By Rich Pollack

Highland Beach town leaders, miffed that a preliminary report from state auditors looking into the arrangement between the town and Delray Beach for fire service was done without their input, want the state to take a deeper dive into how findings were calculated before it releases a final report.

In November, a preliminary audit showed that Delray Beach failed to bill the town $2.2 million, mostly in pension contributions dating back several years.

Faced with the prospect of Highland Beach’s possibly having to pay that money back, Town Attorney Glen Torcivia fired off a letter to Florida Auditor General Sherrill Norman, saying that figure was based on a disputed calculation regarding the numbers used to figure costs.

In recent years, Delray Beach began using the actual costs of the 21.5 firefighter paramedics assigned to the station in Highland Beach to determine Highland Beach’s cost for service, about $5 million per year.

Highland Beach has argued, however, that the agreement between the two municipalities clearly states that cost should be calculated based on the average “in-rank” cost of fire rescue personnel throughout the city.

“We would respectfully request that you not base your findings as to this issue on the city’s contractually incorrect method of processing payroll,” Torcivia wrote. “Rather, we would request that you base your findings on the clear contractual language requiring the use of in-rank averages when calculating salary, overtime, and fringe benefits.”

Torcivia, a member of the team that negotiated the 2016 interlocal agreement, said the reason the contract identified costs of personnel as being based on in-rank average was that Highland Beach had no control over whom Delray Beach assigned to the station in town.

“One of the reasons that the parties agreed on this distinction is that historically the fire rescue personnel assigned to the Highland Beach fire station were more experienced and had often requested assignment to that station,” he wrote to the auditor general. “The more experienced personnel were generally higher paid.”

The dispute comes as the town prepares to start its own fire department in May.

Since being notified of the findings of the preliminary audit, not by the auditor general’s office, which sent its report only to Delray Beach, but by the media, Highland Beach Town

Manager Marshall Labadie and town commissioners have complained about not being part of the audit process and not having the chance to share their concerns and findings with auditors.

“The town has engaged a forensic auditing team and would appreciate the opportunity to provide its report and records to your office,” Torcivia wrote. “We would also appreciate being provided with all of the records that Delray Beach provided your office. It might be helpful to compare the records that Delray provided to your office with the records that Delray Beach provided to the town.”

Delray Beach is planning to hire a forensic auditor itself to look into the matter.

In the preliminary audit report, which focused on the financial processes Delray Beach’s fire rescue department used as part of its agreement with Highland Beach, the auditor listed a handful of findings that showed flaws in the city’s financial systems.

Among the findings were:

• Firefighter salary and benefits amounts recorded in the city’s accounting records and billed to the town did not agree with employee timekeeping records.
• City purchasing policies and procedures did not ensure that goods and services ordered, received and distributed to the town’s fire station were accurately billed to the town.
• For the town’s nonpayment of billed services totaling $517,654, the city did not perform collection efforts in a timely manner.

Torcivia, at a recent Highland Beach Town Commission meeting, said that the audit showed serious deficiencies.

“I would be embarrassed if I was Delray,” he said. “Delray looks like it wasn’t mismanaged, it looks like it wasn’t managed at all.”

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