Gulf Stream: Report criticizes no-bid auditor contracts

By Steve Plunkett

The Palm Beach County Office of the Inspector General has scolded Gulf Stream town officials for using the same outside auditor since 2000, renewing the contract four times when the town’s original request for proposals did not mention any renewal options.
Additionally, the inspector general said, contract extensions with auditor Nowlen, Holt & Miner PA in 2005, 2010 and 2014 should have instead been put out to bid again and ranked by an internal audit committee established by the Town Commission.
“Therefore, the amount paid to Nowlen, Holt & Miner for audit services for fiscal years 2005 through 2017 totaling $189,650 is considered questioned costs because the town did not comply with applicable provisions” of state law, the Inspector General’s Office said in a Sept. 25 report.
The office also faulted Gulf Stream for not having a “documented policy or procedure for contract monitoring” and for not utilizing a “risk assessment tool” in monitoring contracts.
Trey Nazzaro, the town’s staff attorney, conceded in a response to the report that the language in the original RFP was “ambiguous,” but said Gulf Stream officials “believe [it] could be interpreted to allow for the renewals that you have marked as questioned costs.
“We do appreciate your clear note in bold that ‘in this specific case’ the questioned costs are not indicative of fraud or waste,” Nazzaro continued. “This can be seen by an initial procurement following the law, and the price staying very reasonable for the duration of the relationship between the town and auditors.”
Investigators for Inspector General John Carey said minutes of the Town Commission’s Aug. 11, 2000, meeting showed that then-Town Manager Kristin Garrison advised that the auditor selection committee, which included herself, Mayor William Koch Jr. and finance officer William Thrasher, had reviewed six proposals and interviewed three firms. The committee recommended hiring Nowlen, Holt & Miner “due to their competitive rates and ability to meet the town’s needs.”
Gulf Stream paid its outside auditors $13,050 in fiscal 2005. The amount gradually rose to $15,050 for fiscal 2010 and stayed there through fiscal 2017.

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