Florida Keys tourism agency under scrutiny for possible money mismanagement. What to know

A report from Monroe County’s top auditor this week found numerous examples of financial mismanagement, possible double billing by a contractor using a nonexistent company and “potential self-dealing” by some staff of the Florida Keys agency that’s funded by tens of millions of tourism tax dollars.

The findings in the 32-page Oct. 31 report, obtained by the Miami Herald, were so concerning to investigators that the Monroe County comptroller ordered the county’s finance department to immediately cease paying certain contractors that help run the Monroe County Tourist Development Council.

The TDC, as it’s known in the Keys, was created in the 1980s to promote Florida Keys tourism. The public agency has a multi-million dollar annual budget and contracts with an advertising firm, a public relations firm and a group of photographers and production crews.

If you’ve seen a TV commercial advertising the allure of the Florida Keys, it was almost certainly funded and produced by the TDC and its contractors.

The agency makes its money from hotel room and short-term rental revenue. From October 2022 through September 2023, the county collected $58.9 million to support the TDC’s operations, Kevin Madok, Monroe’s comptroller and clerk of the circuit court, wrote in the audit.

Two contracted entities run the bulk of the TDC’s operations. Visit Florida Keys is a not-for-profit company that runs the agency’s executive office and handles goods and services. The other is NewmanPR, the TDC’s public relations firm, according to the audit.

Nonexistent company

Among the most significant findings in the audit, which investigated the TDC’s financial practices from 2018 until September 2023, is the possible creation of a company “that likely doesn’t exist” by Andy Newman, president of NewmanPR.

Madok said in the audit that Newman “regularly requests to be reimbursed for a company called Graphics 71.” Madok said that these requests “may be a violation of law.”

Newman said he could not comment on the audit because “the audit of us and other agencies of record continues.”

Graphics 71 contact information “mirrored NewmanPR’s contact information,” Madok wrote in the audit. But when his investigators visited the office in Miami, they found that the office suite listed didn’t exist. It also wasn’t listed on the building’s business directory, and not listed as a tenant by the building’s landlord, Madok wrote.

Auditors also said Graphics 71 is not registered to do business in the state and there is no business tax record for the company with Monroe County, according to the report.

Newman told auditors, according to the report, that he created the company 35 years ago for services he provided directly to NewmanPR, such as production, production supervision, distribution supervision and photography.

But Madok said all of these services “could be considered within the scope of services that TDC expected of NewmanPR.”

In fiscal year 2022, NewmanPR was reimbursed $14,573 for Graphic 71 invoices, and $14,998 the next fiscal year, Madok said.

“Using a nonexistent company as a vehicle to double bill the TDC shows a general disregard for the importance of ensuring that the TDC is spending Monroe County’s tourist development tax dollars lawfully and judiciously,” Madok wrote.

The TDC is funded through a 4% tax that everyone who books a Keys hotel room or short-term rental is charged.

From October last year to this September, fiscal year 2023, the TDC paid NewmanPR $1.9 million, Madok told the Miami Herald. Of that amount, $733,688 were the annual public relations fees and $1,170,834 was for reimbursements the company requested, Madok said.

As a result of the audit, Madok said he ordered the county’s finance department to immediately stop processing expense reimbursements requested by NewmanPR, and he is conducting a specific audit of the firm’s contract with the TDC “to review additional invoices to determine the legitimacy, compliance with contract, and adherence to Monroe County purchasing policy.”

No competitive bids

Another major finding in the audit is the payment of hundreds of thousands of dollars to a Key West photographer who provides pictures for calendars that the TDC gives out at conventions across the world to promote the Keys, Madok said.

Auditors say there is no documentation that the photographer, Robert O’Neal, has been given the jobs annually “based on a competitive procurement such as being the best price quote amongst more than one or two other vendors who offer similar services.”

Madok said that since 2005, the TDC has paid O’Neal more than $200,000 for his services. The calendars include mention of the Visit the Florida Keys website, but don’t have the TDC trademark, which Madok said is required by the county.

“The calendar’s focus appears to be the promotion of Mr. O’Neal’s business website,” the audit states.

O’Neal did not respond to a request for comment on Wednesday.

Madok said some of the calendars, which the TDC pays to have produced and delivered, are returned to O’Neal, who “then resells them for his personal profit.”

Madok said that O’Neal is friends with Visit Florida Keys’ marketing director Stacey Mitchell, who auditors say “misused her official position to allow Mr. O’Neal to profit from the photo calendar, especially since no other vendors were given an opportunity to bid on producing the calendar as required by Monroe County purchasing policy.”

Mitchell did not respond to emailed questions about the report.

Madok also ordered the finance department to stop paying O’Neal following the audit’s findings.

“Due to the severity of the possible self-dealing and abuse of office, Finance cannot process any further payments to Robert L. O’Neal on behalf of the TDC until there is a resolution to this matter,” Madok wrote.

Lax oversight, insufficient documentation

The audit also documents what Madok calls “a significant lack of internal controls and management oversight over TDC’ s financial transactions and annual financial reporting.”

For example, auditors found Mitchell shared her password that is needed to access the county’s finance system — allowing her to approve purchase orders, staff travel reimbursement and vendor invoices for payments — with her financial assistant. Madok said this allows the subordinate authority she should not have.

“The marketing director did not express concern that by sharing her credentials with the finance assistant, she was giving the finance assistant the ability to both initiate and approve purchase orders as well as the ability to both initiate and approve vendor invoices to be paid with no management oversight,” Madok said.

The audit also details an instance when a NewmanPR employee submitted to Visit Florida Keys a restaurant bill for reimbursement, even though the actual bill showed the restaurant comped the meal. Visit Florida Keys, in turn, submitted the reimbursement request to county finance staff “with no explanation,” the report states.

“Unfortunately, it is commonplace for Visit Florida Keys staff not to provide sufficient documentation in their invoices to Finance, which delays payments to their vendors,” Madok wrote. “We want to emphasize the main issue is not the amount of the questionable reimbursement request, but rather the fact that the contractors appeared to be willing to submit a fraudulent document.”

Kristen Livengood, spokesman for Monroe County, said the five-member Board of County Commissioners are scheduled to discuss the audit at their meeting next Wednesday in Key West.

Rita Irwin, chairperson of the TDC, said she could not comment on the specifics of the report, nor could she discuss what she and other board members plan to do about it because they have not met, and Florida public records laws prohibit them from discussing matters like the audit outside of a published meeting.

“We’re working with the county administrator and all of the appropriate people within the county, along with the TDC staff, to go through this in a way that protects the process and we can get to a place where we need to be, which is looking at the recommendations and enact them,” Irwin told the Miami Herald.