Lauderhill City audit finds hundreds of thousands in untraceable gift cards, urges stronger grant controls

Lauderhill City commissioners on June 30 heard a forensic review from Perry Forensics that identified significant recordkeeping gaps and compliance risks related to a roughly $3.875 million federal grant and related foundation funds, including the purchase of gift cards whose distributions the city cannot fully document.

The Perry Forensics lead told the commission the firm performed a full review of the records supplied and conducted interviews with staff and contractors. The presentation said the firm reviewed the bid and expenditure paperwork, more than 20,000 emails, and material recovered from a grants-staff laptop. "There was not ... sampling done. It was a 100% of what we were supplied that we reviewed," the auditor said.

Why it matters: the report attributes the problems primarily to fragmented oversight, delayed reporting and inadequate record retention in the city's grants operation; the firm said those shortcomings cost the city recoverable federal funds and created compliance exposure under the grant terms.

Key findings and figures

- Scope: Perry Forensics said the grant budgeted $3,875,000 in project funds. The firm reported that only about $2.9 million was expended from the authorized amount and that reporting delays and reimbursement timing forced the city to advance an estimated $1.6 million in funds.

- Lost interest: the presentation said delayed reporting and late reimbursements cost Lauderhill an estimated $80,000 in forgone interest that could have accrued if funds had been handled more promptly.

- Gift cards: the auditor reported the city purchased roughly $256,000 in physical and virtual gift cards to incentivize vaccination and surveys. The firm said a substantial portion of those cards cannot be tied to named recipients: "they are basically untraceable," the presenter said, and cited figures in the presentation noting an amount reported elsewhere in the slide deck of approximately $226,000 in anonymous/untraceable gift cards. The firm told the commission it could not provide 1099 tax reporting to recipients because it lacks recipient identities.

- Vendor deliverables and documentation: contractors and vendors (named in the report as Nova/Nova Southeastern University, SA Nelson and Comcare Medical Center) provided some material and spreadsheets, but the auditor told commissioners the recovered files did not always satisfy the full set of federal reporting elements. For example, the firm said Comcare provided spreadsheets and mileage logs showing activity and payment, but not complete, computerized patient or vaccine lot records that would show who received vaccines and whether they were Lauderhill residents.

Responses and exchanges

Commissioners pressed the auditor on several points: Vice Mayor Campbell and other commissioners asked whether the LHPP-related funds were segregated and whether LHPP was a registered nonprofit; the auditor said monies were deposited into city accounts and that the firm reviewed inflows and outflows but could not always determine why the grants division had been moved between departments. Commissioner Dunn emphasized that the HHS (COVID-era) grant administered by city staff is distinct from LHPP-funded programs and asked the auditor to note that distinction on the record; the auditor agreed.

On contractor performance, the auditor said some contractor reports were recovered from the grants laptop (the report references digital deliverables recovered in the review) but also noted that "not all required reporting elements were satisfied" and that the firm could not always verify the community impact of some studies or deliverables.

Auditor’s tone and conclusion

Perry Forensics did not allege criminal activity; the presenter repeatedly told commissioners that while controls were weak, the firm found "no ill will" and did not identify evidence of criminal intent in the reviewed records. The firm recommended the city adopt a written fraud-risk program for federal grants, standardize recordkeeping, secure inventory custodial controls (including keeping gift cards in a safe and signing them out), segregate future grant accounts, and implement eight corrective actions outlined in the report.

Next steps and city response

Commissioners thanked the auditors for the report and said the city will act on several recommendations. Multiple commissioners noted that the grants function has since moved back under the finance department to increase oversight; members said they will work with the city manager to implement the firm's recommendations, explore centralized bank accounts for grant funds and improve backup and custodial procedures so records are not lost to single-device storage.

Quotes

"If someone said to you today ... do you know who got those gift cards? Only a fraction of the individuals that got them would be known," Perry Forensics said during the presentation, describing gift-card tracking as effectively like cash.

Quoting a grants employee the auditor interviewed, the presenter said the employee reacted on seeing recovered documentation: "Oh my god. This doesn't even come close to meeting the requirements," the auditor told commissioners he was told by that employee.

Limitations

The auditor, and commissioners in questioning, cautioned that missing or incomplete records and departed staff limited the investigation's ability to answer every question (for example, the firm said it could not always verify vaccine lot or storage records from vendors and did not interview every possible person). Where figures in the presentation (for example, amounts described as "1.6" or slide-derived totals) lacked on-the-record supporting detail during the meeting, the auditor said the report's exhibits and attached recovered files will be provided to the city manager for follow-up review.

What to watch for

City staff and the commission said they will review the auditor's exhibits, continue follow-up with contract vendors, and implement recommended controls. Commissioners said they will report back on specific follow-ups in subsequent meetings or workshops.

Ending

The commission closed the special meeting after the presentation and public questioning, thanking the auditors and city staff for their cooperation; the report and accompanying exhibits were left with the city manager for further action and review.