Audit: Lee County Port Authority making great strides in tightening controls since scam, arrests

The latest audit of the Lee County Port Authority shows big steps toward addressing a host of financial and operational concerns.

Under new leadership since November 2019, the authority has resolved most of the lingering issues raised by the county's inspector general. 

Those concerns included missteps that opened the door for a fraudulent pay scheme involving the agency's outside contractor for janitorial services.

The scheme cost the authority more than $1 million, said Lee County Clerk of Courts Inspector General Tim Parks.

Previously:Lee County Port Authority fires company caught in alleged pay scandal

More:Lee airport payroll scandal losses reach $1 million, auditor says

The airport authority, owner and operator of Southwest Florida International and Page Field, has since recovered much of its losses and permanently replaced its problem contractor, Triangle Services of Valley Stream, New York. 

Unlike the previous contract with Triangle Services, the new one has a fixed price and does not depend on the resources used or time taken, but rather on the work required for the size of the job.

Triangle Services received payment on a cost-plus basis. The company got paid for every hour its employees spent on the job, plus an additional $2.03 for every hour worked for a profit, providing an avenue to make money on fake timesheets for fake — or "ghost" — employees.

With Triangle Services, 80% of the contract cost consisted of employee pay. 

"The port authority was paying the company for all those hours that nobody was working and that was the whole fraud," Parks said.

In case you missed it:10 charged with racketeering, fraud after scamming Lee County Port Authority

After uncovering the scandal in an investigation prompted by anonymous tips of potential fraud, waste and abuse a few years ago, Parks made a series of recommendations to the authority on how to remedy the situation — and to keep it from happening again.

The latest quarterly audit shows the airport authority has fully implemented all of Park's recommendations on that front, negotiating a new five-year, joint venture cleaning contract with SP+ and Diverse Facility Solutions, known for short as DFS. 

"They've taken care of everything," Parks said. "They got a new contract and recovered about $900,000, out of the money we believe was taken." 

The contract with the new joint venture took effect May 1. 

The port authority recovered more than $849,000, or about 90% of its losses, from Triangle Services in a settlement. The agency has or expects to collect restitution from most of the fraudsters, with help from the Florida Department of Law Enforcement, which investigated — and made a handful of arrests — in the criminal case.

According to court records, agreements for restitution, totaling more than $242,000, came through plea deals reached with state prosecutors. 

A handful of the defendants have taken plea deals in the case, in exchange for probation. Some have agreed to testify against their co-defendants at trial.

Court records show trials for the case are scheduled for August and September.

A trial for Fort Myers resident Thomas Brennan, 73, who is accused of organizing the crime as the former site manager for Triangle Services in Florida, is scheduled to start Sept. 23.

According to state prosecutors, Brennan is the one who falsified the timesheets submitted to the port authority, funneling money to his codefendants, while keeping some of the stolen funds made in the scam for himself.

Gretl Plessinger, a spokeswoman for the Florida Department of Law Enforcement, declined to comment on the status of the case or individual defendants. 

"The case remains active in the court system. We aren’t able to discuss it at this time," she said in an email.

Previously:Southwest Florida International Airport sees stunning recovery from pandemic

Since taking over as executive director at the airport authority, first temporarily then permanently, Ben Siegel has put more resources toward making sure the many risk-reducing recommendations the auditor general has made are acted upon swiftly.

"There was kind of a logjam. The logjam is breaking and we think he's been a part of that," Parks said, crediting Siegel. "That's my opinion."

The pandemic slowed the momentum a bit, but it's gained steam again as the health crisis has eased, and operations have returned to normal, Parks said. 

In fact, he expects most of the outstanding issues to be resolved by September, when he'll release his next quarterly audit report on the port authority, which he anticipated will be much shorter.

"Hopefully, most of these lines will say that management has completed the recommendations," Parks said. 

The outstanding issues are seen as potential risks that need to be remedied to avoid future problems.

"Auditing is all about trying to ensure that everything is OK," Parks said. "It's not trying to find problems and say 'gotcha.'" 

In a statement, Siegel said: "The port authority welcomes the audit of our policies and procedures. It is a collaborative effort."

The effort, he said, ensures the authority is doing everything it can to "operate efficiently and effectively within internal guidelines."

In response to more recent recommendations from Parks, the port authority has improved its project oversight to limit change orders and to prevent unauthorized work and increased its tool inventory checks to avoid theft and unnecessary or questionable purchases by employees.

Many of the recommended changes the authority is still working on will be implemented with the roll-out of time clocks and new policies and procedures for timekeeping, including improvements on how overtime and paid-time-off are approved and tracked for its employees.

"We're looking for more automation," Parks said. "There's always a risk when you have manual entries."

Describing it as an "IT project," he said such big operational changes do take time. 

One observation from one pay period in 2019 showed all overtime lacked pre-approval at Page Field, a situation that won't be repeated under the new policies.

The authority is working to tighten up its purchasing policies in a number of ways.

Changes will include a prohibition on splitting transactions, which allows the authority to avoid taking purchase orders to the Board of Port Commissioners for approval. The board must approve purchases greater than $100,000.

New controls will prevent employees from reviewing and approving their own p-card, or commercial credit card, transactions, with more oversight from their higher-ups and the finance department.

By the way:Ethics complaint against Fort Myers Police Chief Derrick Diggs faces dismissal

The inspector general has also recommended new safeguards involving former employees, which the port authority is working aggressively to implement.

Former employees have been able to access critical resources after their departure, including the authority's computer network, posing security threats. Some have not turned in their employee badges until days after their separation, which could have made it easier for a disgruntled one to return to work for revenge. 

In response to those concerns, the port authority put together a team of employees from IT, maintenance administration and aviation security and technology to develop what has been described as the "most secure, efficient and error-proof method of off-boarding."

One important improvement that's already resulted from the initiative is the human resources director or senior manager now has the ability to immediately shut down all systems access for departing employees.

Resolving this security issue has been a top priority for the port authority.

"It will be a risk until the gap is closed and they're working on it," Parks said. "It doesn't mean that anything bad happened. That's what we do is we point out potential risk."