoculations, are paid for with SUFA revenue and not Monroe County stipends. The county has been aware of these fees since 2002 and made no objection. The county also allows other agencies contracting with Monroe County to collect and retain similar fees. Monroe County does not have the right to claim monies for expenses paid by SUFA in preparation of animals for adoption.
3. Fees in SUFA's First State Bank Savings Account are due Monroe County per contract Section III (C). ...Monroe County should recover additional fees charged for the Marathon and Big Pine shelters in order that these fees, donations and grants be used, as intended, for the animals at the Marathon and Big Pine shelters. SUFA Response: All monies other than the county stipend were originally deposited in this account. As noted, SUFA had separated the savings from the checking account but it became increasingly difficult to continue to provide loans to cover the monthly expenditures because the county stipend was inadequate (Exhibit Q - Personal Loan from Director to SUFA). Additionally, The First State money market account has a limited number of transactions that can occur within a one month time period without incurring additional bank fees (Exhibit Q2 – Transfers between First State and Centennial accounts). Therefore, donations and revenue checks were also placed in the checking account in order to avoid overdrafts and fees.. Regardless of co-mingling, the county has always been paid the fees due as per schedule 496- 2000 as evidenced by the biweekly receipt of deposit sheets and receipts submitted to the county and reflected in annual audits. The auditor states "Monroe County should recover additional fees charged for the Marathon and Big Pine shelters in order that these fees, donations and grants be used, as intended, for the animals at the Marathon and Big Pine shelters." The auditor is confusing grants and donations with fees.
In regard to donations, the contract states "Said donations shall be used by Contractor only for the benefit of shelter animals or animals for which contractor provides spay/neuter or other services, and shall not be used to defray or reduce County Funding in the future." This is why SUFA requested an increase in the 2010 bid (Exhibit L- Revenue and Expenditure spreadsheets).
The auditor also erroneously assumes that all donations are restricted for helping only animals at the Big Pine and Marathon shelters (Exhibit R - Letters and checks from Haight, Trostrud). It is against the intent of the donors and the language of the county contract that money donated or awarded to SUFA be turned over to Monroe County.
4. SUFA is not issuing licenses for cat adoptions in violation of Resolution No. 599-2006 SUFA Response: SUFA was told by former SPCA employees in 2002 when the contract was assumed that, because of the inherent danger of tags and collars on cats, the county did not enforce the issuance of licenses for cats. This was confirmed by Public Works (Exhibit M, letter from Pierce). In eight years, SUFA has never had a request for a cat license. SUFA instead microchips cats and kittens. The County has received monthly license tag reports from SUFA for the past eight years and has never questioned the absence of cat licenses.
5. SUFA is not in compliance with contract Section XIX requirement of an annual independent audit. SUFA Response: SUFA has completed the annual independent audit responses for the periods of 2002-2008. The annual independent audits for the year end June 30, 2009 and June 30, 2010 are pending.se audits are pending (Exhibit S - letter from Mills, CPA).
6. MICHIGAN EXPENDITURES
A., B., The auditor states "Monroe County funding, fees and donations are to be used for the benefit of the Marathon and Big Pine Key Shelter Animals." SUFA Response: No Monroe County funds or fees were used for the Second Chance Ranch. All expenditures in Michigan were from donations and donors (Exhibit L, Revenue and Expenditure Spread Sheet). Some donors specified their donations were intended for use in Michigan (Exhibit Q, letters from Haight, Trostrud). The auditor states that they could not determine if the donations were deposited in Florida or Michigan banks. SUFA gave auditors statements from the Michigan bank account as well as electronic access to that account. The dates and numbers of the checks indicate that they were deposited in the Florida account.
The contract states "Said donations shall be used by Contractor only for the benefit of shelter animals or animals for which Contractor provides spay/neuter or other services, and shall not be used to defray or reduce County funding in the future." There is no specification in the contract that the shelter animals be located in Monroe County. Monroe County cannot impede, prohibit, limit or control SUFA operations. The contract does not state that SUFA must operate solely within Monroe County. All monies spent in Michigan have benefited shelter animals.
The auditor assumes that all donations were received at the shelters. The majority of donations were not received at the shelters.
Auditor recommends that "Monroe County should recover additional fees, donations and grants in order that these fees, donations and grants be used, as intended, for the animals at the Big Pine and Marathon shelters. This is in direct contradiction to Section XI of the Monroe County contract which states "Said donations shall be used by Contractor only for the benefit of shelter animals or animals for which Contractor provides spay/neuter or other services and shall not be used to defray or reduce County funding in the future."
C. See above response. Additionally, the USPS charges were made in reference to shelter operations in Monroe County (payroll review, mailing of invoices, faxes).
D. County trucks are leased by contractor, who is responsible for all expenses including tires, maintenance and oil changes. Nowhere in the contract does it restrict the use of leased vehicles. The animals transported to Michigan had been at the shelter for more than two years and were ill suited for the Florida Keys. This included Chachi, a wolf-hybrid and Eva, a malamute with a thick coat. Transporting them to Michigan improved their chances for adoption and reduced the cost of caring for them at the Monroe County shelters. (Exhibit R1, email between Hutton, Lundstrum). SUFA is a no-kill facility and makes every effort to find a good home for animals in their care. Monroe County was aware of this policy when they contracted with SUFA. Certain donations were made with the intent that they be used to transport shelter dogs to Michigan (Exhibit R, letters from Haight, Trostrud).
The auditor states the expenditures are "ineligible for County funds or any funds listed in the contract." This is a service contract. Nowhere in the contract does it list what expenses are ineligible for County funds. Nowhere in the contract does it state the County has the right to change the purpose of donations made directly to the contractor with a specific intent.
7. Travel and entertainment and other ineligible charges totaling $5,290.64 were paid without documentation to support amounts paid. SUFA Response: The County is not charged with distinguishing between eligible and ineligible charges as this is a service contract. The service provided has never been questioned, has been lauded many times and is considered to be above industry standards, as attested to by numerous articles and letters over the years. Furthermore, these expenses were not paid for by Monroe County stipend (Exhibit L, Revenue and Expenditure spreadsheets).
The auditor does not acknowledge that the listed 2007 charges to SUFA were reimbursed by the Director in 2007.
Charges to Banana Bay resort were incorrectly categorized by auditor as travel and entertainment. These charges were to provide lodging for prospective out-of-state employees interviewing for positions. Many of the charges were gift certificates for veterinarians and volunteers. Auditors have been provided with explanations for all of the charges questioned. The credit card statements are support documentation.
The auditor states "Sanctuary services are not listed in the contract or the budget produced by SUFA. These items do not qualify as covered services under the contract." The auditor is referring to a trip made to Best Friends Animal Sanctuary by the SUFA Secretary and Executive Director. This trip was not made for sanctuary services. Best Friends Executive Director Gregory Castle had invited SUFA Board members to the sanctuary. Castle had visited the SUFA shelters while attending a conference on feral cat management. In turn, he asked that SUFA come to the sanctuary to view their husbandry of feral cats as well as attend a national workshop on developing animal shelters. The purpose of this trip falls under the venue of SUFA’S not for profit purpose, in that continued education and networking with like-minded organizations enhances the organization’s mission statement.
As a private contractor, SUFA is not subject to the approval of Monroe County for purchases. The county did not object when the FKSPCA purchased a house for which it continues to pay mortgage payments. (Exhibit K, Monroe County Property Record). The FKSCA has also sent staff to national conferences without objection by the county. The county is discriminating in the treatment of contractors.
Monroe County does not have the right to tell contractors they cannot use their own funds at their discretion.
8. Program, marketing and other expenses are not the responsibility of Monroe County. SUFA Response: These charges were not paid for with Monroe County stipends (Exhibit L, Revenue and Expenditure spreadsheets). The auditor states that the expenditures "...do not serve a public purpose." Included in these expenditures are the costs of the annual Animal Heroes Banquet, which recognizes individuals throughout Monroe County who have made outstanding contributions to animal welfare. Expenditures on this and other community events definitely do serve a public purpose in recognizing individuals who donate their time, money and energy caring for displaced animals. Volunteers play an important part in the welfare of Monroe County. Failure to recognize their efforts detracts from the overall level of service to the community.
9. Total rent of $4,197 was paid for SUFA Director's personal residence SUFA Response: This is not the director's personal residence but rather a rental property belonging to Arnold Steinmetz. There was no lease on this property. New employee Shari Blessing was offered three months rent as part of an employment package (Exhibit T, email from Director to Blessing). As Blessing elected to leave early, SUFA continued to honor the three-month rental commitment. In the second instance, SUFA arranged a showing of the apartment to new employee Nicole Romeo. Romeo elected not to take the apartment, but failed to inform Steinmetz of her decision. As Steinmetz was under the impression that Romeo was taking the apartment and therefore had not advertised it, SUFA agreed to pay the balance of the month for the residence.
Nowhere in the contract does it prohibit the offer of housing as part of an employment package. The FKSPCA offers to house employees as part of their employment package . The failure of the auditor to report the FKSPCA housing indicates discrimination between contractors.
10. Ten utility bills totaling $1,095.20 for the SUFA Director's Personal Residence were paid from the Operating Account...There was no evidence or support showing how this was rectified. SUFA Response: These were clerical errors, made over a three -year period which encompasses the processing of hundreds of checks. As the Director submitted the invoices to the accountant, including one check for $3.59, it is apparent that there was no intention of being covert
The 7/11/2007 utility bill listed was repaid by the director on 8/15/07. This was not noted by the auditor. A second reimbursement check was submitted to SUFA on Oct. 13, 2010 (Exhibit U, U1- Reimbursement check, deposit record). The delay in deposit was due to clarification regarding the limitations on the frozen accounts. Conversely, the Director has paid SUFA utility bills with her personal checks (Exhibit V). She has not sought compensation for these but instead assumed responsibility for her mistakes. Some utility bills were sent to the shelter with the Director’s name on them (Exhibit V2), which may have contributed to confusion of personal and shelter bills. It is apparent that these were inadvertent mistakes.
11. Personal expenses paid through the operating account. There is a receivable due...that has not been reimbursed. SUFA Response: The auditor’s statement is incorrect (Exhibit W showing reimbursement made on 10/24/07).
In reference to the payroll loan, there are restrictions on the First State account pursuant to the terms of the interest rate in regard to the number of checks that can be drawn on the account. Therefore, the director personally made the loan. This demonstrates the fact that private funds and donations have been used throughout the contract because the county stipend was insufficient to cover annual expenditures.
12. Donations include contributions for expenditures paid by Monroe County. The auditor states "The contractor must fund the spay and neuter from donations and grants. Monroe Count is not responsible for spay and neuter expenditures for shelter animals according to Florida State Statute 823.15 which states "All costs of sterilization pursuant to this section shall be paid by the prospective adopter unless otherwise provided for by ordinance of the local governing body..." Monroe County has no such ordinance; therefore the County is not responsible for any of these expenditures." SUFA Response: Monroe County has not paid for expenditures on spay/neuter and related pharmaceuticals. The amounts of spay/neuter costs and revenues have been segregated from Monroe County funding (Exhibit L). SUFA has followed F.S.S. 823.15 by collecting the cost of adoption as part of the total cost of adopting an animal.
The auditor’s statement indicates that she is aware spay/neuter costs should be both funded and recovered by the contractor. This contradicts auditor’s findings (2. P.6) - all fees collected for the past eight years belong to Monroe County.
13. Inadequate internal control over deposits in violation of Section III (C) Fees and Section XI Donations of the contract….Deposits made to the bank account cannot be reconciled. The cash drawer is used for petty cash, as well as the receipts for SUFA and Monroe County.”
SUFA Response: This is incorrect, as evidenced by accountant's general ledger. The latter part of the statement is also incorrect; receipts for SUFA were kept in a separate box on the file cabinet, not the cash drawer. The auditor quotes an employee; this is suspect because of the lack of a witness and the potential conflict of interest of the employee (Sec. II, Methodology, paragraph 2). Receipts are routinely issued for donations and services as evidenced by receipt books and copies of receipt transactions.
All prior external audits have noted no matters involving the internal control over financial reporting and its operation that were considered to be material weaknesses.
14. Private cremations were paid from the Operating Account. SUFA Response: SUFA contract requires pick up of dead animals and care of injured animals. In situations where the owner is later located or in cases of ill or injured animals brought to the shelter to be euthanized, owners on occasion will ask for private rather than group cremations. This is a service that is important to many people in dealing with the loss of their pet. The costs are recovered from the owner, frequently combined with a donation to SUFA. The costs of the private cremations were not covered by Monroe County stipends (Exhibit L).
The auditor admits she does not know whether the costs were recovered but then makes the assumption that they were not. She incorrectly makes the assumption that the cremations were paid by the Monroe county stipend.
15. FORD ESCAPE purchased by SUFA for $17,424 SUFA Response: Nothing in the contract prohibits the contractor from purchasing a vehicle. The auditor calls the vehicle the Director's Vehicle. This is incorrect. The vehicle is owned and registered to SUFA. (Exhibit X1, Certificate of Title). It was purchased with donations and revenue resulting from the sale of another SUV that had been donated to SUFA. The vehicle was used by the Director as well as all employees throughout the term of the contract. Insurance covered all employees. The vehicle was marked as a SUFA car and routinely used to pick up supplies, patrol neighborhoods and transport animals. As the contractor had a service area of 53 miles and two shelters to cover, one vehicle was on site at Big Pine Key. That left two vehicles for all calls and errands north of the Seven Mile Bridge through Layton to Mile marker 70. The director used the vehicle for emergency after-hour calls to avoid having to lose time by first driving to the shelter to pick up the truck.
The auditor states "Monroe County was not informed of the purchase." Nowhere in the contract does it require a contractor to report purchases of vehicles to the County. The auditor states the contract requires the use of two vehicles. This is not true. The leasing of vehicles is optional (Exhibit X2, bid response sheet with or without trucks). The auditor states "Internal audit did not receive a response from management when questioned about the purchase and location of the vehicle. This is not true. The auditor never questioned management regarding the location of the vehicle. The vehicle was located in Florida throughout the term of the 2005 contract.
16. Conflict of Interest and potential violation of Board of Director's Instructions. SUFA Response: As stated in the bylaws, key employee compensation is set and reviewed by the president. SUFA's President and board members are aware of and in full approval of the director's salary (Exhibit Y - Letter from SUFA Board of Directors). Nowhere in the contract does it state that the director's salary must be approved by Monroe County. The auditor does not report that board members noted the fiscal contributions that have benefited Monroe County as a result of the director's efforts. As stated earlier, the auditor attempted to prompt comments from board members (Sec. II, Methodology, Paragraph 3).
The auditor references the 2008 Form 990 as listing the director’s salary as $74,000. This is incorrect. The auditor references the salaries of other contractor directors, but does not note that the FKSPCA offers housing and additional administrative staff to the directors.
17. SUFA Director's relocation to Michigan SUFA Response: This is irrelevant in that the director did not move permanently to Michigan until after the termination of the 2005-2010 Monroe County contract. The director had intended to move to Michigan for the summer months of 2010 and to return in October. The auditor states that the Board of Directors and the director did not inform the county of the move. The contract does not require that the contractor request permission regarding personnel changes. As the county had rejected the initial bid and subsequent offers through August 2010, it would seem logical that the director would plan on the possibility of relocating.
The auditor states "The SUFA Director has spent long periods in Michigan..." but does not explain that this was told to her by employee Katie Bentley who had a conflict of interest in regard to contract negotiations (Sec. II. Methodology paragraph 2). The majority of the director's time was spent in Florida until the contract bid was rejected. During periods when the director was in Michigan, her work was continued by fax, computer and phone.
SUFA is an independent contractor and has the right to expand operations in furtherance of their mission statement.
The auditor cites the Director requested a 24 % increase in the budget to run the Marathon and Big Pine shelters. The auditor's statement does not reflect the objectives of the current audit. Mathena is projecting a hypothesis of what she believes the contractor may do in the future. This is irrelevant to the audit. The auditor’s comments, however, highlight her interest in the ongoing bid. Mathena demanded access to Board of Director notes containing confidential information regarding SUFA’s bid and maintained an exchange of information with Public Works throughout the audit in the midst of SUFA’S contract negotiations with the county. This suggests collusion between the departments in regard to SUFA’S bid.
18. Invoices and Receipts do not reflect business purpose. SUFA Response: The auditor states "It is not always easy for a third party reviewer to ascertain whether expenses were incurred solely for a business purpose." Receipts are routinely reviewed by accountant and shelter director and , if a purchase is questionable, the director contacts the employee for an explanation. The auditor refers to a purchase of meat and pumpkin. Employee Lee Ann Mathews clearly explained that this was a special diet for a Boxer with severe food allergies, paid for in part by donations. The shelter director was made aware of the diet and had given permission for the purchases (Examples Z1,Z2 - letters from G. Diethelm, DVM and volunteer Henry McMinn). The auditor appears to deliberately ignore the explanation. The auditor did not contact SUFA's director or the veterinarian to confirm Mathews' explanation.
19. Employees classified in error as independent contractors (Form1099-MISC). … “a SUFA employee was bitten by a dog and taken to the hospital…. the bill was not paid”. SUFA Response: The auditors do not list the names of three of the persons, so SUFA cannot respond. The fourth person represented himself as an independent contractor. The auditor references a bill for the fourth person and states it was not paid. This is not true (Exhibit Z3 – 6/23/10 SUFA check to Fishermen's Hospital).
20. Three (3) independent contractors were not issued Form 1099s for 2009. SUFA Response: Jana Fly, D.V.M., was paid a total of $720.75 for vet clinic expenses which included reimbursement of expenses. Auchenbach, DVM was paid a total of 4438. A 1099 is not required for payments under $600. Paul Mills, CPA, is a business, which, like many professional businesses take the name of the indicidual professional. Therefore a 1099 was not issued.
21. Employee bonuses and extra pay are not included in payroll. SUFA Response: SUFA auditor could find only one check to Katie Bentley listed as a bonus. Checks issued to employees were mainly for reimbursement of expenses.
22. No documentation for $2,000 repairs to Big Pine Shelter. SUFA Response: Check #1299 was payment for the installation of mosquito screening on Big Pine. This was not a repair of the building. Money was donated for screening and MacDougall worked as day labor to put up the screening (Exhibits Z4, Z5 letters from MacDougall, Rinyu).