Pension issues raise questions about auditor

The day after hearing a presentation on an audit of the city’s finances, Commissioner Susan Chapman got a call asking if she missed the $30 million error.

The call was distressing. One, because she had missed the error, but also because $30 million is a lot of money. She went back to the Comprehensive Annual Financial Report produced by consultant Purvis Gray and Co. LLP.

On page 235, she found the problem. There were “material weaknesses” related to the city’s three pension funds — an accounting term used to describe a situation in which there is a reasonable possibility that staff will not prevent, detect or correct an error within financial statements.

Two material weaknesses within the city’s general employees, police and firefighters pension plans required adjustments of $30.7 million during the audit, the report said. For Chapman, the discovery was discomforting.

“No money was lost — it was an accounting error,” Chapman said. “But it’s a $30,671,000 accounting error.”

Chapman brought up the topic at Monday’s City Commission meeting. City Auditor and Clerk Pamela Nadalini attributed the errors to the work of an individual employee. Nadalini said the report was concerning to her, as well, but said this was the first time the pension plans had these kinds of material weaknesses, as far as she was aware.

“This was not representative of the overall operations,” she said. “This was representative of the individual keeping sloppy bookwork.”

The employee is currently on administrative leave; Nadalini said she relieved him of his duties for performance issues. Chapman said the employee raised concerns about Nadalini creating a hostile work environment before his departure. She said similar concerns arose when the city examined problems with its Information Technology Department in 2015, then under the supervision of the city auditor and clerk.

Nadalini disputed any negative characterization of her office.

“Maybe we have some professional disagreements, but certainly, by no means is it a hostile work environment,” she said.

Nadalini said her office was putting procedures in place to address the errors mentioned in the financial report and agreed to update the commission on those procedures at a future meeting. City Commissioner Suzanne Atwell said the city needed to thoroughly explore its options for strengthening its pension management.

“I think we have a crisis of confidence within the pension system right now, and we need to figure out what to do about it,” Atwell said.