CEO power has chance for abuse, but decisions made in open, he says.
Jacksonville City Hall auditors released an audit on the Jacksonville Aviation Authority that criticizes it for shoddy spending and giving its chief executive too much unchecked power.
The 30-page report, the first examination of JAA's spending since it split off from the Jacksonville Port Authority 10 years ago, details a list of questionable spending that occurred primarily when John Clark was the authority's executive director.
It includes giving almost $550,000 in severance packages to 18 former employees who were let go. The report also said the authority took months to make routine payments and reimburse employees for travel expenses.
Auditors also discovered the authority threw out payment documents from 2004-05 even though it was required by state law to keep the documents. On Thursday JAA officials acknowledge that was a mistake.
The audit also found several questionable expenses reimbursed to Clark, who left in 2009 to become chief executive of the Indianapolis Airport Authority.
Clark was reimbursed for $83.50 on a Saturday evening at a nightclub and the receipt indicates the bill was paid at 1:39 a.m. The second questionable reimbursement was for $123.44 at a local cigar bar when the bill was paid at midnight on a Saturday.
Principal Auditor Kim Taylor said the audit of JAA's accounts payable division showed that the CEO position has broad authority to spend money without going to the JAA board as long as the board approves the operating budget.
"Should the CEO be allowed to approve a $500,000 to $1 million contract without board approval?" Taylor asked. "That's a question we raise."
The audit doesn't allege any impropriety but points out that the CEO possesses broad authority that could be abused, Taylor said.
JAA's current chief executive, Steve Grossman, took issue with the suggestion that he possesses vast powers.
He said the board does delegate day-to-day responsibilities to the CEO, but he makes decisions out in the open.
"I can't think of a single decision I've made in the past 15 months that was just me," Grossman said, adding that he gets constant input from his staff and the board.
The audit examined spending that occurred before Grossman arrived, but the chief executive's duties remain the same.
Board Chairman Ernie Isaac agreed with Grossman.
Isaac said he regularly reviews spending with Grossman, and the board is in the loop for all major spending decisions.
"I can't comment on when John Clark was CEO, because I wasn't here," Isaac said. "But I look at all the expenditures Steve Grossman signs off on."
Grossman took a mixed view of the audit. He agrees that spending policies need to be better defined when it comes to donating to nonprofits and admits a mistake was made in throwing out the spending documents.
But he also said the audit is overly broad and papers over the fact that JAA is a well-run organization with no major problems.
Grossman also said the auditors didn't understand how the authority works.
"The auditor wants us to be more like the city," Grossman said. "But that's not the way we were set up."
The Airport Authority, which runs Jacksonville International Airport, Cecil Field, Herlong Airport and Jacksonville Executive Airport (formerly Craig Airport), is supposed to operate like a business, not a government agency, Grossman said.
Some of the audit's criticisms are now out of date, he said. For instance, auditors criticized a policy where the chief executive submits his personal expense reports to the chief financial officer, who reports directly to the CEO.
"You're putting a subordinate of the CEO in an awkward position," said Taylor, pointing out that's how the two late-night reimbursements to Clark were approved.
Grossman said he ended that policy when he became CEO. He now submits his expense reports to Isaac.
Clark could not be reached for comment Thursday.
Taylor said the audit was routine and not focused on Clark.
Expenses were examined from Sept. 1, 2008, to Oct. 31, 2009, and Clark's expenses were flagged as questionable, Taylor said.
Auditors randomly examined about 200 payments totaling about $4 million.
Taylor said auditors would go back in the spring to assess the progress JAA had made in making improvements.