Following the release of an audit that called the travel expenses at state-backed Citizens Property Insurance Corp. “ambiguous” and lacking internal control, Gov. Rick Scott wants the company to follow state travel rules and cut out international trips.
Scott decided not to wait the 20 days that Citizens was given to respond to the audit report, issuing his own statement on Thursday saying “it is clear from the (inspector general’s) findings that Citizens is in urgent need of four reforms.”
Scott had ordered Chief Inspector General Melinda Miguel in September to review reports of rampant travel spending inside Citizens.
In addition to adhering to state government travel rules, Scott would prohibit international travel, only allow essential employees to travel for board meetings and establish its own inspector general to enforce the rules.
“Any egregious expenses, unethical behavior, or violation of the law must be grounds for dismissal,” Scott stated. “A company this large, supported by hard-working Florida families, must be held to the highest standards of integrity.”
Citizens President Barry Gilway, hired last June, agreed that travel standards need to be tightened.
“We have reviewed the report’s findings and recommendations and agree that, as guardians of public funds, we must hold ourselves to a more rigorous standard,” Gilway stated in a release Thursday afternoon after Scott issued his comments.
“Last October, when questions regarding Citizens employee and board travel expenses first came to light, I implemented a more stringent travel policy that applies to all Citizens employees and senior management. As recommended in the report, Citizens will further tighten our policy to better comply with state travel standards and reporting requirements. By acting in the most fiscally prudent manner possible, we hope to begin restoring the public confidence in our ability to better serve as sound financial guardians for our policyholders and all Florida taxpayers.”
The international travel may take a little convincing, as part of the excessive spending that was widely reported included trips that were undertaken by officials sent to New York, Bermuda, London and Zurich to negotiate a pair of $750 million bond placements.
The bond placements resulted in $47 million in savings for Citizens.
The 25-page report found that between Jan. 1 and Aug. 31, Citizens compiled more than $1.3 million in travel-related expenses, of which $454,111 was related to auto travel, $163,625 to airfare and $441,746 for hotel accommodations. Another $138,320 was for meals and $107,751 was billed under room fees.
The stay in Zurich, Switzerland, for Chief Financial Officer Sharon Binnun included a six-hour “day use” of a hotel room for $236.17, while an upgrade at the Fairmont Hamilton Princess Hotel upped a three-day stay in Bermuda from $459 to $633 a night.
“We noted 53 instances where senior managers or directors incurred costs in their town of residence (nontravel related) totaling $3,854.71 for the period” for lunch meetings, working lunch, staff meetings and breakfast, the report stated. “The meals were purchased for Citizens’ employees, senior managers, board members, or others doing business with Citizens.”
The audit also questioned a $918.34 dinner tab by seven or eight senior managers and board members while in Orlando in June that included the cost of alcohol and travel expenses by a board member -- who had his car in the city -- charging $58 for round-trip taxi service.
Florida Chief Financial Officer Jeff Atwater backed the report, calling the spending “inexcusable.”
“This culture of excess and poor judgment is unacceptable, and Floridians deserve better. I applaud the work of the governor’s inspector general and support her recommendations, including implementing the most stringent travel standards,” Atwater stated in a release.
“This inexcusable behavior confirms that an independent inspector general be put in place to ensure that Citizens’ management and employees are held to the highest ethical standards and operate in full transparency.”
Reach Jim Turner at firstname.lastname@example.org or at (772) 215-9889.