Gainesville City Commission sets aside questions about Reichert House financial irregularities
BY JENNIFER CABRERA
GAINESVILLE, Fla. – The Gainesville City Commission held a Special Meeting this morning to vote on a request that the State Auditor General change one of the findings in a “preliminary and tentative” follow-up report to the previous audit report, but since the Auditor General had already made the requested change, they simply heard an update on the audit follow-up, effectively ending any investigation of financial irregularities associated with the City-run Reichert House Youth Academy (RHYA).
The staff recommendation for the meeting was: “The City Commission 1) acknowledge receipt of the City Attorney’s memorandum dated October 3, 2023; decline to expend further resources related to past records of non-city entities that purportedly acted in support of Reichert House; and 3) request the State Auditor General to consider Finding 8 of the Preliminary & Tentative Findings resolved as “no occasion to correct,” similar to the other Reichert House related findings.”
“No ability to demand these records”
City Attorney Daniel Nee’s memo stated that the City was “unable to control” the activities of City employees who performed duties for both the City and the outside nonprofits associated with Reichert House and that the City “had no ability to demand these records, and has no ability to recover them.”
The memo said that since the City “has now severed ties to RHYA… [and] continues to have no connection with these associated non-city entities,” it would be legally impossible and fiscally irresponsible to continue to pursue the investigation of the financial irregularities. Nee added that such an investigation “may provide peace of mind regarding past activities of non-city entities, but would provide no present or future benefits to the City of Gainesville or its residents.”
Nee told the City Commission this morning that he had copied the Auditor General’s office on the memo that included the recommendation to close out Finding 8 regarding RHYA, and “they in fact have taken action, positive action, in favor of the City.” Nee elaborated, “In further discussions with the Auditor General’s office, we’ve tried to make the point that, one, these weren’t City records, weren’t City entities… and also wasn’t City money. It was money from private foundations that they were intending to offer for supporting Reichert House Youth Academy… We have no ability to control those records or even to compel their production.”
Restarting Reichert House through outside agencies
Mayor Harvey Ward asked if there were any questions, and Commissioner Desmon Duncan-Walker asked about the status of restarting the Reichert House program through “agencies outside of the City.”
City Manager Cynthia Curry said the Commission had set aside $250,000 in the budget for the current fiscal year, and her staff is putting together a Request for Proposals (RFP) for entities to access that money for reopening the Reichert House. She said there has been interest from Palm Breeze (one of the entities that previously handled funds associated with Reichert House programs) and the Black on Black Crime Task Force. She said the RFP will probably be issued in the next few months “to whoever is interested in submitting a proposal for those after-school care services that were provided by Reichert House.”
Motion and vote
Commissioner Bryan Eastman made a motion to accept staff’s recommendation except for the third part, because it was no longer necessary. Commissioner Reina Saco seconded the motion. The motion passed unanimously.
City’s response to the Audit Follow-up
Interim City Auditor Brecka Anderson reviewed the current status of each finding (summarized below), and Ward asked, “And it’s accurate that there are no uncorrected findings?” Anderson responded, “That is correct… We had eight ‘Corrected’ findings, we had four ‘No occasion to correct,’ which were the Reichert House items, and the remaining were ‘Partially corrected.'”
Finance Director Sue Wang presented the City’s draft response to the Audit Follow-up, saying that the current status reflects the “monumental, progressive action taken by the City” since the original report was issued. She said four of the ‘Partially corrected’ findings relate to General Government, and two relate to GRU. Ward pointed out that the City Commission has “no standing on the GRU items.”
In a press release distributed by the City, Ward said, “I am grateful and proud of our City team for aggressively addressing 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.”
The current state of the audit
The original audit report had 18 findings. A summary of each, the Auditor General’s update, and the City’s response are listed below.
Finding 1: GRU debt levels were significantly higher than comparable municipal utilities.
Current status: “The City partially corrected this finding.”
The Auditor General noted that the proposed debt reduction plan did not include additional debt that would be required to support the recommendations in the utility’s Integrated Resource Plan. GRU responded that they had considered the IRP when developing the plan, but “the IRP was not considered because the City Commission would not accept the IRP.”
Finding 2: GRU transfers to the General Fund
Current status: “The City corrected this finding.”
The Auditor General noted that the City had developed a methodology for determining the transfer “that considers the long-term ability of the GRU to pay.”
Finding 3: Indirect cost recovery
Current status: “The City corrected this finding.”
The Auditor General noted that the City has updated its indirect cost allocation procedures in response to the recommendations.
Finding 4: RHYA Program Oversight and Control
Current status: “The City had no occasion to correct this finding.”
The Auditor General noted that since the RHYA program activities under the City ended on May 31, 2023, “the City no longer funded or administered the RHYA program.”
Finding 5: Use of Reichert House, Inc. to Support RHYA Program Operations
Current status: “The City had no occasion to correct this finding” because program activities under the City ended on May 31.
Finding 6: Oversight of Reichert House, Inc.
Current status: “The City had no occasion to correct this finding” because program activities under the City ended on May 31.
The Auditor General noted, “According to City personnel, there were no residual assets, including cash, held by Reichert House, Inc. at the time of dissolution that should be transferred back to the City.”
Finding 7: Transparency of Reichert House, Inc. and RHYA Program Operations
Current status: “The City had no occasion to correct this finding” because program activities under the City ended on May 31.
Finding 8: Use of Other Nonprofit Organizations for the RHYA Program
Current status: “The City corrected this finding.”
The Auditor General noted that Palm Breeze Youth Services closed its bank account in May 2019 and that according to the Community Foundation of North Central Florida, $62,514 was in the Friends of the Reichert House Fund, but none of that amount belonged to the City. The Auditor General further referred to the City Attorney’s memo in explaining that the office would not be pursuing records from the nonprofit organizations.
Finding 9: Financial Statement Preparation
Current status: “The City partially corrected this finding.”
The Auditor General noted that the City continued to pay consultants to prepare financial statements through the issuance of the 2021-22 fiscal year statements.
The City’s draft response to the Audit Follow-up disagreed with the Auditor General, stating that the City has hired staff with the “knowledge and capability required to produce GAAP financial statements” and that the Department of Financial Services has strengthened operating procedures and training.
Finding 10: Budget Management
Current status: “The City partially corrected this finding.”
The Auditor General noted that quarterly budget-to-actual comparison reports had not been presented to the City Commission as promised.
The City’s draft response disagrees, noting that budget-to-actual comparison reports were presented to the Finance Committee on August 31 and to the City Commission on September 7.
Finding 11: Transparency of the Golf Course Operations
Current status: “The City corrected this finding.”
Finding 12: Gainesville Community Reinvestment Area
Current status: “The City corrected this finding.”
Finding 13: Employee Background Screenings
Current status: “The City partially corrected this finding.”
The Auditor General recommended that the City continue requiring employees in certain positions of trust to get background screenings every five years.
The City’s draft response states that they consider this finding corrected, and that, as of July 2023, all required background screenings have been provided to the Auditor General.
Finding 14: Employee Evaluations
Current status: “The City corrected this finding.”
Finding 15: Selection of Debt Professionals
Current status: “The City partially corrected this finding.”
The Auditor General notes that GRU does not use a competitive selection process for bond counsel because, according to the City Attorney, “the decision to retain bond counsel for multiple years is more effective when a debt portfolio is as large and complex as the GRU’s.”
At today’s meeting, the City Manager noted that this is a GRU issue, not a General Government issue.
Finding 16: Purchasing Cards – Periodic Reviews
Current status: “The City corrected this finding.”
Finding 17: Purchasing Cards – Separations
Current status: “The City partially corrected this finding.”
The Auditor General notes that the City should enhance its procedures to document suspension dates for purchasing cards in cases where a card is suspended before it is canceled.
The City’s response notes that the City agrees with this recommendation: “Once a P-card is canceled in the system, the suspension date is wiped out and documentation of the suspension date is therefore removed. To strengthen documentation of the suspension of a card, the City will amend the P-card procedure to ensure that a card’s suspension date is timely and adequately documented in City records.”
Finding 18: Travel
Current status: “The City corrected this finding.”
Of course they don’t want to audit any “irregularities” with regard to Reichert House. It would open up the City for an assortment of investigations into the potential malfeasance of public funds by the city thieves, not to mention the potential demands of their personal financial statements.
You liberal idiots, you’ve actually believed everything they’ve been selling you for the past 10+ years. What’s it going to take before you realize you’ve been played for fools?
ir·reg·u·lar·i·ty, noun:
the state or quality of being irregular.
“There is evidence that fraud and irregularity continue on a large scale.” Put “financial” and “irregularities” together and guess what that spells out?
Quite the definition of Gainesville and the leadership that has been ruling over the residents and utilizing the “publicly owned” utility for their own personal use for years now. No wonder there’s a need for the new “Authority” to provide some governance over the group of so-called leaders who supposedly have the public’s best interests in mind.
Notice this part?
Nee said that it would be “fiscally irresponsible to continue to pursue the investigation of the financial irregularities.” He also added that such an investigation “may provide peace of mind regarding past activities of non-city entities, but would provide no present or future benefits to the City of Gainesville or its residents.”
Yet they still want to pursue a lawsuit against the newly appointed GRU Authority. Amazing how they only waste money when it suits their political agenda and intends to hide their fiscally irresponsible decisions.
Irregardless of what they say, the public’s, (those with common sense & hint of intelligence), perception will be they are hiding something. Unfortunately, the Democrats who continue to vote for these people will always believe what they’ve been told.
Don’t worry we’ll just do another Journal Entry. See everything is fixed now. Nothing to see here, move along.
RICO, RICO, RICO the past and present City Commission and all deaf and dumb Charter Officers and Staff enablers. Transparency and accountability. Yeah, right.
The city knows full well the amount of corruption that occurred at the criminal training ground that is/was Reichert House. Claiming to have washed their hands of it while simultaneously transferring Reichert House employees into other areas of city government does not resolve the problem, it just spreads the cancer. Carlos Holt found out all too quickly how far the city will go to protect their pet projects, and now they want to spend another $250k on it.
Yeah, the entire argument for not investigating seems to be that RH is no longer affiliated with the city in any way, but in the next breath they want to give RH $250k.
Sounds like that would make RH affiliated with the City again?
Palm Breeze handled RH funds before, the City admits but refuses to investigate that there were funding irregularities, so why would they ever be considered for future funding? An investigation is needed to clear them before considering them for funding.
Who exactly is part of Palm Breeze and/or the Black on Black Crime Task Force?
That $250k would make a nice supplement to someone’s retirement accounts.
True, the city is limited in what and how they investigate (when they want to do so) but, not a grand jury.
How about just asking Chief Jones? I believe a good man but naive in his trust of others.
I wonder if any federal or state funds were ever utilized for the Reichert House and it’s sponsors. If so, an entity that has financial oversight should employ all resources at their disposal to investigate and prosecute any and all persons involved.
Good question. Looks like you can still give money to this one – https://www.uff.ufl.edu/giving-opportunities/012613-reichert-house-scholarship-fund/
City Attorney said in a memo, “the City was unable to control” city employees and “had no ability to demand these records, and has no ability to recover them.”
What’s up with Saco’s hand? She hurt it playing with herself or burning the evidence?
Nothing to see here. Of course if it was a conservative non-profit then they would investigate and call the DOJ, FBI, & IRS on them. But, this is progressive $$ so it’s pure as the driven snow and can be used for any purpose their virtue designates worthy. So maybe they chalk this up as reparations?
I wonder what it would take to have the state government come in and do a thorough audit on the city, and the commissioners present and ones who served the past 10 years
Oh My! I think the Mayor , Commissioners, and City Manager just invited the State Auditor back to Gainesville. 5150 some one call the PoPo.
Employee background screenings? Not fair. Gonna make it harder for me to steal enough dollars for my next Brazilian butt lift.
Are they shutting it down just long enough to avoid the audit investigation and planning to reopen it at some later date?
Mr. P, it was never shut down. All the players are on task with RH 2.0. The very thought that there are two offers to pick up the baton is hilarious. The BOBCTF is GPD. Palm Breeze (whatever) is one guy and was just one of the previous recipients of donor missing funds. There are a lot of missing pieces to this puzzle but the picture is quite clear. Who decided to throw $250K down a pit with no one in it? Wait until you see this one unfold into a 15 million dollar, non-accredited, “residential” program. More to come…
Another problem gets swept under the rug. Wasted moneyand probably some stolen.
That would be a conflict now that one of the RH directors is working in the managers office.