WINTER SPRINGS, Fla. – Tuesday evening, Seminole County’s inspector general released a final version of an audit report that investigated Winter Springs’ spending of penny sales tax revenue — totaling $19 million.
A draft version of the audit released at the end of April and Tuesday’s final version both accused Winter Springs of misspending a portion of the $19 million that the city received in revenue intended for infrastructure improvement.
The completed audit report listed eight recommendations, including that “sales tax money allocated to Water and Sewer Fund should be repaid to the Infrastructure Fund based on a repayment scheduled, and related interest charges should be included with the repayment.”
The city’s protested that recommendation in response and gave no indication the city would repay the money.
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“Nothing in Florida Statues or the 2014 Interlocal Agreement prohibits the transfer of infrastructure sales tax revenue into a sewer and water utility fund for expenditures related to the construction, reconstruction or improvement of water facilities,” the City wrote in its response. “Further, such a prohibition, if it existed, would not make sense because from a general accounting standpoint, capital assets of a utility are accounted for in the utility’s enterprise fund.”
The audit concluded “the City transferred money ($2 million) from the Infrastructure Fund into the Water and Sewer Fund allowing the proceeds from a county-wide sales tax to be used on a municipal water and sewer utility means Seminole County taxpayers are subsidizing costs of local utility users.”
Throughout the city’s audit responses, Winter Springs maintains its actions were “in compliance” with Florida Statues and the penny sales tax Interlocal Agreement approved by voters 2014.
The Seminole County audit was the first of two to be completed investigating Winter Springs’ penny sales tax revenue spending.
State Sen. Jason Brodeur in January asked the state auditor general for an operational audit of the city, and then-Seminole County Commissioner Jay Zembower asked Seminole County’s Division of Inspector General for an audit.
When two of Winter Springs’ bridges failed after last year’s hurricane, some citizens began asking why the city didn’t replace them before the storms as planned using penny sales tax revenue.
Winter Springs had planned to beef up its bridges and roads with its $19 million share but then reallocated funds to include 20 “new police vehicles, white fleet vehicles, machinery and equipment,” according to the Seminole County audit.
“The City proposed a group of projects that included: roadway improvements, new trails, new sidewalks, asphalt resurfacing, bridge replacement and repairs, stormwater water quality, and pipe realigning valued at $19 million,” the audit reads. “Although we agree that the City is in compliance with the requirement of having a public meeting, and the City is in compliance with Florida Statues, the City Commission, in our opinion, did not follow the intent of the referendum.”
The final audit report, under “What were the results of the audit” on page 3, found that “a small portion of the funds were not spent in compliance with the law.”
Winter Springs Mayor Kevin McCann refuted that finding when the draft audit was first released.
“There are other parts that I have read that very specifically say that we are in compliance,” McCann said.
McCann had promised to comment “line by line” on the audit once it was complete.
“I have not seen the audit report, the City Staff responses nor been involved in the process other than to raise concerns over the inappropriate way in which this has been handled,” McCann told News 6 Tuesday evening. “Florida statutes that govern audits have been written to avoid political use of such audits and I intend to follow the law. Unfortunately, if past behavior continues, I am confident you will read the documents well before I do. I stand by my commitment to answer questions “line by line” once our staff has the opportunity to review the final product and It is then supplied to me.”
Winter Springs City spokesperson Matthew Reeser said the city has not reviewed the final audit report.
“The City has yet to receive a copy of the audit from the County, we received a copy of the audit from Channel 6 and staff has not had the opportunity to review the final audit,” Reeser said.
Reeser sent News 6 a copy of the City’s formal response to the draft audit “in which we provided a detailed response to issues and areas of improvement raised in the report.”
We have been notified that the County has released its final audit findings directly to the news media.
The City has yet to receive a copy of the audit from the County, we received a copy of the audit from Channel 6 and staff has not had the opportunity to review the final audit.
Attached is a copy of the City's formal response to the draft audit sent to Inspector General Bill Carroll on May 5, 2023, in which we provided a detailed response to issues and areas of improvement raised in the report.
This is the only response we will have at this time.
Matthew Reeser
The audit report also recommended that the six other cities besides Winter Springs, Seminole County and the school board that are receiving revenue from the penny sales tax should face more accountability to ensure funds are appropriately spent, including internal controls and regular audits.
“More internal administrative controls are needed to increase transparency and protect the citizens’ tax dollars,” the audit concluded.
Initially, McCann was “disturbed” the draft audit was released publicly.
McCann said in a letter to Seminole County Clerk of Court Grant Maloy that “the draft audit report should have never been released to the news media because it is deemed confidential by law until the final audit report is completed by the County’s Inspector General and delivered to the City... It is highly unethical for me to respond about notes that are incomplete. This is entirely inappropriate that this is going to the media and everyone else before it’s finalized and that’s what the state statutes are for.”
Maloy released the 180-page draft audit publicly as a public record.
“My office’s work on the audit was finished and in our opinion, subject to public records requests,” Maloy said. “We are looking forward to the City’s response. The audit calls for more transparency and controls over how our tax dollars are spent. I would hope the Mayor would work towards that goal, instead of blaming others for the findings included in the report.”
A full version of the final audit report has been attached to this story and can be read in the media viewer below.
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