Auditor presents clean FY2024 opinion; commissioners press firm over vendor payments and missing engineering contract

James Moore & Company partner Zach Shallow Ford presented an unmodified audit opinion for Melbourne Beach’s fiscal year ended Sept. 30, 2024, to the Town Commission during an April 30 workshop, but several commissioners pressed the auditors over town payments to an engineering firm that, they said, were made without a written contract.

Ford told commissioners the audit’s “core objective is to issue an opinion on the accuracy of the financial statements,” describing the engagement as a financial‑statement audit performed under AICPA and U.S. Government Accountability Office (GAO) standards and the Florida Auditor General’s rules effective September 2024. He said the firm obtained “reasonable assurance,” identified three post‑trial‑balance adjusting entries (sales tax and utility tax timing adjustments and a pension entry), and issued a clean (unmodified) opinion.

The exchange became contentious when Mayor Lisonbee Dennington and others raised a longstanding procurement concern: they said the town had paid an engineering firm (referred to in the meeting as BSC/VSE) approximately $350,000 over several years without a formal contract required by local code (Town Code Chapter 15) and Florida procurement law (Florida Statutes section 287.055). Dennington said she had repeatedly requested the contract and only recently obtained it. She asked whether the payments and the absence of a contract should have been identified as an internal‑control weakness in the audit.

Ford responded that the engagement was a financial‑statement audit, not a procurement or forensic audit, and that auditors design testing based on risk, internal controls and materiality. He said auditors perform sampling and target testing of major expenditures and restricted funds; if a procurement deficiency is pervasive and would have a material effect on the financial statements, it would be reported as a material weakness or in the compliance/internal‑control report. Ford said he had performed targeted follow‑ups and noted that in recent years payments to that vendor were about $15,000 in fiscal 2023 and roughly $40,000 in fiscal 2024, adding that the $350,000 figure Dennington cited covered multiple years.

Commissioners and the mayor pressed for more specific follow‑up. Dennington said the absence of a contract for a repeatedly used town engineer should have prompted disclosure or at least a management comment; she said she had taken the matter to the town attorney and, separately, to the state. Ford said that when an issue is brought to the auditor’s attention during the engagement, the auditor will follow up, request supporting procurement documentation and expand testing where appropriate, and he agreed to provide the commission an export or summary of the documents the audit team requested and received through the firm’s client portal.

Ford also described other audit findings and context: Melbourne Beach received three adjusting entries after the final trial balance; the town’s unrestricted general‑fund reserves equated to roughly nine months of expenditures (about $3.0 million), which he described as “healthy given the town’s size”; pension disclosures and an allocated share of the Florida Retirement System liability were included; and no items rose to the level of material noncompliance or material weaknesses reported in the audit and related management letter. He explained single‑audit thresholds and ARPA (American Rescue Plan Act) guidance, noting the federal single‑audit threshold is $750,000 and that earlier ARPA guidance allowed a de minimis standard allowance for smaller recipients.

The commission asked for and received several commitments: the audit firm said it would provide the commission with an export or screenshot of materials submitted into the audit portal showing the documents requested and provided; commissioners said they will review the audit workpapers and may pursue further inquiry if needed. No formal audit‑related findings were changed during the meeting, and the auditors stood by the issued unmodified opinion.

The meeting ended without substantive votes on audit actions. A motion to adjourn passed.

Next steps noted at the workshop included follow‑up by staff to distribute the audit request list and portal export from the firm and continued internal review by commissioners. Mayor Dennington indicated she intends to communicate the town’s concerns about procurement to state oversight bodies.