Palm Beach County’s Office of Equal Business Opportunity (OEBO), an agency created to ensure that small, minority, and women-owned business enterprises obtain at least 20% of all county contracts, has failed to properly monitor the program, according to the county’s internal auditor.
The agency’s internal controls were so lacking and its reporting so incomplete that it is difficult for county commissioners to “draw accurate conclusions” about its performance, a report by Auditor David Zamora concludes, noting inaccurate and/or incomplete data cannot be relied upon for making business decisions.
The audit found that the agency overreported the value of small, minority, and women-owned business enterprises (S/M/WBE) contracts awarded from fiscal year 2019 through fiscal year 2022 by more than $6.7 million, a difference of about 6%. The agency was aware of the “discrepancy” but failed to disclose it in its annual report, according to the audit.
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“Not disclosing differences or errors in the data obstructs transparency. Including all relevant information promotes credibility and prevents misinformation which may help stakeholders draw accurate conclusions,” Zamora’s report notes. “The OEBO Department Director did not ensure that internal controls were in place to oversee the maintenance of an accurate contract and reporting system as required by the Equal Business Opportunity ordinance during the period from Jan. 1, 2019, through Sept. 30, 2022.
“As a result, we were unable to determine if the data reported in the FY2019-2022 Annual Participation Report was accurate and complete,” the report said.
Auditors were unable to confirm that subcontractors were paid as required by the county ordinance and Florida prompt-payment laws. Also, the report said data was lacking which resulted in auditors being unable to confirm Small Business Enterprise participation goals were met.
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The data analyzed reflects S/M/WBE participation by fiscal year based on the total payments to both prime contractors and subcontractors. The agency is responsible for monitoring conditions affecting S/M/WBE businesses. Its goal is to ensure they have an equitable opportunity to participate in the county’s procurement process, according to the audit.
Tonya Davis Johnson, the agency’s director, declined to comment on the report’s findings but she responded in the audit, blaming the discrepancy on “the inadvertent omission of supporting reports due to timing out of the reporting system.” To prevent it from reoccurring, she said the reporting systems have been updated. She said in the report that she agreed with the findings and would address the issues raised.
OEBO operates with an annual budget of $1.7 million and has a staff of 12 employees. Businesses apply to the agency to become certified allowing prime contractors to hire them. In 2023, the agency issued 108 new vendor certifications and 155 recertifications.
Last November, county commissioners took issue with some of the work the agency had done, questioning how much outreach it had done. County Commissioner Mack Bernard called on Zamora to conduct the audit, which was done in April. The audit also found:
- Required annual and semiannual reports have not been done on a timely basis.
- Personal information, including Social Security numbers, have been unnecessarily maintained, a possible violation of state and federal privacy laws. The auditor called on the agency to immediately redact all Social Security numbers from its database.
- Subcontractors were not properly informed of their ability to complain about misconduct regarding treatment and payment by prime contractors.
Zamora told The Palm Beach Post that the report will be submitted next month to an audit committee for review. County commissioners will be briefed on the findings at a meeting in late September, he said, noting that he expects the agency to develop “a corrective action plan” that his office will review.
Mike Diamond is a journalist at The Palm Beach Post, part of the USA TODAY Florida Network. He covers Palm Beach County government. You can reach him at [email protected]. Help support local journalism. Subscribe today.
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