Palm Coast Disarms ‘Forensic Audit’ Talk as Council’s Klufas Asks ‘Where’s the Fire?’ and Cautions Against Pandering

Led by Council member Nick Klufas, the Palm Coast City Council on Tuesday decidedly stepped back from its posture a week earlier, when it appeared ready to call for what would have been a very expensive and accusatory “forensic audit” of city finances, seemingly at the behest of one, significantly misinformed resident.




Neither that resident nor council members had offered so much as a hint of evidence suggesting that the city’s finance staff, routinely garlanded in independent awards and praise from its own council for transparency, would have any reason to be second-guessed beyond the thorough and independent audits already conducted, as one is being conducted even now.

“Forensic audit to me is essentially the same thing as saying fire without even being able to point to smoke,” Klufas told his colleagues: forensic audits are, in fact, the purview of criminal investigators looking for wrongdoing, usually from a solid basis that something has gone wrong. “Help educate me and tell me where is the fire that you perceive to be that it would require some type of forensic audit,” Klufas asked his colleagues.

The apparent consensus at the end of that discussion last week was direction to the city manager to bring back information on how much a forensic audit would cost. No other parameters were set, leaving open the scope of the potential audit, with the implication that such an audit was even necessary–or respectful of the city administration: at no point had any of the council members sought to reassure the staff that they were not, somehow, under the gun, though no forensic audit could be called for without that overtone.




On Tuesday, discussion of a forensic audit was disarmed to the point of reducing the call for information to something a lot more limited and, in the end, essentially innocuous. “I’m going to ask council to kind of reel back or roll back the direction that was given at the last meeting regarding a discussion of a forensic audit,” Mayor David Alfin said, putting the walk-back in explicit terms. He brought the conversation back to scope and purpose, as if clarifying what he wished he’d clarified last week: “We acknowledged the fact that we don’t know what a forensic [audit] is. We’re not experts in that field. And we’re therefore looking for information to make a decision if it was appropriate or inappropriate. At least that’s where I’m at.”

The mayor also sought to put the calls for forensic audits, which have become more frequent in the years of ideologically slanted rhetoric against government, in that context: “Over the last 11 years, whether it be the city of Palm Coast government, the county of Flagler government, the city of Flagler Beach government, almost every single year at some meeting, and every one of those municipal governments, somebody cries forensic audit,” Alfin said. “I’m not sure if they’re seeing it on TV, they’re scraping it out of a social media post. But it seems to be a war cry. When you can’t point to something specific, you kind of throw that out.”

Council member Ed Danko correctly noted that former Council member Jack Howell had campaigned on calling for a forensic audit, back when the first renovation of Holland Park had stalled. Howell never did call for the audit when he became a council member: officials, once elected and schooled from within, tend to better gauge the vast distance separating public perceptions, especially from the grandstanding well of a thickly attended public meeting, from administrative realities.




The call for a “forensic audit” last week started with one resident, Ken McDowell, who made baseless accusations of corruption, accused the city of using its utility fund dollars as a “cash cow,” without evidence, and made misinformed statements about the city attorney, all as prelude to his “demand” for a forensic audit. McDowell’s tirade was standard-issue grousing frequent at local government meetings going back to tea party days, and the call for a “forensic audit” was not unusual, at least from that podium. What was unusual was the swiftness with which Council member Theresa Pontieri, supported by Danko, seconded McDowell’s demand.

“We may be intentionally or unintentionally pandering to some of the comments that are of course more heavily worded and potentially more intimidating,” Klufas said.

Pontieri on Tuesday clarified: “I do not think that there’s any type of criminal activity or improprieties occurring with our staff,” she said. “I agree that our staff does a fantastic job, that they cross their t’s and dot their i’s, and any questions that I ever asked for or any documentation asked for it’s probably provided to me by our city manager or staff.” Those words, of course, would render a forensic audit unnecessary, since such audits are only called for if there was no confidence in the process.

Pontieri was looking to give the public the same sense of transparency and understanding that she had. “So if there’s a different mechanism to provide that then I am on board with that,” she said, suggesting that the city’s own accounting firm could make a presentation to the council or be part of a town hall. “There could be other mechanisms to accomplish the same thing without an implication that there’s any type of criminal activity occurring, because obviously, there isn’t. And so I agree with you that I don’t think there’s fire and haven’t seen any smoke.”




She did not leave residents off the hook from responsibly doing some of their own research, but she said it’s also the city’s responsibility to “help them in that process because it is a challenging and difficult process.”

It is also indisputable that, beyond the detailed, public, YouTubed and archived presentations by the finance department on the budget and the city’s departments on their initiatives, the city’s books are redundantly published, updated, and made as accessible with almost as much variety as the 200 versions of the Bible on Bible Gateway. The difference is that Palm Coast does not provide its numbers in 70 languages. City staffers have also been known to provide finance tutorials about the city’s books to those who ask. Those who do tend not to be the misinformed grandstanders.

Pontieri stressed: “If there’s another mechanism to provide transparency and information that will allay a lot of the concerns that our residents have, then I favor that over a forensic audit.” She’s looking for a “middle ground that will provide the information that our residents are looking for.”

That middle ground exists, Alfin said: “In terms of middle ground, we conduct an audit with a top firm, certified and licensed by the state every year, and that audit is available to the public every year,” he said. (For example, here are the full audit reports for 2022, 2021, 2020, 2019 and 2018. The city’s budget and finance portal is here. And here’s a brief video explaining how to read an audit report.)

“I agree with your your suggestion that the information is as transparent as it can be, in light of or in lieu of actually handing out the audit,” Alfin said. “It is available through the website or certainly on request from the city manager’s office on any day of the week that a resident would choose to ask for a copy. Now if someone needed to go beyond that, then I would suggest they write to our city manager and alert the city manager to things that they do not see in the audit. So we’re already spending money to accomplish that. I don’t know how to be more transparent than that.”

Danko wanted to stick with last week’s consensus, seeing it as a pledge to the public. City Manager Denise Bevan had contacted the firm that is carrying out the city’s audit and was prepared to bring the auditors before the council for a tutorial–or to provide one-on-one sessions. Those auditors will presumably provide information on what a forensic audit would cost or entail, giving the council room to–in Danko’s words–“have the conversation and decide, you know, is it worth proceeding or not.”

From all appearances today, the result of that conversation will mean no forensic audit.