A non-compliance letter addressed to Vero Beach Mayor John Cotugno last week put the city on notice that state enforcement actions may be taken if Vero does not file its fiscal year 2023-24 audit report and financial statements, or a written excuse, by Nov. 17.

This letter from the Florida Joint Legislative Auditing Committee (JLAC) was expected since the city missed the June 30 deadline to submit the financial reporting as required by law.

This is the second year Vero has been delinquent in filing, with the 2022-23 audit being filed nearly 11 months late this spring. In October 2024, JLAC sent Cotugno a similar letter but no one at City Hall bothered to respond.

Vero Councilman Aaron Vos, in his weekly Sunday night email to constituents, said that “as of Sept. 16, Finance Director Lisa Burnham reported that most of the documentation required for the City’s annual audit was submitted to our independent auditor, Cherry Bekaert. Only a few small items remained.”

Vos has reported Cherry Bekaert being on-site at City Hall throughout August and September working on the audit, and that Vero audit director Jeff Zeichner stated in an email “they are on track to issue the September 30th, 2024 financial statements by the end of the month. He warned that they are at a critical time and a lot needs to happen to keep them on track.”

The Sept. 18 JLAC letter included a warning about potential penalties, including lost access to state funding. This spring, Vero forfeited $133,000 in sales tax money, most of which was covered by errors and omissions insurance.

“The Joint Legislative Auditing Committee (Committee) is expected to meet in late 2025 to consider taking state action against municipalities that have failed to file outstanding financial reports. To avoid having state revenues withheld from your municipality, please submit the above-referenced reports to the DFS and the Auditor General, as applicable, no later than November 17, 2025,” the JLAC said.

“If such reports cannot be submitted by this date, please provide a detailed written status of the delinquent financial reports, including an estimated timeframe for report submission.”

Vos said Vero’s planned submission on Sept. 30 “is expected to satisfy this requirement without the need for further action.”

This year, Vero avoided a penalty phase until February because the JLAC was not constituted to begin meeting until after the results of the November 2024 elections were known, as members often shuffle, and new ones must be sworn in.

But in off years with no state elections, committees begin taking care of business earlier. Republican Rep. Chase Tramont, who represents parts of Brevard and Volusia counties in the Florida House, now chairs the committee. Lieutenant Gov. Jay Collins co-chaired the JLAC before his promotion.

Reports accounting for how police and fire pension funds were spent and invested during the 2023-24 fiscal year were due March 15. The now-late audit and financial statements are needed to bring the city into compliance with the Florida Department of Management Services.

Each October that city pension plans are in compliance, DMS releases Vero’s portion of state-collected tax revenue. These funds reduce what Vero taxpayers must contribute to the police pension plan.

Last week, the Police Pension Fund managers Foster and Foster received a letter from DMS stating that due to non-receipt of a certified copy of Vero’s 2023-24 financial statements, “We are now withholding your 2024 premium tax moneys in the amount of $342,274.19 pending the resolution of the outstanding issues listed above.

“If the plan has not been approved by fiscal year end 9/30/2025, you will not be able to include the 2024 premium tax moneys on the 2025 Annual Report, and any resulting funding deficiency must be contributed by the city.”

In April Vero had to pay its own police pension fund more than $125,000 in interest for late deposits due to city finance department mistakes.