An audit by Palm Beach County’s inspector general found the county paid a contractor on its $54 million sheriff’s headquarters renovation for work the County Commission had not yet approved, in one case more than 16 months before the vote. It also found $223,243 in fees the county had no paperwork to support. Most of the project was paid for by a sales tax that voters approved on a promise of independent oversight.
On November 30, 2022, Palm Beach County paid $26,497 to cover a subcontractor’s extra work on the renovation of the Palm Beach County Sheriff’s Office (PBSO) headquarters on Gun Club Road in West Palm Beach. The Board of County Commissioners approved that work on April 9, 2024. That is 355 business days, or 496 calendar days, after the check went out.
That payment is one of 44 listed in Audit Report 2027-A-0001, issued October 19, 2026 by the Palm Beach County Office of Inspector General (OIG). Together they total $903,387.75. All were paid to the project’s construction manager, Kast Construction Company LLC, for subcontractor change-order work before the Board formally approved those change orders. The audit separately identified $223,243.30 in fees paid above the contract’s terms without supporting documentation, and recommended the county recover it.
Local coverage, led by WLRN, reported the headline totals. The full report and the county’s response attached to it say more. They show how long some of the gaps between payment and approval were. They include the county’s own explanation, which is that leadership delayed formal approval in order to be more transparent. And they show that both sides arrived at nearly the same overpayment figure. The county argues that the $903,387.75 figure is “not relevant” because commissioners eventually voted yes. The report describes neither theft nor a technicality. It describes a spending process in which the elected body’s approval sometimes came after the money had already gone out.
A $17 million estimate that became a $54 million project
The report’s background section gives the project’s history. The PBSO headquarters was built in 1983 and expanded in the 1990s. It covers about 200,000 square feet and houses more than 500 employees. Planning began in 2011 as a space reconfiguration. In 2014, a structural assessment found that the exterior walls did not provide adequate protection against hurricane-force winds. The county retained a construction manager in November 2016, scheduled construction to start in late 2017, and expected completion in late 2018. “Preliminary construction costs were estimated at $17 million,” the report states.
Construction was authorized through contract amendments. Amendment No. 1, for $10,830,487 in exterior hardening, was approved in March 2020 and terminated for convenience weeks later because the site was serving as the county’s COVID-19 response center. Amendment No. 2 ($585,772.55) covered communications work in July 2020. Amendment No. 3, approved in March 2021 for $33,653,791, covered the main scope: hardened walls and windows, new reinforced concrete exterior walls, a new roof, HVAC replacement, fire suppression and lighting, and interior renovation of all three floors.
As of March 31, 2026, total contract costs were $54,015,467. Of that, about $47,679,994 came from the county’s one-cent infrastructure sales surtax and the rest from property taxes. A caution on the comparison: the $17 million figure was an early estimate of construction costs alone, made before the scope was finalized. The $54 million total also includes design, furniture and equipment, property acquisition and other costs. The two numbers are not the same measure, and the report does not attribute the growth to any single cause. County budget staff told the surtax oversight committee in November 2025 that early project budgets had been “compromised by the impacts of construction costs during COVID,” according to the committee’s minutes.
The tax that paid for it, and what voters were promised
Palm Beach County voters approved the surtax on November 8, 2016. The ballot question asked whether the county should levy the one-cent tax for schools, roads, public safety equipment and “governmental facilities,” among other things, “with independent oversight by citizen committees.” The tax took effect January 1, 2017. Ordinance No. 2025-008, passed April 8, 2025, repealed the surtax ordinance effective December 31, 2025. When commissioners discussed letting the tax lapse in early 2024, they said residents needed a break. “A break to our constituents is what we need to do,” Commissioner Maria Marino said, as reported by WLRN in February 2024.
The citizen oversight committee the ballot promised does exist. It met in November 2025. At that meeting, according to the minutes, county staff “confirmed that all sales tax revenue had been allocated solely on approved infrastructure surtax projects.” The inspector general audit answers a different question. The committee was told the money went to eligible projects. The audit asked whether each payment on one of those projects was authorized before it was made. The OIG says it chose this contract because it was surtax-funded and because the county’s Facilities Development and Operations Department (FDO), which manages the county’s buildings, “had minimal OIG coverage prior to this audit.”
Finding one: fees above the contract, without invoices
The OIG reviewed 30 paid payment applications, about 96 percent of the total, worth $41,600,683.33. It also reviewed all 372 change orders, which together added $9,176,876.95. The general conclusion was mixed but fair to the county: it “generally had adequate controls over construction phase activities, transactions, and payment applications,” but had “internal control weaknesses in the change order management process.”
The first problem involved markups. The contract’s General Condition 65.9 lets subcontractors add 10 percent to their actual costs for changed work, and lets the construction manager add 5 percent of the subcontractor’s total, “including but not limited to overhead and profit.” In 158 of 160 change orders tested, the construction manager instead charged a combined 10.10 percent: 1.00 percent for builder’s risk insurance, 1.00 percent for payment and performance bonds, 1.35 percent for subcontractor risk mitigation, 1.75 percent for contractor’s insurance, and 5.00 percent for overhead and profit. The OIG calculated $374,275.65 in insurance, bond and risk-mitigation charges above the contract terms.
After the audit, county staff produced documentation for $101,529 in builder’s risk premiums and $52,031 in bond premiums. That leaves $220,715.65 that the OIG treats as recoverable. A further $2,527.65 in general-requirements costs above the guaranteed maximum price also remains unsupported, after the county documented most of an $88,531.35 overage. The two items total $223,243.30. (The body of the report, on page 13, states the insurance figure once as “$220,243.30.” Its own footnote arithmetic, the recommendation and the summary table all give $220,715.65, which RSN has confirmed independently.)
The key detail is what happened when auditors asked for invoices. According to the report, “the CM told us that invoices showing direct costs were not available as these costs reflected increases to the GMP and resulting increases in the mark-up.” The contract defines insurance and bond costs as “actual expenditure.” A fixed percentage applied to every change order is not an actual expenditure unless someone checks it against one.
The county disputes the OIG’s legal reasoning on this finding, and its position deserves a fair hearing. FDO argues that insurance and bond premiums are a reimbursable “cost of the work” under section 8.2.4 of the contract, not part of the construction manager’s fee, so the 5 percent cap does not apply to them. It adds that fixed-percentage markups for change-order insurance are standard in public construction and are reconciled at closeout. That may be a correct reading of industry practice. But the county’s own reconciliation landed on almost the same number as the auditors. FDO found a contractor’s-insurance overpayment of $128,463.45, a bond overpayment of $24,135.65, a builder’s-risk balance of $28,121.35 still owed to the contractor, and a preliminary $99,100.34 overpayment for subcontractor risk mitigation, for a total of $223,578.09. The county says the contractor agrees to a net offset of $124,477.75 from its final payment, with the risk-mitigation amount to be deducted as well if documentation does not appear. The county is holding $251,268.02 in retainage, so the money can still be recovered. Under either side’s legal theory, the county paid percentages it could not verify, and the review that caught them was an inspector general’s audit.
Finding two: paid first, approved later
The second finding goes further. The OIG tested a sample of 22 change orders, about 6 percent of the total, made up of 132 subcontractor payment requests worth $2,515,929.34. In 44 of those 132 requests, or one in three, the county paid the construction manager for subcontractor work before the Board formally approved the change order. Article 9.1 of the contract states that, except in emergencies endangering life or property, the construction manager “shall allow no Changes in the Work without the prior written approval of the Owner.” General Condition 65.9(D) provides that subcontracted change work will be paid “only when both the subcontractor and the terms of payment to such subcontractor have been approved in writing by Owner before the subcontractor starts to work on the change.”
The report’s payment-by-payment table shows how long the gaps were. RSN tabulated all 44 rows; they sum exactly to the $903,387.75 the OIG reports. Some gaps were short. The largest single payment, $150,675.60 to Jade Communications, went out on March 29, 2022, a week before the Board’s April 5 vote. Many were not short. By RSN’s count, 21 of the 44 payments, worth $327,613.42, were made at least 100 business days before approval, and 15, worth $282,041.12, at least 200 business days before. A $102,500 elevator payment was made on June 29, 2023 and approved on April 9, 2024. Payments approved at the Board’s November 21, 2023 meeting had gone out as early as August 1, 2022.
County staff explained the practice to auditors. The construction manager, “at their own discretion and risk, may move forward with the work, prior to Board approval, in order to avoid affecting the sequence of operations or schedule.” That explanation covers the contractor’s decision to start work early, not the county’s decision to pay for it. Once the county paid, the risk the contractor was supposed to carry passed to taxpayers. The report identifies the specific gap: the county’s review process “lacks a formal verification step to ensure that subcontractor change order work has received Board approval prior to disbursement.” It calls the result “a failure of internal control” that exposes the county to “unauthorized expenditures, and the inability to recoup funds for substandard work.”
The county’s defense: consolidation “to ensure full transparency”
FDO Director Jennifer Ferriol’s written response, attached to the report, agrees with the finding but objects to the OIG calling the $903,387.75 “questioned costs.” Her argument has two parts.
The first is that the Board approved all 44 items before the draft audit report was issued, so “no such risk exists here.” The response asks the OIG to drop the dollar figure, out of concern that “a general reader may confuse” it with money still in question. That concern is reasonable as far as it goes. The OIG itself states that “not all questioned costs are indicative of potential fraud or waste,” and RSN repeats that point here: the report alleges neither. But the OIG declined to remove the figure, and it was right to. The finding is not that the money was lost. It is that the approval step was skipped, and a skipped step does not become harmless because the Board later agreed.
The second part explains how the delays happened, and it is the most revealing passage in the document. According to FDO, at the time they were processed all 44 requests “fell within the delegated approval authority of either the Department Director or the Contract Review Committee” and normally “would have been reviewed and approved within a few weeks.” However, “given to [sic] the high-profile nature of this project, the FDO and County Administration leadership in place at the time chose to consolidate these smaller change orders and present them to the Board as part of larger, single change orders to ensure full transparency, though it extended the timeline required to secure formal approval.”
Taken at face value, that account does not help the county. If the items were within a director’s or committee’s authority, nobody exercised that authority before payment. If they belonged before the Board, the Board did not see them until months after payment. Under either reading, money went out before anyone with authority had signed off. The decision to bundle small changes into larger Board items was described as a transparency measure, yet in these cases it meant commissioners were asked to approve spending that had already been paid. A vote on work that has been done and paid for can only accept or refuse what already happened. The report’s numbers show that this is what Board approval became for these 44 payments.
The report does not settle the conflict between the two accounts. FDO says the items were within delegated authority. Capital Improvements Division staff told auditors that change proposals go to the Board once their cumulative value passes $300,000. The OIG treated Board approval as the requirement under the contract and county policy PPM CW-F-050. Commissioners are the people best placed to decide which account is correct.
What the county agreed to fix, and what it declined
The OIG made seven recommendations. The county accepted six. Within 120 days of the final report, FDO says it will add contract language requiring documentation for reimbursable costs and setting standard percentage markups for change-order insurance and bonds. It will also train project managers or issue a new policy, aimed at projects over $10 million, requiring each change order on a pay application to show its approval date and who approved it. FDO also says it is looking at cloud-based project-management software. On recovery, it commits to offsetting the final payment if documentation is not produced.
The county declined Recommendation 7, which would have required the construction manager to certify on each draft pay application that every subcontractor charge comes from the original contract or an approved change order. FDO argues that the contract already restricts payment to approved work and that the industry-standard AIA pay-application form already includes a contractor’s certification. But the AIA certification quoted in the response says nothing about change-order approval. It certifies that work was completed according to the contract documents and that prior payments were passed on. The existing form did not prevent the 44 premature payments.
The construction manager was given an opportunity under the county code to respond to the findings. The OIG reports that it “did not receive a response from the Construction Manager.”
Why this matters
The amounts here are small compared with the federal improper-payment figures RSN has examined, such as HUD’s nine years without an improper-payment estimate or the $2.7 billion school-bus program. The principle is the same, and arguably clearer at the county level. Elected officials are the check on spending. When payment comes first and the vote comes later, that check stops working in practice even though it still exists on paper. The ballot that raised most of this money promised taxpayers independent citizen oversight. The oversight committee was told the funds went to eligible projects. The November 2025 minutes RSN reviewed contain no discussion of whether individual payments had been authorized before they were made.
This is an old problem, and RSN has covered earlier versions of it. In 2015 RSN reported on an audit finding that HHS failed to screen contract recipients, and on congressional questioning of Obamacare spending on state exchanges. The common issue is not a particular party or program. Spending controls that are not checked at the moment of payment tend to stop being enforced, and auditors usually find the gap years later.
One more point should be stated plainly. Nothing in the report suggests wrongdoing by the Sheriff’s Office. PBSO was the building’s occupant, not the contracting party. The contract was managed by the county’s Facilities Development and Operations Department.
What is established, what is disputed, what is unknown
Established by the audit and the county’s own response: 44 subcontractor payments totaling $903,387.75 were made 6 to 355 business days before Board approval of the related change orders. The county agrees these were paid “prematurely and in deviation from standard contract and policy requirements.” The construction manager billed fixed-percentage insurance, bond and risk charges that it could not support with invoices. The county’s own reconciliation puts the overpayment at $223,578.09, close to the OIG’s $223,243.30.
Disputed: whether the insurance and bond charges count toward the contract’s 5 percent markup cap (the OIG says yes, the county says no). Whether the 44 payments needed Board approval or only director or committee approval. Whether the $903,387.75 should be labeled “questioned costs” at all.
Not established: any fraud, theft or substandard work. The report alleges none. Also unknown is how many of the roughly 350 change orders outside the sample were paid before approval. The test covered 6 percent of change orders, and the report does not extrapolate. Finally, the report does not say whether the same practice occurred on other surtax-funded projects managed by FDO.
What accountability would look like
- Confirm the recovery publicly. The Board should require FDO to report, at a public meeting, the exact amount deducted from Kast Construction’s final payment and the documentation accepted for any amount not deducted.
- Find out how widespread the practice was. Commissioners should ask the OIG or FDO to check the remaining change orders on this contract, and a sample from other large surtax-funded FDO projects, for payments made before approval.
- Resolve the authority question. FDO says the items were within delegated authority; the OIG says they required Board approval. The Board should state on the record which is correct.
- Reconsider Recommendation 7. A one-line certification that every charge reflects an approved change order costs nothing, and the existing AIA form does not cover it.
- Let the citizen committee do its job. The Independent Citizen Oversight Committee should receive this audit and ask whether any other surtax project paid for work before it was authorized.
FDO has given itself 120 days from the final report, which takes it to mid-February 2027, to put its new controls in place. The test is whether, by then, the county can show that every payment on a major project was approved before it was made.
Sources: Palm Beach County OIG Audit Report 2027-A-0001 (Oct. 19, 2026), including FDO management response dated Sept. 30, 2026; 2016 one-cent surtax ballot language; Infrastructure Surtax Independent Citizen Oversight Committee minutes (Nov. 20, 2025); WLRN (Feb. 28, 2024); WLRN (Oct. 20, 2026). Business-day and payment tallies are RSN’s calculations from the report’s table on pages 17–18.
Featured image: A Palm Beach County Sheriff’s Office patrol car, November 2022. Photograph by Elbert Hampton, released under CC0 (public domain dedication), via Wikimedia Commons.