SRWMD kept money from Florida for “routinely anticipated budget shortfalls”

Where does the buck stop for these “routinely anticipated budget shortfalls”? Who let a budget include those? Isn’t the point of a budget to, well, budget for what’s needed? Or, given the history of deliberate downsizing of environmental agencies in Florida, maybe shortfalls were the point.

Noah Valenstein
Noah Valenstein got the job as secretary of the Department of Environmental Protection on Tuesday May 23rd, on a unanimous vote by Gov. Rick Scott and the Cabinet. His previous job? Executive director of the Suwannee River Water Management District, which was flagged by state auditors for $22.5 million in “questionable costs”. The audit covered the time Valenstein led the district. He oversees the district in his new job. [Special to the Times]

Mary Ellen Klas, Miami Herald-Times Tallahassee Bureau, 14 July 2017, Auditors find millions in ‘questionable costs’ at water district,

Weak budgetary controls led to $22.5 million in “questionable costs,” auditors found. Officials had transferred $13.3 million of it into the district’s operating account without proper authority. They may have overspent some areas of the budget and directed money to other areas to make up for shortfalls. They set aside $3.8 million “in the event of an economic crisis” without authorization, and they steered $1.7 million “to cover routinely anticipated budget shortfalls” without explanation.

Contingency funds, sure, but “routinely anticipated”? And in an economic crisis, wouldn’t it be the legislature that should be authorizing funds?

Auditors concluded that accounts were “misclassified because district personnel misunderstood” standard accounting requirements and budget staff members were “somewhat new to the process” so they couldn’t explain how and why it happened.

That is what happens when a state massively defunds its environmental agencies and makes political tests and servicing economic development more important than competence. The article goes into that, rightly pointing a finger repeatedly at Governor Rick Scott, who said “ensuring that Florida’s precious water resources are protected and managed in the most fiscally responsible way possible” while:

The five districts, whose boards are appointed by the governor and operate under the oversight of the Department of Environmental Protection, were purged of hundreds of veteran professionals, and budgets were cut in half. They continued cutting their budgets through 2016. Suwannee, because of its small size, had proportionally fewer cuts.

The article discusses and quotes SRWMD staff, with some pretty amusing tidbits, including this one from “Roary E. Snider, the district’s chief of staff”, who

also disputed the auditor’s claim they don’t have documentation. “While we absolutely will provide these records, these documents were largely in hard copy,” Snider said. “Staff couldn’t assemble these additional records in time.”

SRWMD staff don’t know how to use a scanner? Or they didn’t know where they put those paper documents? Or maybe the dog ate them.

The article even quotes Eric Draper of Audubon Florida about “problems we’ve seen at the Suwannee River district with the change of leadership over the years,”. If Audubon Florida “works closely with the water management districts”, what did Audubon Florida know, when did they know it, and why are they only speaking up now?

The actual audit report lists on page 2:

Executive Director
Noah Valenstein from October 13, 2015
Carlos Herd, Interim, from May 14, 2015, to October 12, 2015
Dr. Ann B. Shortelle to May 13, 2015

The article mentions that:

The district is overseen by the Florida Department of Environmental Protection, which is now headed by Noah Valenstein. His last job was executive director of the Suwannee River WMD during the time the audit was underway.

Guess which fox the foxhouse is turning to for assistance:

The district said it would turn to the Department of Environmental Protection for advice on how to resolve the dispute over whether money is owed to the state.

“DEP has communicated with staff at the Suwannee River Water Management District, and they have informed us that they are reviewing accounting and land acquisition records for additional information,” said Lauren Engel, spokesperson for Valenstein.

“If it is determined that these funds should be returned to DEP, they would go to the trust fund from which the funding was issued, however, DEP would require spending authority from the legislature to use it.”

This is the same Noah Valenstein who told me shortly after he was appointed to SRWMD that he believes that Florida law requires him and SRWMD to provide water resources for economic development. Maybe he should have paid more attention to making sure the economic resources of the District were properly organized.

The Miami Times-Herald story as carried by (Tampa Bay Times) has a bit more pointed headline and picture caption (see top of this blog post), Auditors find millions in ‘questionable costs’ at water district, but will it matter?

Neither the Miami Times-Herald or mention Ann Shortelle, but OSFR does: Jim Tatum, Our Santa Fe River, 14 July 2017, SRWMD Audit Finds Problems,

Ann Shortelle
Ann Shortelle, former Executive Director of the district

In case you’ve forgotten where she went and under what circumstances, Kevin Spear, Orlando Sentinel, 12 May 2015, St. Johns water district pursues new leader,

On the heels of a purge at Central Florida’s water agency, its board voted Tuesday after testy and chaotic debate to pursue hiring the chief executive of another state water agency.

Several board members at the St. Johns River Water Management District, which spans from the Orlando area to Jacksonville, indicated they would immediately hire Ann Shortelle, executive director at the neighboring Suwannee River Water Management District.

But a majority of the nine-member board voted to delay any vote on offering Shortelle the job until an emergency meeting scheduled for May 21 because several of the board had little idea of her qualifications.

“I’ve never met her, nor has her resume been sent to me,” said Maryam Ghyabi of Ormond Beach. “I don’t even know if she is here.”

The St. Johns water district lost four top managers last week to resignations that have remained unexplained but are widely suspected to have been ordered by Gov. Rick Scott’s environmental managers. Two of the managers said in their resignation letters they were quitting rather than be fired.

The departures of the four had been preceded by the resignation in March of the district’s executive director, Hans Tanzler, who left his post May 1.

Mike Register, acting director, said he accepted the resignations of the four executives on his sole authority and without guidance from board members or the Florida Department of Environmental Protection. Register started working as the director less than a week before the executives left.

Almost immediately, rumors and speculation pegged Shortelle as the choice of DEP Secretary Jon Steverson, though his spokeswoman had denied that the secretary has played any role.

Purge at SJRWMD? Why does that sound familiar?

Gross, executive director of the Florida Defenders of the Environment, held Register’s job until shortly after he declined in June 2014 to change a water-supply plan to show that there was plenty of the wet stuff left for anyone who wanted it.

“They didn’t want it changed because there was anything inaccurate or wrong with the plan — it was purely 100 percent political,” said Gross, a licensed geologist who was let go shortly after a confrontation with his bosses.

Yep, same Mike Register, SJRWMD interim executive director who accepted staff resignations, and now SJRWMD division director of Water Supply Planning under new SJRWMD E.D. Ann Shortelle.

Speaking of water supply plans, both Valenstein and Shortelle were present when both the SRWMD and SJRWMD boards voted in January 2017 to adopt a North Florida Regional Water Supply Plan (NSRWSP) over strenuous objections from many environmental organizations, including WWALS. Maybe NFRWSP was the water supply plan over which Jim Gross resigned from SJRWMD.

And maybe they believe if they can just reclassify water and make enough for economic development, they can reclassify funds, too….

At SJRWMD under Financial information, Processes ensure accountability,

The St. Johns River Water Management District strives to ensure accountability to Florida’s taxpayers.

The district employs multiple layers of checks and balances to hold the agency and its employees to the highest standards of financial responsibility. The district’s Governing Board oversees development and implementation of a budget that focuses on the district’s core missions.

Yet I don’t find anything about an audit committee or a finance committee for SJRWMD. If somebody wants to compare the kinds of things found at SRWMD with SJRWMD documents, here are the SJRWMD budget and financial statements. SJRWMD refers people to a state search form for audit reports.

Before listing Executive Directors, the audit report lists the board members from “October 2014 through March 2016”:

Board Members
Donald J. Quincey, Jr., Chairman
Alphonas Alexander, Vice Chairman
Virginia H. Johns, Secretary/Treasurer from April 14, 2015 a
Kevin W. Brown
Dr. George M. Cole to March 1, 2015 b
Donald Ray Curtis III to March 1, 2015, Secretary/Treasurer a, b
Gary F. Jones
Virginia Sanchez
Richard Schwab from April 13, 2015 b
Bradley Williams from April 13, 2015
Guy N. Williams to August 19, 2015 c

a The Secretary/Treasurer position was vacant from March 2, 2015, to April 13, 2015.

b The Board Member position was vacant from March 2, 2015, to April 12, 2015.

c The Board Member position remained vacant from August 20, 2015

In that audit report and On SRWMD’s own web pages, I see no indication of a board finance committee. They do show an audit committee that has been meeting since 2013 (the state requires an audit every five years), but no indication of who is on it.

Of the nine members of the SRWMD board, six have been on the board since before the audit committee started meeting, including all of the board’s officers. Did they never notice these financial irregularities? Were they not visible in the SRWMD budget documents? On the one hand, Florida Governor Rick Scott appoints the board. On the other hand, the board hires the staff.

Where does the buck stop?

 -jsq, John S. Quarterman, Suwannee RIVERKEEPER®

You can join this fun and work by becoming a WWALS member today!