An aerial view of the Port Everglades entrance channel.
An aerial view of the Port Everglades entrance channel. (Courtesy/Port Everglades)

Port Everglades’ purchasing, operating and finances have been grossly mismanaged in recent years, Broward County auditors say.

Public works employees at the world’s third busiest cruise port used county-issued purchasing cards to spend millions of dollars on items that there’s no proof the port ever received, auditors said. In addition, port managers never emphasized obtaining the best — or even reasonable — prices when buying goods, auditors said.

Among the findings in the audit released this week:

  • More than 7,000 purchases totaling approximately $5 million using the county cards, called P-Cards, could not be verified as having been received. Auditors said “significant parts and supplies could have been misappropriated without detection.”
  • No comprehensive inventory system exists, auditors said. The ordered parts do not go into a central receiving system and are not tracked. Besides the potential for the goods to be misappropriated, it’s also likely port employees unnecessarily bought parts that were already on hand.
  • Approximately 2.5 million gallons of untested and uncertified vessel wastewater was dumped into the port’s sewer system without determining if it met allowable limits set for sanitary wastewater by Fort Lauderdale and the George T. Lohmeyer Wastewater Plant.

Auditors began their inquiry after a whistleblower alerted officials to potential wrongdoing at the county-owned port in 2018. The resulting audits — and investigations by the Federal Bureau of Investigations and the Broward Sheriff’s Office — have uncovered employees using equipment, supplies and materials for their own purposes, or making a profit because of inventory controls that were nonexistent when the audit started.

“Because of the grossly inadequate procedures and controls, additional fraud and misappropriation of resources other than those identified during the audit could be occurring without detection,” auditors said. “We can provide no reasonable assurance that all such instances have been identified.”

Criminal investigations so far have led to the arrests of five individuals who worked for or did business with the port, and their subsequent guilty pleas. The five have received federal sentences ranging from three months to 21 months in prison and have been ordered to pay restitution totaling more than $400,000.

The five each pleaded guilty to a felony charge of conspiring to commit fraud with programs receiving federal funds. The port receives taxpayer-supported federal grants and subsidies and other federal assistance.

The audit calls for the county to cooperate with law enforcement on any continuing criminal investigations at the port.

County and port officials said they agree with most of the audit’s suggestions for improvement, and many have already been implemented. More than 30 P-Cards issued to workers were suspended in 2018.

County Administrator Bertha Henry’s written response to the audit said “many of the deficiencies uncovered were the result of actions and inactions of individuals who colluded to circumvent existing controls. The main individuals who were identified as engaging in inappropriate and fraudulent activities are no longer working for the County and have been prosecuted.”

“These systems, most notably the inventory and work order system, are in the process of being automated which is being rolled out in December 2019,” Henry wrote.

Some things, such as shortfalls in how public works was organized at the port and the need for a consolidated storage facility, were already identified by the county prior to the audit, Henry wrote.

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