Vero Beach's Missed Audit and City Finances — Vero Beach, Florida

Each Florida city must have an outside firm audit its books every year and send the results to the state. For the fiscal year that ended Sept. 30, 2023, the City of Vero Beach missed that step. The audited statements were due by June 30, 2024, and Vero Beach 32963 reported in February 2025 that the city had failed to complete and file them in 2024. The same report noted that from 1983 until that lapse, Vero Beach had won accolades for its financial reporting every year.

The outside auditor was not new to Vero. The national accounting firm Cherry Bekaert had reviewed the city's books since it was selected in 2012, at a fee of $38,500 a year. Billing records later obtained by the same newspaper showed that Vero Beach paid the firm $81,690 for 2022-23 audit help between September 2023 and June 2024, against $38,000 budgeted, while finance staff were also implementing GASB-96, a national accounting rule for software subscriptions.

The Florida Joint Legislative Auditing Committee, known as JLAC, sent a noncompliance letter addressed to Mayor John Cotugno on Oct. 29, 2024. According to a July 2025 report, no one at Vero Beach City Hall answered it. On Feb. 10, 2025, the committee voted to put 34 noncompliant municipalities on 30-day notice of losing most state funding; apart from Vero, most were small rural towns. City Manager Monte Falls said he told the City Council on Feb. 17 and asked for the finance director's resignation.

Mayor Cotugno, City Manager Falls and the city attorney traveled to Tallahassee in late March 2025 to seek more time. Committee staff confirmed by email on March 27 that no extension had been granted, and beginning April 3, 2025, the City of Vero Beach no longer had access to state funding until the 2022-23 statements were filed and accepted. The city later told JLAC that the 2022-23 audit was completed on May 8, 2025, nearly 11 months after the due date.

The direct revenue loss turned out smaller than the early estimates. Vero Beach forfeited $133,253 in its share of the optional half-cent sales tax for April 2025. In July 2025, Councilman Aaron Vos relayed that the city had received a $100,000 payment on a Faithful Performance (errors and omissions) insurance claim, which left Vero with a net loss of $33,254 on the sales tax.

Pension money took the larger hit. State premium tax money that supports Vero Beach police and fire pensions was held back while the city was out of compliance. An April 10, 2025 notice from the administrator of the $55 million Vero Beach Police Pension Fund said the city had not deposited its employer contributions due Oct. 1, 2023 and Oct. 1, 2024, putting the amount needed to make the plan whole at $2,052,000 with interest. By July 2025 the city had paid nearly $130,000 in interest on late pension contributions.

The lapse also reached the city utility. In February 2025, Water and Sewer Director Rob Bolton had three state grant applications pending for Vero Beach, worth $32 million in all, for the new Water Reclamation Facility, septic conversions and another deep well. Bolton said the grant rankings were based on environmental benefit and that he was not aware of any scoring tied to the audit, but the timing left that money uncertain for several months.

When the 130-page report reached the Florida Auditor General in May 2025, the auditors had marked yes on whether material weaknesses were identified in Vero Beach internal control over financial reporting. The audit reported governmental fund revenues of $31.1 million, excluding other financing sources, against expenditures of $33.4 million for 2022-23, and a net decrease of $3.5 million in General Fund balance for the year.

The same report described a sizable cushion. Combined ending balances in the Vero Beach governmental funds stood at $62.6 million, down $2.8 million from the prior year, and about $10.3 million of that, or 16 percent, was unassigned and available at the City Council's discretion. Auditors also questioned cost accounting on some capital projects at Vero Beach Regional Airport, which runs as a self-sustaining enterprise fund under Federal Aviation Administration rules.

Vero Beach keeps tax-supported government in its general fund and runs the airport, marina, solid waste service, water-sewer utility and Crestlawn Cemetery as enterprise funds that bill their own users. For the 2022-23 budget, Vero Beach 32963 reported a planned $28.5 million for general city government and $36.5 million for the enterprise funds, about $65 million combined. The enterprise funds pay City Hall an administrative fee, set at $2,419,334 that year, and direct transfers from the water-sewer utility, marina and solid waste division lifted the total above $3.75 million.

Those utility transfers cross the city line. Because Vero water and sewer service also reaches the Town of Indian River Shores and the unincorporated South Barrier Island, the newspaper calculated in February 2023 that roughly 40 percent of the $2.41 million the utility would add to general fund coffers that year came from customers outside the city limits. The proposed 2025-26 general fund counted on $1.8 million in water-sewer transfers. Debt for the new wastewater plant at the airport is handled differently: it is repaid through water-sewer bills paid into the utility enterprise fund, not through Vero property taxes.

Much of the Vero Beach cushion traces to the 2018 sale of the city electric system to Florida Power & Light. Sale proceeds first paid for a glide path that replaced nearly $6 million a year in electric transfers to the general fund; by August 2022 only $500,000 of it remained, and none was left for the 2023-24 budget year. Separately, more than $21 million in sale cash was recorded in the audited statements as the Capital and Infrastructure Reserve, and after $2 million went toward a dry storage building at the city marina, $19 million remained in that council-directed reserve.

Mayor Cotugno said on April 1, 2025 that the city's financial reserves remained strong and liquid, and City Manager Falls said Vero had enough in reserve to absorb the audit losses. The weaker point was credit. In early 2025, the bond rating agency Fitch told Vero Beach 32963 that it had insufficient recent financial data on file to issue a rating, which matters because Vero Beach expects to sell bonds for the wastewater plant near the airport.

Staffing turned over first. Lisa Burnham moved from interim finance director to Finance Director in 2025, and Vero Beach filled its assistant finance director and comptroller posts. As of Oct. 8, 2026, the City of Vero Beach Finance Department page lists Burnham as Finance Director, and describes a department that coordinates, administers and invests the pooled financial resources of the city.

The second audit still ran late. JLAC turned down a request for more time on the 2023-24 audit on June 11, 2025, and a Sept. 18, 2025 letter gave Vero Beach until Nov. 17 to file. The city filed the 2023-24 statements in October 2025, came into compliance by November, and saw previously withheld pension money restored. A Nov. 4, 2025 notice from the Florida Department of Revenue then flagged a data entry error on Truth in Millage forms that omitted $174,112 tied to the Downtown Economic Development Zone tax increment fund, which the City Council corrected at a special Nov. 25 meeting.

Public reporting was the council's central demand. In late May 2025, Councilman Taylor Dingle, backed by Councilmen Aaron Vos and John Carroll, asked staff to resume monthly financial reports to the Vero Beach City Council. In November 2025 the newest quarterly report on the city website still covered the quarter ending June 30, 2023, and the volunteer Finance Commission had met only twice that year. Its charter directs it to review the city's monthly financial statements and to meet at least once every quarter.

The record has since filled in. As of Oct. 8, 2026, the Vero Beach Quarterly Financial Reports archive lists reports for the first and second quarters of fiscal 2025-2026, and the Annual Financial Reports archive lists annual financial statements and auditor's reports for the fiscal years ended Sept. 30, 2023, 2024 and 2025. The city's Other Communications page posts the 2022-2023 audit timeline, the 2023-2024 extension request and the Sept. 18, 2025 JLAC letter.

The Vero Beach City Council page lists Mayor John E. Cotugno, Vice Mayor Taylor Dingle and Councilmembers Linda Moore, John Carroll and Aaron Vos, and the City Manager page lists Monte K. Falls as City Manager of Vero Beach. Finance officeholder names on this page: Last verified: October 8, 2026, on the City of Vero Beach website.