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Brevard Schools CFO Pennie Zuercher personal financial history has come under scrutiny after her inability to answer basic questions regarding the district’s finances during the June 24th meeting at which the School Board voted on pay raises for teachers.

Since the meeting and vote, it has come to light the district incorrectly calculated the savings from teacher attrition and had another $1.5 million that could have been put toward teacher raises – – a fact that may have changed the way some board members voted on the raises.

A package left on my doorstep last night contained the following bankruptcy documents, with a note stating the bankruptcy took place just prior to her being hired by the district (I haven’t confirmed her start date with the district).

While I don’t normally consider a bankruptcy a disqualifier for many things (I have one myself from a business failure back in 2001), this does appear to show a pattern of questionable fiscal management, and I’m not sure I would promote someone to be the CFO of a $1 billion enterprise so soon after filing one.

Zuercher Bankruptcy Docs by Matthew Daniel Nye on Scribd

Despite an audit report finding Brevard Public Schools (BPS) CFO Pennie Zuercher violated both school board policy and management controls by giving her friend a raise last year, no adverse action has been taken by the district.

The original whistleblower complaint was filed July 25th of last year, and was covered by Space Coast Daily.

Despite an auditor’s report clearly stating Zuercher had intentionally thwarted management process and controls, Brevard Schools Superintendent Mark Mullins appeared to blame the process, stating “the auditors’ findings determined there is a problem with the process for salary adjustments. I will immediately seek input and direction from the school board to ensure clarity and will take necessary and appropriate action to change procedures regarding approval of individual pay increases.”

To date no adverse action has been taken against Mrs. Zuercher by BPS, in spite of clear guidance outlined in the whistleblower complaint process. Given the school board’s not-so-great record with things like paying above market rates for painting dumpsters, buying multi-million dollar incomplete, non-functional software programs and putting out RFPs that are written to favor Big Pharma at the expense of employees and taxpayers, I just couldn’t let this one go.

You can view the auditor’s findings here and below. The text of my complaint to the state was as follows:

To whom it may concern:

I was recently made aware the CFO for Brevard County Schools, Mrs. Pennie Zuercher, was the subject of a whistleblower complaint that resulted in an investigation by the school board’s internal auditors, RSM.

In a nutshell, the complaint alleged Mrs. Zuercher gave an employee that was a friend of hers (“Employee #13”) a raise of $8,541.21 per year by circumventing established procedures. Mrs. Zuercher’s friend had been offered a job in Indian River County, and Mrs. Zuercher didn’t want her to go, so she broke the rules to give her the raise so she would stay, which she did. I’ve attached the auditor’s report that details the violations of school board policy to this complaint. From their report:

Employee #13 Market Adjustment – Management Override of Controls

Our testing noted that Employee #13 had received an $8,541.21 annual market adjustment, or pay raise of 12.5%, while remaining in his/her current job position.This adjustment was granted only to this particular employee, not the entire position group. In addition, this is the only market adjustment in the sample we tested. Per our discussions with multiple cabinet members, market adjustments are very rare.

The Deputy Superintendent of HR and the CFO stated to us that this market adjustment was initiated at the request of the CFO, analyzed and recommended for approval by HR, and verbally approved by the Superintendent. As the alleged approval was verbal, there is no audit evidence available for review. Therefore, to confirm the verbal approval, we interviewed the former Superintendent. The former Superintendent stated he did not and would not approve such a market adjustment. Thus, this market adjustment was not approved by the Board or the Superintendent.

Management override of controls occurs when management in an organization utilizes the authority granted to them to circumvent the internal controls in place.

Superintendent approval is an internal control meant to provide monitoring and oversight of the salary adjustment process. This market adjustment was processed without Superintendent approval thus the controls over pay adjustments were overridden. Lack of adherence to the internal controls established at the District results in increased risk of error, fraud, abuse, and poor public perception.

In spite of the whistleblower complaint being validated and blatant violations of school board policies being found, to date no action has been taken against Mrs. Zuercher. To add insult to injury, it appears there is a pattern of behavior here: Mrs. Zuercher, I am told, hired her husband as a subordinate in her department in blatant disregard of the school board’s policies regarding nepotism, and later had him transferred to another department to a position for which he lacked qualifications. From the bylaws and policies of the Brevard County School Board:

3130 – Appointment, Assignment, Transfer & Promotion of Staff

Nepotism

Two (2) or more close relatives shall not work in the same school/department except by permission of the Superintendent. In the event that an instructional staff member, due to some unusual circumstance, may have been placed in the same school/department with a close relative, the instructional staff member may continue in the position until s/he can be reassigned to a position of comparable grade, pay, and reasonable personal convenience.

• A close relative may be employed in the same school when specifically recommended by the principal and approved by the Superintendent on the grounds that it is to the educational advantage of the school.
  • Under no circumstances shall a person supervise the work of a close relative.
  • Close relatives shall be defined as the first degree of kindred which includes: husband, wife, father, mother, brother, sister, son, daughter, and in-laws of the same degree.

There appears to be a coordinated effort by some members of staff to cover up Mrs. Zuercher’s actions, as none of the statutes governing whistleblower violations have been followed to date, despite pressure from at least one of the elected School Board members. As it appears the School Board’s counsel has effectively buried the findings of the audit report, I hereby request the Commission on Ethics investigate Ms. Zuercher pursuant to Florida Statutes 112.3173:

Florida Statutes Chapter 112.3173

6. The committing of any felony by a public officer or employee who, willfully and with intent to defraud the public or the public agency for which the public officer or employee acts or in which he or she is employed of the right to receive the faithful performance of his or her duty as a public officer or employee, realizes or obtains, or attempts to realize or obtain, a profit, gain, or advantage for himself or herself or for some other person through the use or attempted use of the power, rights, privileges, duties, or position of his or her public office or employment position;

Sincerely,

Matt Nye

Whistleblower WB18-001 Investigation – Final Report by Matthew Daniel Nye on Scribd

Incumbent Chairman Rick Lacey defeated challenger Matt Nye 95-59 in last night’s closed Brevard Republican Executive Committee meeting. Josiah Gattle, a previously announced candidate for Chairman, dropped and threw his support behind Nye.

The Executive Board of the BREC is now:

Chairman: Rick Lacey*
Vice Chair: Mark Hutchins
Secretary: Paul Oddo*
Treasurer: Sharon Rose
District 1 Chair: Cindy Roberts*
District 2 Chair: John Weiler
District 3 Chair: Joanne Solley-Hansen
District 4 Chair: Susan Hammerling-Hodgers
District 5 Chair: Patricia Fowler
State Committeeman: Mike Thomas**
State Committeewoman: Cheryl Lankes**

*Re-elected
**Not up for re-election until 2020

Vice Chairman Nick Tomboulides attempted to raise a point of order at the beginning of the meeting regarding last minute additions and removals to the membership roster, but was ruled out of order by Chairman Lacey. Forty-five members were removed and eight were added just five days before the elections.

In 2014 when then-candidate Curt Smith was asked by the Florida Today what he hoped his legacy would be if elected, his answer was when other future Commissioners were faced with difficult decisions, they would ask “what would Curt Smith do?”

One thing future Commissioners won’t be looking to Commissioner Smith to be an example of is how to complete their financial disclosures.

Last Thursday Commissioner Smith stipulated to numerous violations on his financial disclosures before the Florida Commission on Ethics, making him the second sitting Brevard County Commissioner this year to admit to violating Florida Statutes. Commissioner Jim Barfield, who has since said will not be seeking re-election, stipulated to similar violations in January. Both Commissioners paid $1,750 in fines.

“I claim ignorance. I didn’t know any better. I just didn’t know it was that critical that everything be itemized.”

– District 4 County Commissioner Curt Smith

The ethics violations are ironic given Commissioner Smith’s vocal dissent and derisive comments toward District 3 Commissioner John Tobia last year when Tobia proposed an ordinance to require lobbyists to register with the county. In spite of being the recipient of several campaign donations from lobyists, Smith opposed the ordinance as unnecessary, and boasted about how ethical the current commission was. He mocked Tobia’s proposal as “a solution in search of a problem.” The ordinance mirrored one already in place in the state legislature.

In addition to his hypocrisy on the lobbyist ordinance and subsequent ethics reform proposals put forth by Tobia, Smith has reneged on numerous campaign promises since being elected, including his promise to defund the Brevard Economic Development Commission, his promises to cut spending and taxes, and his vow to support former District 3 Commissioner Trudie Infantini, whom he said would think “she had died and gone to heaven” should he be elected.

Smith routinely voted against Infantini, sat by silently while she was repeatedly bullied by former District 1 Commission Robin Fisher in spite of his campaign promises to bring civility to the commission, and publicly belittled her as not being leadership material.

Smith’s failure to follow through on campaign promises led one prominent local grassroots group, the Republican Liberty Caucus, to rescind its endorsement of Smith. Former Commissioner Infantini is now challenging Smith in the District 4 County Commission Republican primary.

Both Commissioners Barfield and Smith have claimed the ethics complaints were “politically motivated”, and conservative radio show host Bill Mick went so far as to describe local political activist Matt Nye, who filed the complaints early last year, Commissioner Tobia’s “lackey” in his on-air defense of Barfield and Smith.

Mick failed to mention Nye filed an ethics complaint against John Tobia regarding the inclusion of prepaid postage on mail pieces containing petitions during his last campaign for re-election as a state representative. The Commission on Ethics found the complaint to be without merit.

“The fact is, these are elected positions, so by definition, anything related to them is political,” Nye said. “To say the violations are unimportant because of who filed them or why, is to turn the notion of objective law on its head.”

Nye filed to run for the District 52 state house seat currently occupied by Thad Altman in September of last year.

The Brevard County Commission controls an annual budget of around $1 billion, of which approximately $250 million is discretionary spending. Both Barfield and Smith admitted they didn’t exercise care when completing the financial disclosures, with Smith stating “I claim ignorance. I didn’t know any better. I just didn’t know it was that critical that everything be itemized.”

The instructions regarding how to disclose assets are clearly articulated on page four of the Form 6. The instructions state, in part:

How to Identify or Describe the Asset:
— Real property: Identify by providing the street address of the property. If the property has no street address, identify by describing the property’s location in a manner sufficient to enable a member of the public to ascertain its location without resorting to any other source of information.

— Intangible property: Identify the type of property and the business entity or person to which or to whom it relates. Do not list simply “stocks and bonds” or “bank accounts.”
For example, list “Stock (Williams Construction Co.),” “Bonds (Southern Water and Gas),” “Bank accounts (First National Bank),” “Smith family trust,” “Promissory note and mortgage (owed by John and Jane Doe).”

“If these two can’t or won’t follow simple instructions like these, do you really want them voting on things as important as taxes, spending and infrastructure?”, Nye asks. “What else do they gloss over or ignore in their roles as County Commissioners, and at what expense to the taxpayers?”

According to the Florida Commission on Ethics, since 1987, and prior to Nye’s complaints against Barfield and Smith, there were 14 ethics complaints filed against Brevard County Commissioners, three of which resulted in penalties or fines. All three of those were in the last 13 years.

“Now there have been two complaints against Commissioners serving on the same board within the same year, both resulting in fines.” Nye said. “Yet Commissioner Smith would have us believe the taxpayers of Brevard have nothing to worry about.”

3_17003 Report of Investigation by Matthew Daniel Nye on Scribd