South Florida Times
April 30, 2010
Audit Seeks Probe of City's Grant Programs
By Elgin Jones
DEERFIELD BEACH - Deputies escorted two city employees from their office this week following a scathing audit that accused their division of lax record keeping, unaccounted funds, conflicts of interest and several incidents of possible fraud in a city grant program for needy people that they oversaw.
Stephanie McMillian and Debra Chapman have been placed on paid administrative leave from their jobs as community development program coordinators in the Deerfield Beach Community Development Division (CDD). They were escorted out of their office just before noon on Wednesday, April 21.
"We were escorted out of the office, but I don't know why," McMillian said when contacted by a reporter. "I have not seen the audit, but we have done nothing wrong."
Broward Sheriff's Office deputies went to the office and seized computers as the women were escorted off the property by their supervisors.
"The City Manager did contact BSO to remove two computers from their building and turn them over to the BSO Evidence Unit for safekeeping while they conduct an internal review," BSO spokesperson Keyla Concepción said in an email.
The CDD uses federal, state and local funds to provide grants aimed at helping people with lower incomes. The grants assist first-time home buyers, provide home repair assistance, and hurricane weather-proofing, including new windows, storm shutters and caulking, among other services.
The disturbing conclusions about the way the CDD was administering grants came from Michael Kessler, president and CEO of a forensic auditing firm that bears his name, during a presentation at the Tuesday, April 20 Deerfield Beach City Commission meeting.
"Kessler recommends that this Kessler Report be referred to United States Attorney, Florida Attorney General, U.S. Department of Housing and Urban Development Inspector General and IRS Criminal Investigation Division so that the findings in this report can be further investigated and if criminal acts are proven, the individuals responsible can be brought to justice," reads an excerpt from page 4 of the 188-page report.
"The entire process of awarding funds to deserving individuals should have been administered in a documented, precise, calculated, and unbiased manner," Kessler said. "But what was revealed during my review is that this was clearly not the case."
The findings led to an immediate shakeup in city hall.
"The City of Deerfield Beach recently hired Kessler International to conduct an internal control review of the Community Development Division," Interim City Manager Burgess Hanson wrote in memos to McMillian and Chapman on Wednesday, the day after the audit findings were released. "The report raises some serious issues and concerns, of which we will need time to review the findings in detail. During our review, you will be placed on paid administrative leave until further notice."
The audit was conducted by New York-based Kessler International, a high-profile forensic auditing and investigative firm whose work has exposed alleged fraud in countless government-funded programs throughout the country.
The company's reports have spurred dozens of criminal investigations, including the recent dissolution of, and ongoing investigations into the city of Fort Pierce's Community Services Division over similar issues.
The city of Deerfield Beach hired the firm in February after community activist Chaz Stevens began posting irregularities about the grant program on the Internet.
"Kessler's limited internal controls review of the CDD has disclosed significant internal control breaches as well as suspected fraud regarding the oversight responsibility by certain staff and sub-recipients entrusted to administer City, County, State and Federal funding," page 4 of the audit states.
The Deerfield Beach audit analyzed a sampling of grants issued by the CDD to 22 individuals directly, and through 11 different nonprofit and charitable organizations, dating back to 2005.
Among the grants are those awarded to the Church of Brotherly Love King's Table Corp., a church-based social services agency operated by the Rev. Anthony Davis, pastor of the Church of Brotherly Love.
A $20,000 grant that went toward a program that taught life skills to needy families, and for mentoring youth in 2007, came under scrutiny for its lack of documentation to verify expenditures.
"The services for the sub-recipient are listed to start on the first day of October 2006 and end on the first day of October 2007 despite the fact that the resolution for funding was not approved until March 20, 2007," the report states.
There are also questions about Davis' wife, daughter, and a nephew who are employed by the program. Additionally, a $12,400 grant Davis received to have a bathroom in his home remodeled to accommodate disabled people was scrutinized.
According to the report, Davis' household income exceeded the program's low-income criteria, and therefore he was not eligible for the grant. The report also alleges that one of the two daughters he listed on the grant application is actually his niece.
"Yes, I did list her as my daughter, because I raised her since she was a baby," Davis explained.
Also, the report states, Davis did not list another property he owns on the grant application, which would have further disqualified him.
Davis, a retired BSO deputy who also serves on the city's Board of Adjustments, said, "The city qualified us and we listed everything on the application. Yes, my family members work for our program, but so do ten other people. We are a small upstart operation and who else can you get to work for the small amount we pay?"
He continued: "I'm all for what he [Kessler] and Chaz [Stevens] are doing. I think public corruption should be exposed, but we are not a part of that."
The audit report alleges that Davis and other grant recipients would not turn over requested records, so the findings are limited. Davis said he initially viewed it as a witch hunt, and sought advice from his attorney before providing records. Davis said he has since turned over those records to the city.
"Our records contain private information on the people we help, and they are asking for five years of records. We have to protect our clients and a make sure we don't release anything the law says we should not and that's why we contacted our attorney," Davis said.
"I'm all for getting rid of corruption and I only ask that after we clear this up, that we be given an opportunity to explain what has really happened at a commission meeting," he said.