The Knuckleheads of the Day award

Today's winners are the Palm Beach County Convention and Visitors Bureau and its CEO Warren "Mac" McLaughlin. They get the award for the following.

Tourism officials did not take the advice of auditors in 2005 after an employee stole $6,280.02 that he should have used to pay off his corporate American Express card.

Auditors at McGladrey & Pullen recommended corrective measures when they discovered the employee had not paid his credit-card bill even though the Palm Beach County Convention and Visitors Bureau had reimbursed him for his expenses. But bureau officials took no action until last week - after learning this month that another employee had stolen $1.5 million without anyone noticing.

Bureau officials ended up paying the bill of former employee Chris F. Rodriguez, bureau attorney James Stuber said Monday.

The debt was written off on Oct. 29, 2004, as a miscellaneous expense to CollectCorp, the collection agency hired to try to collect from Rodriguez.

"What happened was we sent (Rodriguez) a demand letter and soon after that he filed for Chapter 7 bankruptcy," Stuber said. "Lee Davis and I consulted, and the cost of recovery was high and the chance of recovery was low."

Davis is the bureau's former vice president for finance and administration.

Auditors at McGladrey & Pullen recommended in January 2005 that the bureau directly receive and pay all American Express bills instead of reimbursing employees for their credit-card expenses and expecting the employees to use the money to pay the bills.

"We noted during inquiry with management that the organization has 19 credit cards in the name of its employees, which the organization is liable for," the auditors wrote, also finding that employees had used the cards for personal expenses. "Upon default of payment by the employee, the organization is ultimately responsible."

Davis resigned Nov. 10 after tourism officials learned of an alleged $1.5 million theft by Donna Duffer, the bureau's former controller. Duffer, who allegedly wrote more than 200 checks to herself over three years, was fired.

West Palm Beach police are investigating but have not filed charges.

Longtime bureau CEO Warren "Mac" McLaughlin was forced from office last week after the alleged theft was discovered and a preliminary audit of the bureau's books revealed lax accounting procedures.

The auditors' recommendations were part of a critical audit that found serious problems, called "reportable conditions," in 2005.

In an effort to explain how he would correct the problems, Davis wrote in February 2005 that he had obtained procedures from American Express for "waiver notification." According to Davis, the waiver would relieve the bureau of any responsibility for paying the bill "as long as the employee has been reimbursed for all business expenses."

However, Davis failed to mention that the waiver would apply only to charges made after an employee's card had been canceled. He said he believed that the waiver "procedures will protect the organization from suffering additional losses."

Despite the recommendations, no changes were made, according to a preliminary review of procedures by an auditor for Sharon Bock, the county's clerk of court and comptroller.

Here is my earlier post on the mess at the Convention and Visitors Bureau.

What happened at the Convention and Visitors Bureau was totally avoidable if the people who ran it practiced the most elementary of safeguards. Instead people either passed the buck or got complacent. Either way, taxpayer money was wasted and the CEO takes much of the blame. The bed tax was just raised again and bureaucrats can argue the money is needed. We just threw away 1.5 million!

The Palm Beach County Convention and Visitors Bureau and its CEO Warren "Mac" McLaughlin are today's Knuckleheads of the day.

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