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TC Palm
February 2, 2010

Fort Pierce city manager shuts down Community Services division after allegations of corruption

By Alexi Howk

FORT PIERCE - City Manager David Recor has shut down the Community Services division indefinitely after a forensic audit called the department "a corrupt organization" that mishandled state and federal housing dollars to benefit employees, friends and relatives.

Full-time Community Services employees have been placed on administrative leave with pay pending the outcome of an internal review of the department, states an announcement released Tuesday by City Hall. Additionally, all temporary employees in the division have been let go.

"Effective immediately, all programs, activities and processes in the city's Community Services division have been placed on indefinite hold," the release states.

"The City will be reviewing its organizational structure and evaluating alternative approaches to the traditional methodology of service delivery in the division," including evaluating whether to reallocate federal dollars for improving infrastructure in target areas instead of using the money for housing assistance.

The city hired Kessler International of New York City, a company that specializes in uncovering white-collar crimes and corruption, to conduct a forensic audit after allegations of favoritsm erupted in the Community Services Department over two city employees getting questionable mortgage loans.

The audit cited acts of "theft," "fraud" and "cronyism."

In a 173-page response to the forensic audit obtained from the city's Web site, Assistant Community Services Director Dorina Jenkins questioned the accuracy of the Kessler audit and said the company failed to interview employees from all departments that are actively involved with the day-to-day operations of Community Services.

She also blamed some of the mistakes Kessler found in the department on former employees, title companies and employees in other departments, including finance.

Jenkins said many of the allegations listed in the Kessler audit could have been addressed and clarified "if the Community Services division staff would have been afforded an exit interview prior to the report being completed and submitted to the public." She also said Kessler did not have proper documentation to back up several of its allegations.

"The public can be assured that no federal or state guidelines have been violated at any time during the administration of these funds," Jenkins said.

Jenkins has worked in the department for more than 20 years and has been assistant director for several years.

Recor said certain housing and other assistance programs may be retained but re-prioritized. He said city staff has been in contact with the Department of Housing and Urban Development's regional office in Jacksonville. It's unclear whether HUD will strip the department off its housing funding.

Recor said the city has already begun to correct various procedural and program administration errors and will be establishing a team of staff from the City Attorney's Office, Finance Department and the Planning Department to monitor the process through completion.

City officials plan to discuss the future of the Community Services Department at a strategic planning workshop scheduled from 9 a.m. To 5 p.m. Friday at the River Walk Center, fomerly the Community Center, on Indian River Drive.

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