County Commission Lack of Oversight Allows Clerk Finance Fiasco

Despite repeated warning to the County Manager and the Board on the critical changes created by the new Clerk in County Finance, nothing was ever done to demand an accounting of where the Board’s funding of the Clerk was being spent. Now more than a year after the changes, the County’s Comprehensive Annual Financial Report (CAFR) limped home under the wire, the external auditors comments will likewise do the same by June 30th, and the Board’s own Internal Audit contractors have noted numerous yellow and red flags in the operation of County Finance.

The Board budgeted over $600,000 in ‘contracted labor’ for the Clerk out of the $2.1 million appropriation with no idea what the money was paying for. Despite seeing numerous terminations and outsourcings in County Finance in 2011, 100% funded by the Board, never was the alleged ‘savings’ demanded back by the Commissioners. I have included an e-mail exchange between myself and the County Manager, which I know he had copied the Board and the new Clerk, in early 2011. I have included the link to the Internal Audit report (the link reads better than the paragraphs cut out), and the County Commission meeting in April, 2011, where I again raised the issue the Board had no idea what they were paying for.

In the same meeting, Mr. Needelman offered to look at Commissioner Fisher’s offer to allow him to unload County Finance to the Board. You’ll have the minutes and the link to the video, including my vehement objections and the new Clerk’s willingness to go along to get along.

Please note highlighting is mine.


Paid political advertisement, paid for and approved by Scott Ellis, Republican for Clerk of the Courts

-----Original Message-----
From: scott ellis[sellis@spacey.net]
Sent: Friday, February 11, 2011 6:00 PM
To: sellis@spacey.net; Infantini, Trudie; Tipton, Howard
Subject: RE: Clerk's Finance and County funded County Finance

I wish you well, Howard. You are paying for four positions now gone to the tune of about $300,000. Where do you think those funds are going, and if unspent, do you expect to get them back?

Clerk's Finance did not have four spare people. They had none. Perhaps one accountant could have been moved over, not four or five.

Good luck on checking the time cards.

I'm requesting the cost centers under FS 119. I'll also be requesting time cards as this progresses.

See if you can find another county with a Clerk's Office of more than 400 people working off the detailed equivalent of DOD time cards.

You can forward anything you choose of mine to Mr. Needelman. At least you cannot be fired for communicating with me.


---------- Original Message ----------------------------------
From: "Tipton, Howard"
Date: Fri, 11 Feb 2011 17:08:09 -0500

Hi Commissioner,

While it is a different way of operating to be sure, it is a common practice in smaller Clerk's Offices. There is nothing prohibiting the combination of duties that I'm aware of as long as the time (and related resources) is accounted for. They will need to make sure that they are properly accounting for time spent on the court and county side. Funds cannot be comingled. It is simply a time tracking item and properly paying the amounts from the right funding sources. I asked Alphonso to check with FLCCOC which confirmed my thoughts. It is also true that in Orange things were segregated, but remember that there was a separately elected Comptroller who handled the Board finances.

Wanting to be sure we're all on the same page with the changes in place, Stockton arranged a meeting this past Monday with the Clerk, his new Finance person, Alphonso, Stockton, and me. It was a cordial meeting and we shared appropriate Board and Administrative policies and our contact information if there were any questions. As we know, their success is our success and it was good for me to spend time with Mr. Needelman as I didn't know him prior to his election.

I will make sure the Clerk and his team are aware of the need to account for things appropriately and will suggest to him that he may wish to check with other Clerk's who have combined duties to ensure that he is following the proper reporting requirements. Certainly if there are operational issues that become apparent, our team will bring them up to the Clerk. So far I'm not aware of any issues. As to your specific questions about his plans, if it is ok with you I'll just forward those questions to the Clerk and let him respond.


Howard N. Tipton
Brevard County Manager

-----Original Message-----
From: scott ellis [mailto:sellis@spacey.net]
Sent: Thursday, February 10, 2011 5:22 PM
To: Tipton, Howard; Infantini, Trudie
Subject: Clerk's Finance and County funded County Finance

There should be no job sharing, we always kept the duties clearly delineated. I'm sure Howard will tell you they did the same in Orange County. The State through Article V pays for Clerk's Finance, you all pay for County Finance.

When I asked to have only a 10% cut it for Finance personnel for the County side, there was no mixing of funds.

It is critical you all figure out how he thinks he can run County Finance with his changes.

Good luck, Scott

Audit Executive Summary Report 4/18/2012

Executive Summary

During fiscal year 2011, the County experienced significant turnover in key positions of the Finance Department including the CFO, Assistant Controller, Accounts Payable Supervisor and others with key institutional knowledge. We noted issues around timeliness and review of cash account reconciliations, and remittance of unclaimed property during the Timekeeping and Payroll audit issued May 31, 2011. These issues and the turnover in the Finance department were considered in our risk assessment. The primary purpose of this cycle audit is to assess the timeliness, completeness, and review procedures of cash account reconciliations during fiscal year 2012. This cycle audit includes testing for compliance with the Clerk of Courts General Accounting Procedures Manual Section 6.A reconciliation completion and timeframe requirement. This report covers the first four months of fiscal year 2012, October 2011 through January 2012. Testing for this cycle audit of cash reconciliations took place during March 2012. A second cycle audit of cash reconciliations will be issued to the Audit Committee later in 2012.

Each issue is assigned a relative risk factor. Relative risk is an evaluation of the severity of the concern and the potential impact on operations. Items rated as “High” risk are considered to be of immediate concern and could cause significant operational issues if not addressed. Items rated as “Moderate” risk may also cause operational issues and do not require immediate attention, but should be addressed as soon as possible. Items rated as “Low” risk could escalate into operational issues, but can be addressed through the normal course of conducting business. The following is a high level summary of the major issues identified during our cycle audit of cash reconciliations. The details of these issues are included within this report.

1. Timeliness of Cash Reconciliation Preparation and Review: Clerk of Courts Finance General Accounting Procedures Manual Section 6.A states “Reconciliation is to be performed monthly, completed within 30 days after the close of the month.” Of the 4 selected months of bank reconciliations reviewed, we noted the following:

• The October 2011 cash reconciliation was not prepared until 1/7/2012, and not reviewed until 3/22/2012.

• The November 2011 cash reconciliation was not prepared until 3/19/2012, and not reviewed until 3/22/2012.

• The December 2011 cash reconciliation was not prepared until 3/22/2012, and not reviewed until 3/22/2012.

• The January 2012 cash reconciliation was not prepared as of our audit fieldwork dates.

Reconciliations quickly identify errors and needed corrections. If reconciliations are performed infrequently, errors and adjustments can go undetected, resulting in the need for significant corrections when the reconciliations are performed. Any reconciling differences should be corrected before the books are closed for the month end.

2. Transactions Identified but not Recorded - Through our review of the monthly cash reconciliations, we noted “unrecorded deposits,” “unrecorded debits,” and “transactions recorded in subsequent months.” Although these transactions were identified by Accounting they required further documentation/investigation to book the transaction into the General Ledger. All of these amounts represent cash transactions that occurred and posted to the bank in the month reconciled, but were not posted in the general ledger until after the month closed. The general ledger cash balance was not adjusted to reflect all activity during the month. In some cases, the delay in posting was up to four months.

3. Unclaimed Property: Florida Statute Section 717.113, states the following rule for unclaimed property held by governments: “All intangible property held for the owner by any court, government or governmental subdivision or agency, public corporation, or public authority that has not been claimed by the owner for more than one year after it became payable or distributable is presumed unclaimed.” We noted 19 outstanding checks that had not yet been remitted to the state, totaling $3,837.53.

Holders of unclaimed property can be subject to fines and interest penalties if the unclaimed property report and remittance are not submitted by the due date.

4. Petty Cash Checking Account Use and Reconciliation: County Administrative Order 22, Petty Cash and Change Funds, includes the following guidelines for the handling of petty cash funds, “The Fund Controller shall review the frequency of requests for reimbursement to see if there is a need to increase or decrease the fund. Request for reimbursement should be on a regular basis and not only at the end of the fiscal year. If fund is no longer used, it should be turned in.” Two departments’ petty cash fund checking accounts were replenished only once during 2010 and 2011, and appear to be under-used.

NeedleMen offer to sacrifice the Watch Dog April 4, 2011 Click on the April 4th, 2011, meeting. On the left click on agenda item VII.D.1. The video will begin and the full minutes appear side by side. Please feel free to watch the entire agenda item for a full flavor of how we are being sold out. Below is the verbatim.

Commissioner Fisher begins about 1:25

Commissioner Fisher begins again about 1:41

Scott Ellis begins about 2:08

(1) Chairman Fisher advised his concern is, because he keeps hearing about the shortfall, he feels bad for Mr. Needelman's organization having all these shortfalls; and advised the County would gladly take those functions back if that is something that Mr. Needelman could research and study for the County. Mr. Needelman stated he thinks if it is researched, there could be some kind of conclusion that would be satisfactory.

(2) Chairman Fisher stated one of the things that he thinks is important for the public to understand is that the reason he is asking for those services to be brought back in-house, is that by Charter the Board has to allow the Clerk to provide those services to the Board; the Board cannot demand for the Clerk to bring it back in-house, it is a request; it has to be release back to do that; he does not know if the public understands that, but the Board would have to go back and do a Charter change; and the Board is respectively asking Mr. Needelman to consider that.

Mr. Needelman stated there is nothing wrong with sitting down and looking at what options can be done in which to save money for the taxpayers; he has absolutely no problem with that whatsoever, as long as he meets his constitutional and statutory requirements; and he thinks it should be done in open dialogue, to see what services can be rendered in such a way to pass on savings.

(3) Scott Ellis stated he has listened to the comments, he has read the Agenda Item, and he is present today to warn the Board to be very careful with what it is doing with laws of unintended consequences, and not make any irrational reactions to an irrational action. He advised he heard Chairman Fisher's comment about the Board taking over County Finance and Clerk to the Board; it is a separated function, a check and balance under the State Constitution, and a Charter amendment would have to be done to do so; and he is surprised that a Clerk would actually agree to that, because quite truthfully, it is critical that those functions be separate from the Board.

Chairman Fisher stated Mr. Needelman could agree to it, though, correct. Mr. Ellis advised he would never agree to it. Chairman Fisher felt he knows Mr. Ellis, would not agree to it, but the Board could take over those functions. Mr. Ellis stated the Board would have to do it by Charter amendment; it would have to go by referendum; and it cannot just simply take those functions over. Chairman Fisher stated he knows the Board cannot take them over, but if Mr. Needelman wanted to offer it to the Board, he could. Mr. Ellis advised he cannot do so. Chairman Fisher inquired if Mr. Ellis is sure of that. Mr. Ellis responded he is absolutely positive; Attorney Knox would tell the Board the same thing; the Board will have to go to Charter amendment; and he inquired if he is correct.

Chairman Fisher inquired if the Board could take over those services, if he turned it over to the Board. Attorney Knox responded it certainly could be done by Charter amendment; and he is not sure if it could be done by interlocal agreement.

Mr. Ellis inquired if the State Constitution could be undone and it be done by interlocal agreement.

Attorney Knox responded the Constitution does not tell Mr. Needelman how to run his office; and if he can outsource to a private company, he may be able to do so by interlocal agreement.

Mr. Ellis stated those employees are still under his control, which is another legal issue,that they are not allowed to talk about.

Attorney Knox stated that is a different issue.

Mr. Ellis stated the fact is, the Board cannot; it is no different if the Board took over the Property Appraiser and he let the Board decide the value of properties; it can only affect the Board's side of the money, so that if $200,000 were taken, it can only come out of County Finance and Clerk to the Board; it is half way through the fiscal year and it is equivalent to taking $400,000 from Clerk to the Board and County Finance, that is the only place the Board can take the money; and stated he is not sure if the State money can be given to the Board for this. He stated he is going down the list of things the Board is talking about that do not make sense to him because it is trying to react in an environment that it should not be in, in the first place; the Board cannot take the functions; it can only take the money from itself, if it is done; and there could be another problem if the Board starts splitting off the retirees, because if it is going to do it for the Clerk, it will need to do it for every other Constitutional Officer; it will have to be separated because it is not going to be able to just separate the Clerk. He stated regarding the $200,000 Mr. Needelman owes the County, he hates to tell the Board, but he agreed with Mr. Needelman, and he thinks he does not owe the County one nickel; he reiterated he has argued this with the Board for years and years; every Commissioner has heard his arguments here that the billing situation is improper; it should only bill for active duty insurance cost to those people that are active duty; it should not be including the retiree subsidy in that billing; it should not be billing for people that do not take the insurance; and if it billed properly, it would not matter how many people who came or went, it would have no impact on the County’s, and it has set itself up for that. He stated he can remember one time at a Board meeting when Commissioner Bolin asked staff why there are billings for people who do not take the insurance; Commissioner Infantini is a CPA, Commissioner Anderson has done finance; when cost accounting is done, it has to try and do proper cost accounting because it is not proper cost accounting to charge those retirees to the active duty people and to bill the people that do not take it; and because the Board did not change it here, it cost 20-some people their jobs because it refused to change it. He stressed the Board really needed to step back and look at this situation and the proper thing to do would be to do the accounting on the insurance to charge based on how many people take that insurance. He stated he can tell the Board when he left office there was $300,000 carry forward, there was $300,000 in the Reserve Fund, $600,000 dropped out of the sky on an old legal settlement; if the Clerk takes the 18 to 20 percent cut in the fourth quarter, which is Senator Alexander's bill, that is about $700,000; had nothing been done since the first of the year, there was plenty of money to cover all those problems; the Board expenses do not fluctuate on a day-to-day basis; that is the most stable part of the entire Clerk's Office, is the Board, which is the most absolutely stable part of the entire office; when the Board money comes in, it pays for a certain number of employees who are fully-funded, and if there is too many or too less, the Clerk can come back to the Board in the following fiscal year; there have been times when more people were wanted in Clerk to the Board; there are times when SAP has come in and have reduced the number of people in Finance; but that is the most stable function in the entire office. He stated he does not know about the audit; he does not want to get into the audit issue, but the Board has every right to demand to know where its money has been spent this year; when he came to the Board last year, at budget time, he told the Board, if it gives the Clerk this much money, he told the Board what it would pay for by position, such as Fund Accounts, Accounts Payable, Supervisors, and Clerk to the Board; the Board has the right to know where its money had been spent year-to-date, and where it is projected to be spent until the end of the fiscal year; and he knows Mr. Jefferson has done something dealing with the State side, which is a morass if the Board gets into that; and he thinks the Board needs to get a strong handle on where its Board money is going to today, what has been spent to date, where it is being spent, and where it is projected to be spent.


From August 2008 ………..

Wolf Endorses Sheep for Watchdog

Mr. Needelman has proudly sent forth an 'exciting' endorsement of his campaign for the Clerk of Court by former County Manager Tom Jenkins. There's a little bit there about Mr. Needelman, but a good bit is what I consider a RINGING endorsement of Scott Ellis!

Scott Ellis, according to Mr. Jenkins, "has had a dismal record as Clerk of Court and has been a negative, disruptive force in County Government." With a County Government that has more than doubled property taxes during my term my only regret is I could not have been more disruptive. During my one hitch as Clerk with Mr. Jenkins the County can point approvingly to having the Charter Tax Cap wiped out (the Clerk's Office had to carry the ball), a $73 million parks bond issue which was SUPPOSED to pay for all of the parks became a complete fiasco, resulting in the County passing a second referendum to add another $83 million in the forlorn effort of still trying to finish the job. During the hurricanes Mr. Jenkins proffered up a $1 million contract deal for a friendly firm to watch the people who watched the people who picked up the hurricane debris. Since Mr. Jenkins left to become Chief Jenkins with the BCSO the Clerk's Office has continued to battle against millions of lost dollars on horrible land buys and more wastefully irresponsible spending year after year.

As for the supposed dismal record as Clerk of Court, Mr. Jenkins knows full well after my predecessor crashed the office the County had to front the Clerk's Office $600,000 to finish the fiscal year (which we repaid) and had a near total collapse of the Courts system. When we were able to restore the financial ledger and balance the books after the crash , Mr. Jenkins had our distributuon of ticket revenue audited by an outside accounting firm which found, disappointingly for him, the money was now correct and being distributed correctly. However, most distressing to Mr. Jenkins during the initial period of my office was our dogged pursuit of the truth on the Sarno Landfill fiasco, an effort pursued almost completely by myself as Mr. Jenkins had conveniently wiped out the County funding of the Audit function within weeks of my being sworn into office.

The County worked for over a year to sandbag our investigation of the Sarno Landfill until finally the facts became so overwhelming even the Commissioners had to call for an investigation. Mr. Jenkins, the County Manager, oversaw the rushed 'emergency' purchase of a parcel of land from sellers who literally bought it for $1 million in the morning and sold it to the County for $7 million in the afternoon. Confronted with the fiasco, Mr. Jenkins claimed no detailed knowledge of the deals working, yet while in Broward County one of the departments underneath him was solid waste. By the way, the parcel was almost immediately surplus and lies idle eight years later. As for other gifts that keep on giving, Mr. Jenkins masterminded the County construction of two golf courses (one a sweetheart deal for a developer) which still to this day continue to lose over a million dollars a year for the taxpayers.

At our Florida Today interview, Mr. Needelman constantly harped that the Clerk's Office was overdoing the Audit function at the expense of other areas. The Auditors comprise about FOUR full-time equivalents out of about 450 full-time equivalent employees in the entire office. If FOUR out of 450 is a gross over-focus, I expect we can plan on ZERO if we have a new Watch Dog on duty! I have no doubt if Mr. Needelman comes into office all 'disruptive' behavior will cease as the old County 'Go along to get along' mantra turns the watchdog function into a sheep roast.

Scott Ellis

And of course, this a paid political advertisement, paid for and approved by (BOTH of these are approved by) Scott Ellis, Republican, Brevard County Clerk of Courts. I too am proud to forward you the following exciting endorsement.


From: Mitch Needelman [mailto:mitch@mitchforclerk.com]
Sent: Monday, July 28, 2008 11:50 AM
To: mitch@mitchforclerk.com
Subject: Exciting Endorsement from Tom Jenkins

Mitch Needelman for Brevard Clerk of Courts
2317 South Bignonia Street
Melbourne, FL 32901

To my friends, family, and supporters.

With less than thirty days until our election I am proud to forward you this letter from Tom Jenkins. With the support of respected members of the community like Tom, his wife Barbara, and yourself I am certain that we will bring Positive Results to the Brevard County Clerk’s office.


Mitch Needelman
Candidate for Brevard County Clerk of the Circuit Court

To Barbara's and my friends,

The upcoming primary election in August includes the elected office of Clerk of Court. Many of you may be receiving early voting ballots now and casting your votes early.

I wanted to make you aware that I am strongly endorsing State Rep. Mitch Needleman for the position of Clerk of Court. He is running against incumbent Scott Ellis. As County Manager for 17 years I worked with Scott for many years. He has had a dismal record as Clerk of Court and has been a negative, disruptive force in County Government. Mitch Needleman will bring responsible management to that office, and improve coordination within the Criminal Justice system.

Because this race is an open primary, Republicans, Democrats, and Independents can all vote in this primary race. Please share this information with your friends and neighbors.

Tom Jenkins


Paid political advertisement. Paid for and approved by Scott Ellis, Republican, Brevard County Clerk of Courts.

This is a paid political electioneering communication. Paid for and approved by Linda McKinney 6025 Keystone Ave. Port St. John, FL 32927

This is a paid political advertisement. Paid for and approved by Linda McKinney 6025 Keystone Ave. Port St. John, FL 32927

This is a paid political advertisement. Paid for and approved by Linda McKinney 6025 Keystone Ave. Port St. John, FL 32927. No political candidate approved this advertisement.

This is a paid political disclaimer CYA. Paid for and approved by Linda McKinney 6025 Keystone Ave. Port St. John, FL 32927

For the idiots out there who will make a fuss because they're too stupid to think it through: This is a paid political advertisement. Paid for and approved by Linda McKinney, 6025 Keystone Ave. Port St. John, FL 32927. No Party Affiliation, Phantom Candidate for a Phantom (Does Not Exist: created by obamination's administration: not reality) District in Florida Near You! Now bite me. Morons.

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