Madeira Beach city marina has lost as much as $550,000 over three years, audit shows

Unauthorized discounts, under-billing and lax procedures have contributed to the losses in potential revenue.

An auditor found that the Madeira Beach city marina lost more than a half-million dollars over a three-year period due to improper discounts and billing. [Florida Beach Insider video]
An auditor found that the Madeira Beach city marina lost more than a half-million dollars over a three-year period due to improper discounts and billing. [Florida Beach Insider video]

MADEIRA BEACH — An in-depth audit of the city’s marina operations has revealed a loss of over a half million dollars in potential revenue, largely due to lax procedures.

Just days before the draft audit was distributed to city officials, long-time marina manager Dave Marsicano resigned, blaming a negative atmosphere caused by City Manager Jonathan Evans and the City Commission.

Marsicano had operated the marina for 17 years, including during the 2015-2018 period when forensic auditors said inadequate procedures led to the lost revenues.

The marina is run by five full-time employees and has a $2.4 million annual budget.

The forensic audit was recommended last year by the city’s regular internal auditor. A subsequent evaluation by the city’s finance staff revealed gaps in inventory and record keeping, according to city officials.

Evans then hired a forensic auditing firm, Carr, Riggs and Ingram to perform the deeper three-year review of marina operations.

CRI is among the top auditing firms in the country and currently audits 19 out of the state’s 67 counties and 41 cities including Largo, Gulfport, and Treasure Island, as well as the Pinellas County school system.

Madeira Beach paid CRI $50,000 for the audit.

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The firm’s final report, released publicly to the commission during its Jan. 22 workshop, found the city had implemented only “limited oversight” of marina operations and numerous instances of lax procedures CRI said contributed to a potential loss of $550,000 over the three-year period.

The largest amount of estimated losses was over $327,000 the auditors attributed primarily to unauthorized fuel price discounts.

However, the conclusion that the commission had never authorized the discounts may have been in error, according to one resident who said they were in fact authorized by a previous commission in 2002. If true, then potential revenue losses would have totaled about $220,000.

The remainder of the losses was attributed to improperly billed wet slip and dry storage fees, overbilling by fuel suppliers, and under-billed launch ramp fees.

“I am a firm believer in audits as a management tool, but the idea of us losing $550,000 is preposterous,’’ Marsicano said. “If they had spent more than 10 minutes with me I could have accounted for every nickel. Clearly their mission was to impugn my reputation.”

Marsicano said the administration was “on a mission” to end his career in retaliation for his testifying against Commissioner Nancy Oakley in a state ethics investigation that culminated in her being fined $5,000 and recommended for a public reprimand by the governor.

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CRI auditor Glenn Gillyard’s report particularly cited the “tone at the top” set by the then-city manager, Shane Crawford, that affected the marina management staff.

“It further appears that the marina has disregarded the city’s purchasing policies and procedures on a routine basis,” the audit report states, adding that this disregard “likely stems from a lack of training … as well as the ‘tone at the top’ set by the former City Manager Shane Crawford and the marina management.”

The auditors noted that the current city management has made efforts to review and revise the marina’s operating policies and procedures.

The auditors’ recommendations included improved employee training, instituting stronger financial controls, surveillance cameras, holding employees accountable, and setting an “ethical tone.”

“I don’t see anything that rises to the level of criminal offense,” said Gillyard, when questioned by the commission. “This does not appear to be a criminal matter.”

The city has already received a reimbursement of over $27,000 for overbilled fuel expenditures.

Evans said the city administration is already working on many of the auditors’ recommendation and will present a comprehensive plan to restructure marina operations in late February.

“In a six- to eight-month period, we will be in a substantially better shape than we are today,” Evans said.

This article was originally published in the Tampa Bay Times on Jan. 31, 2019.

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Mullane Estrada is a correspondent for the Tampa Bay Times.