JLAC Progress Report | City of Mexico Beach

It has been 30 days since our initial response to the Joint Legislative Audit Committee (JLAC) audit findings. I want to take this opportunity to share the results of the audit meeting and provide a progress report on the changes we’re making to address the findings.

At the 2/10/25 JLAC meeting, the audit results were presented by the Inspector General’s office to JLAC. The questions we were asked tended to focus on turnover in key positions and ensuring policies and procedures weren’t lost due to turnover.

Rep. Yarkosky asked the IG representative “…does the Sheriff get a copy of [the audit report] to determine if there’s anything criminal?” The auditor replied “we didn’t see any indications of fraud, if we see something that looks really questionable we’ll often send a copy of the report to the State Attorney or [Florida Department of Law Enforcement], in this case I don’t believe we did and the report is publicly available on our website.”

With that statement on the record, we are continuing our focus on fixing the procedural issues that were uncovered and highlighted in the audit findings and recommendations. Specifically:

Recommendation 1: To promote efficient operations, deliver high-quality services to residents, and consistently apply City policies and procedures, the City should develop policies and programs that foster a positive work environment and promote stability in key management positions.

The previously challenging environment caused by tensions among administrators, clerks, accountants, and council members has been resolved. The new City Administrator, who started on 10/14/25, maintains a strong working relationship with the Council and key staff. Additionally, a Finance Director was hired a month later to oversee financial operations. The City Administrator is also developing the framework for a monetary performance reward system starting with the next budget cycle.

Recommendation 2: The City should enhance efforts to comply with State law and ensure that annual financial audit reports and AFRs are timely completed and filed with the Auditor General and the DFS.

All previous audits have now been completed, bringing Mexico Beach up to date. The audit for the most recent fiscal year is set to commence at the end of March and will be completed by the June deadline, pending the expected approval of the renewal contract for the auditor, James Moore, by the City Council.

Recommendation 3: The City should enhance procurement policies and procedures to ensure competitive procurement of goods and services in accordance with City ordinances, maintenance of records to evidence all aspects of competitive procurements, including advertisements, RFP responses and quotes, and bid tabulation forms.

A new checklist has been developed and is actively being used to ensure all required paper and electronic documentation is obtained and retained. This checklist requires multiple levels of approval to ensure full completion.

Recommendation 4: City personnel should obtain and document City Council approval for all purchases exceeding $10,000, as required by City ordinances, use purchase orders for purchases of goods and services exceeding $20, in accordance with City ordinances, prior to payment goods and services, document verification that goods or services were satisfactorily received in accordance with contract and purchase order terms.

The existing framework for this policy is in place, but previously, the absence of a dedicated Finance Director and frequent changes of the City Administrator resulted in inconsistent enforcement. Now, with a Finance Director in position, purchasing regulations are being strictly followed and monitored.

Recommendation 5: The City should follow its ordinances by issuing purchase orders for all purchases, contracts, and agreements for work or service and establish policies and procedures requiring invoices be matched to purchase orders and invoices be canceled at the time of payment to prevent incorrect and duplicate payments.

A new purchasing and procurement policy was implemented in 2024 to address these concerns. Additionally, a new Purchase Order form has been introduced, requiring Department Head confirmation that funds are available in the existing budget. The Finance Department is developing a periodic verification process to spot-check purchases for compliance. In addition, for all checks over $3,000, a new process has been added to cross-reference the check with the vendor history and invoices.

Recommendation 6: The City should establish policies and procedures for determining whether workers should be classified as employees or independent contractors and document such determinations. In addition, the City should enhance agreement monitoring controls to ensure that a valid agreement is properly executed prior to payment and that payments are consistent with agreed-upon compensation terms.

We are in the process of finalizing a policy that defines criteria for classifying independent contractors versus employees. Additionally, the project management component of our financial software is now being utilized to automatically close contracts upon expiration, ensuring no additional payments occur without executing a new contract.

Recommendation 7: City management should enhance procedures to ensure that users are restricted from performing incompatible functions or functions outside their areas of responsibility. Such enhancements should include establishing procedures for authorizing user access and the performance of periodic evaluations of access privileges granted within Springbrook, including the access privileges granted to groups, to verify that the privileges are necessary and appropriate for each user’s assigned responsibilities.

User management in our Springbrook financial software has been transferred to the new Finance Director. Access requests, including levels of functionality and roles, must now be justified based on job title and duties and require approval from both the Department Head and the Finance Director.

Recommendation 8: City management should enhance controls to ensure that Springbrook user access privileges are promptly removed when a user separates from employment or when access to Springbrook is no longer required.

The new hire and termination checklists have been updated to include computer system and software access controls. Additionally, an annual review will be conducted by the Finance Department to ensure compliance with these procedures.

Recommendation 9: The City should develop and implement anti-fraud policies and procedures to aid in the mitigation, detection, and prevention of fraud.

Anti-fraud policies and procedures are being developed. Training from the City’s insurance carrier is available and will also be used. All employees and elected members of the City Council are now required to take annual training on our fraud policy as well as recognizing fraud, cybersecurity, and harassment in the workplace.

We are committed to continuing the implementation and monitoring of the changes we’ve made to address the recommendations. We have made significant progress in promoting a positive work environment, ensuring compliance with State law, enhancing procurement policies, and strengthening financial management.

Our new City Administrator and Finance Director have played crucial roles in fostering stability and enforcing regulations. We will continue to build on this momentum by finalizing policies for classifying independent contractors, enhancing agreement monitoring controls, and restricting user access to incompatible functions.

Additionally, we are developing anti-fraud policies and procedures, providing annual training for employees and City Council members, and conducting regular reviews to ensure compliance. As we move forward, we will closely monitor our actions and make adjustments as necessary to ensure that we are delivering high-quality services to residents while maintaining efficient operations and adhering to City policies and procedures.

The full JLAC meeting video is available at 2/10/25 Joint Legislative Auditing Committee – The Florida Channel