The state committee responsible for ensuring local governments comply with financial reporting laws has denied Vero Beach’s request for an extension to file its overdue 2023-24 audit – an update city staff did not share during a June 24 City Council meeting.

City Manager Monte Falls told the council on June 10 that an extension would be requested, stating it would be “physically impossible” to meet the June 30 filing deadline. Falls’ office submitted the request later that day to the Joint Legislative Auditing Committee (JLAC), which holds oversight authority for noncompliant entities.

“The City of Vero Beach needs additional time for filing its 2023-2024 Audit due to the fact that we just completed our 2022-2023 Audit on May 8, 2025,” the letter explained, referencing a March 5th timeline of excuses and problems in the city finance department.

“Since that time, Lisa Burnham has been promoted from Interim Finance Director to Finance Director, and we have filled the Assistant Finance Director and Comptroller positions. With these senior positions filled, we can now focus our efforts on the 2023-2024 Audit and Annual Financial Report. Our external auditing firm (Cherry Bekaert) has advised that their workload would also not allow the June 30, 2025 deadline to be met. Therefore, we respectfully request an extension,” Falls said.

Nowhere in the June 10 letter did Falls apologize for the city’s late filing two years in a row, or take any personal responsibility for the failure of leadership which contributed to the ongoing audit troubles.

JLAC staff responded the next morning, June 11, denying Falls’ request. “Our office cannot provide an extension related to the June 30 statutory due date,” the committee wrote, adding that if Vero’s audit is not received by early September, the city will be listed as noncompliant and could face state sanctions.

“If the City receives a letter from our office regarding the status of delinquent financial report(s), please ensure that someone at the City provides a written response explaining the status of such reports at that time,” JLAC staff said.

In 2024, no one at City Hall bothered to respond to an Oct. 29 letter from the JLAC addressed to Mayor John Cotugno, which resulted in the forfeiture of $133,253 in sales tax revenue and prompted the committee to take enforcement action in February.

Despite receiving the denial of an extension on June 11, city officials did not disclose the development at the next City Council meeting. Councilman Aaron Vos acknowledged the issue in a June 23 email to constituents, stating that the finance department aimed to finish the audit by August. Councilman John Carroll, however, said on July 9 he was unaware the extension had been denied.

The city is negotiating with auditors for additional work needed to complete the 2023-24 financials, according to Vos and Carroll. Until the audit and annual report are filed, Vero remains out of compliance with state law.

The JLAC may schedule hearings this fall to determine whether further penalties are warranted. If the required reports are not submitted before state lists of noncompliant entities are sent to JLAC in September, the city could face additional state actions, including delayed or withheld funding.

The consequences of the ongoing audit delays have already rippled through other areas of city finances. The Vero Beach Police Pension Fund has received three notices from state officials due to missed filing deadlines. That could delay an expected $700,000 to $800,000 in pension payments typically triggered in August.

The city also paid nearly $130,000 in interest on late pension contributions, in addition to the $133,253 lost sales tax revenue. Vero Beach skipped its 2023 pension payment and made its 2024 contribution seven months late.

Falls has downplayed the financial impact, noting that the city has sufficient reserves to absorb the losses without jeopardizing operations.