AIDS Project Florida Blames Loosened Fiscal Policies for Embezzlement Scandal

in a final internal audit submitted to Broward County, Fla., health officials on Friday blamed the organization's loosened fiscal policies that began in early 2003 for a recent embezzlement scandal, the South Florida Sun-Sentinel reports (Olmeda, South Florida Sun-Sentinel, 4/24). The Broward County Human Services Department earlier this month suspended $1.5 million in federal funding for the organization after former APFL CFO William Diamond admitted to embezzling money from the group during his tenure. The group's federal funding -- which accounts for more than 25% of its budget -- has been suspended until a county audit of the group's funds during Diamond's tenure from February 2003 to March 2005 is complete. Current APFL Executive Director Will Spencer gave county officials an internal audit showing $59,000 in fraudulent disbursements signed by Diamond, including petty cash payments to himself, some of which he marked as "bio-trend study/research" in the official ledger. Broward County Human Services Director Marlene Wilson said the Health Resources and Services Administration -- the federal agency that distributes Ryan White CARE Act funds to counties -- has been notified about the audit. William Green, the county's human services section manager, said that Broward County auditors will review the internal audit and might recommend further action to the Broward County Commission (Kaiser Daily HIV/AIDS Report, 4/18).

Final Audit, Reaction
Laurence Brown, the independent auditor who prepared the internal audit, said that the "system of internal controls that existed in fiscal year 2004 was inadequate to protect the assets of the organization," according to the Sun-Sentinel. APFL has 70 employees and provides medical, therapeutic and mental health services for 3,500 HIV-positive people. The organization has had to redirect funds from its $5.2 million budget to assure that services are not interrupted. The "wea[k]" fiscal policies coincided with Norm Kent's tenure as the organization's executive director from January 2003 to September 2004, according to the Sun-Sentinel. Kent was succeeded in the position by Spencer, who last week was suspended with pay last week for "mismanaging" the organization's response to the scandal, according to APFL's board of directors, the Sun-Sentinel reports. Board Chair Steven Steiner on Saturday said that the board had challenged Diamond's job performance and urged Spencer to replace him before Diamond's embezzlement became known, according to the Sun-Sentinel. Steiner also said that Kent and Spencer were using the embezzlement scandal to discredit the board, according to the Sun-Sentinel. Kent on Saturday said that Steiner's comments were "misplaced," according to the Sun-Sentinel. Seven employees of the organization last week wrote to the county commission in support of Spencer, saying that the board should be faulted for "interference with day-to-day operations while questions of their own ethics grow in the public sphere," according to the Sun-Sentinel. Steiner said he was "disappointed" that the letter's authors did not speak to board members or Acting Executive Director Marcel Martin about their concerns, which he said is part of a "pattern" of keeping information from the board, according to the Sun-Sentinel. Steiner said that employees who signed the letter in support of Spencer will not face repercussions, according to the Sun-Sentinel (South Florida Sun-Sentinel, 4/24).

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