Opa-locka is a city that pretty much shouldn't exist. The FBI raided City Hall in 2016. City services are broken to the point that straight-up human feces recently flooded city streets. To fix the mess, officials brought in ex-County Manager Merrett Stierheim, a man who's seen his fair share of political shenanigans, but Stierheim quit and said the place wasn't fixable. Some of the city's own residents in 2017 tried to mount a (failed) campaign to dissolve Opa-locka entirely.
Now, a new report issued June 28 by the Florida Auditor General reveals that — surprise! — the city is still a top-to-bottom mess. State audits generally aren't massive documents, but the Auditor General's latest Opa-locka report is a 231-page tome that cites 99 individual issues with the city that were either recently addressed or still need to be fixed. State auditors found that the city was in some cases losing or blowing millions of dollars. In other cases, auditors said they found potential instances of fraud.
The audit begins:
"This operational audit of the City of Opa-locka (City) and the Opa-locka Community Redevelopment Agency (CRA) focused on selected City and CRA processes and administrative activities. Our operational audit disclosed a pervasive lack of adequate controls necessary to promote and encourage compliance with applicable State laws, City ordinances and regulations, contracts, grant agreements, and other applicable guidelines; economic and efficient operations; reliability of records and reports; and the safeguarding of assets. Our audit also disclosed numerous instances of potential fraud, waste, and abuse. For some of our findings, the amount of resources lost due to noncompliance or inadequate accountability was not quantifiable; however, we identified questioned costs or potential avoidable losses totaling nearly $5 million, collectively, for the City and the CRA."
The audit paints a startling picture as to exactly how the city wound up crumbling into a virtually unparalleled financial crisis. The Miami Herald in 2016 detailed all sorts of graft, corruption, bribery, and mismanagement by city officials in an investigative series, but the new audit adds even more color to Opa-locka's utterly depressing story.
In essence, very few things seem to be going as planned since the FBI raided City Hall. For the last few years, the state has been monitoring the city's recovery efforts, but auditors said the city has blown multiple deadlines to file reports with the state. In one instance, the city was supposed to have submitted a recovery plan to the state by August 1, 2016. The city didn't do so until August 1, 2018, exactly two years later.
Since then, the state says Opa-locka officials haven't complied with some pretty serious financial aspects of their recovery plan. Many of those issues were made worse by the fact that several high-level managers — including the assistant city manager and the budget director — had quit. Their positions were then left vacant for months at a time. As of February 2019, the city also had not developed any internal auditing functions whatsoever.
Worse, city officials failed to follow many of the guidelines set by the state, sometimes brazenly. Auditors noted that officials had been banned from taking city cars home after some were caught abusing their car privileges. But by the end of 2017, the mayor and some commissioners had simply started using city-issued cars again, and auditors noted there didn't seem to be any new commitment by elected officials to stop. Plus, as of February 2019, state employees said the city still didn't have a basic inventory to determine whether city employees were using or stealing other city assets, too.
In many cases, the auditors warned that the city failed to keep proper books and had in some instances failed to take out insurance on essential pieces of property, including cars. Opa-locka "may have paid for insurance on vehicles that it did not own and may have operated vehicles that were uninsured," the audit notes. Opa-locka officials also failed to document at least $9,000 in payments to the mayor and city commissioners between October 2015 and June 2016. In separate cases, the mayor and some commissioners received $200 monthly stipends from the city without documenting why. The city also paid out tens of thousands of dollars in incorrect time-off and overtime payments. (Over the last few years, the Miami Herald has detailed all sorts of ridiculous expenses the city incurred, including millions blown on parties and random pet projects, while the city teetered on the brink of ruin.)
In a follow-up exhibit attached to the audit, inspectors noted $1.6 million in "questioned costs," including $217,476 in employee raises that auditors found suspicious, $192,029 in unexplained "disbursements," and a staggering $781,849 in unsupported electronic payments to various sources.
In a darkly comedic twist, the state found that some of the city's own new rules and "honor codes" had pretty large ethical loopholes. The city's Whistleblower Act and Honor Code, magically, do not define the concept of "fraud" or require other employees to report fraud if they see it. In some cases, the city copied-and-pasted portions of the Miami-Dade County Commission's own Honor Code without changing any of the text.
"The Honor Code's repeated references to County officials and employees occurred because the City modeled its policy after Miami-Dade County's policy but, in doing so, the City did not properly adapt the County's Honor Code to reflect differences between the County's and the City's administrative and governance structures," the audit states.
The findings continue to get more frightening. As of August 2018, state investigators noted that Opa-locka had failed to pay a whopping $3 million it owed the state Department of Transportation in red-light-camera fines. Under state law, red-light-camera fines are set at $158 — $75 for the city and $83 for the state. Cities are supposed to electronically send that money to the state on a weekly basis so the state can deposit the money into revenue funds, including an Emergency Medical Services Trust Fund and a Brain and Spinal Cord Injury Trust Fund. Between July 2010 and July 2018, the private company controlling Opa-locka's red-light cameras gave the city $8 million, and the city was supposed to forward about $4 million of that to the state. Officials pretty much just didn't bother.
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"In response to our inquiry, City personnel indicated they did not know why former City personnel did not make the required weekly transfers to the DOR [Department of Revenue] during the period June 2013 through July 2018," the audit reads.
Officials also violated a host of their own local laws when conducting financial transactions. Officials failed to properly put contracts out for bid and wound up overpaying one consultant by $14,500 and hiring a law firm that couldn't handle Opa-locka's workload.
Further complicating matters, auditors seemingly realized on the fly that the city's public records rules were so poor that the auditors couldn't even obtain basic documents for easily verifiable transactions, such as credit card payments.
"For 10 of the 31 transactions, City records included a note from the cardholder indicating that either a receipt was not obtained, was obtained but not retained, or was misplaced," state inspectors wrote. "Although City personnel did not explain why the other 21 receipts were missing, those receipts were likely missing for those same reasons."