As Florida’s peak tourism season kicks off, the Florida Keys are grappling with how to address a scathing audit of its county tourism agency.
In October, the Monroe County Clerk of Circuit Court and Comptroller released an initial audit of the county’s Tourist Development Council (TDC).
The Monroe County TDC, which is a legislative extension of the Monroe County Board of County Commissioners, was created by a referendum of electors in 1981 to oversee the development of the county’s tourist economy with a mix of public and private efforts.
The audit reviewed the TDC’s marketing processes, contracts, and expenditures for the period from fiscal year 2019 through 2023.
It found alleged “repeated noncompliance” with the county’s purchasing policy, “a significant lack of internal controls and management oversight” when it comes to financial management, “potential self-dealing” and double-billing from a contractor and “serious ethical concerns” among leadership.
“We want to fix this,” said Rita Irwin, the chairperson of the TDC board. “Nobody ever goes, ‘Yippee, an audit’ but we can always learn and you must respond and say, ‘How can we do better?’ If there are factual things, you want to address them but if there are systematic concerns, you want to correct them.”
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The allegations include that the TDC, through the nonprofit running their executive office called Visit Florida Keys, mishandles receipts and does not sufficiently review the accuracy of vendor invoices before submitting them to finance for payment.
For example, auditors found that 14% of sampled items were returned to Visit Florida Keys due to insufficient documentation or explanation of what is being invoiced. They also include that Visit Florida Keys staff may have violated county purchasing policy by submitting purchase requisitions after goods and services are purchased, not before like the policy requires.
The audit also alleges that the TDC misstated their revenues and expenditures to the public for the fiscal year 2022.
For example, the TDC annual report for the Board of County Commissioners stated that a fund controlled by the TDC identified as “Fund 115,” was reported as having total revenues and transfers add up to about $9.1 million. Auditors found that the number should be reported as $11.3 million, which would mean the TDC underreported that revenue by $2.1 million. Similar reporting discrepancies were found across 6 other TDC funds. The audit projects that the TDC’s fund balances at the end of FY 2022 exceeded $100 million.
During a Nov. 8 Monroe County Board of Commissioners meeting, commissioners decided to recommend the Tourist Council place its Marketing Director, the TDC's head executive, on administrative leave with pay.
On Nov. 16, the TDC Board accepted commissioners’ recommendation. The board also moved to have one of their members, Diane Schmidt, step in to take over the marketing director’s duties in her absence.
Management oversight
The marketing director, Stacey Mitchell, who was only referenced by her title in the audit, is accused of sharing her financial system account log-in information to delegate handling purchase orders and vendor invoices to other TDC employees without management oversight.
She’s also accused of potential ethical misconduct after hiring a photographer that she is alleged to have a long-time personal relationship with. The TDC commissions an annual photo calendar through photographer Robert O’Neal. O’Neal and Mitchell have a long-term “landlord-tenant relationship” as described in the audit. Mitchell declined to comment to WLRN about the audit.
The audit alleges that the focus of the calendar appears to help promote O’Neal’s business website and a portion of the calendars printed through the TDC are given back to O’Neal to re-sell later. No other vendors were given the opportunity to bid on the project, according to the audit, which is a violation of Monroe County purchasing policy.
O’Neal said the accusation that he sells calendars the TDC purchased is false.
“My world went into the gutter,“ O’Neal said. “It’s devastating to have someone falsely accuse you of something, especially something like stealing.”
O’Neal said auditors never called him to ask about the calendar sales. He said that his photo calendar project began in 2008 with then-TDC director Harold Wheeler. Each year, O’Neal takes an order from the TDC for calendars. Then, he orders extra to sell online and in local bookstores. This year, he said, the TDC requested 1,100 calendars. O’Neal planned to purchase an extra 400 for himself. So, he placed an order to print 1,500 calendars and paid the order in full. Then, he invoiced the TDC for the 1,100 calendars they requested.
“It’s pretty simple math,” he said. “Had the county auditors actually take the time to contact me, I could have provided solid proof of this.”
Potential double-billing and using a nonexistent company
Since the audit’s release, further investigations into the TDC were prompted.
While most are still ongoing, a review from the county attorney’s office contradicts the clerk’s finding that a TDC contractor was potentially double-billing for his services.
The October audit had accused long-time TDC contractor, NewmanPR, of double-billing the TDC for photography and videography services. It also alleged that NewmanPR may have submitted reimbursement requests through a nonexistent company named Graphics 71.
NewmanPR’s president, Andy Newman spoke at the Nov. 16 TDC board meeting. He said he was not given the chance to provide explanations for the accusation of double-billing in the clerk’s audit.
“It feels like a rusty dagger has been stabbed through my heart,” Newman said. “[The audit] contains extremely disconcerting accusations against my company, my staff, our partners and family friends and others who have known our work and reputation for more than four decades.”
However, on Nov. 7, the county attorney’s office released a memorandum to the county clerk, who oversaw the original audit.
The memorandum states that the county attorney, Bob Shillinger, reviewed the contract between NewmanPR and the TDC and its outlined scope of services.
While the scope of services calls for NewmanPR to “coordinate development and distribution of news materials for trade and consumer media” as well as “provide development and maintenance of video and still image libraries,” the county attorney determined that the contracted services do not include photography and videography services and production.
“In my view, no double billing exists for these services under the provisions of the contract,” Shillinger wrote in the memorandum.
Andy Newman told WLRN that he is “gratified that the Monroe County attorney's office concluded that there were no double-billings being done by our company.”
“At this time, I can't comment beyond that as the audit continues,” he said.
Further investigation
The initial audit’s findings prompted the clerk’s office to launch three more audits of the TDC’s agencies of record. The agencies include NewmanPR, Two Oceans Digital and Tinsley Advertising & Marketing. Those financial record reviews are ongoing.
Commissioners also voted for, and the TDC board approved, the hiring of an outside fraud examiner firm, Cherry Bekaert.
The firm will review the TDC’s financial filings and contracts as well as make suggestions for improved financial management processes. A representative from Cherry Bekaert laid out the firm’s plan to independently review and consult the TDC during the Nov. 8 commission meeting. Their proposed timeline includes submitting a final report 16 weeks after they begin their independent review process.
