Administrative investigation sustains management fault in handling of city payroll tax problem
An administrative investigation into the city of Cape Coral’s Finance Department ordered in the wake of a payroll payment snafu that led to more than $420,000 in IRS fines and penalties has sustained performance-related allegations against three department managers, including the department’s director.
The internal affairs/ administrative report ordered by City Manager John Szerlag and conducted within the Cape Coral Police Department, sustained five of six city personnel rules and regulations allegations for which Finance Services Director Victoria Bateman was investigated, one of six allegations for Deputy Financial Services Director Monte Vavra, and four of six for Senior Accounting Manager Laura Tanner.
The investigation looked at a half dozen possible policy violations: Gross neglect of duty or specific serious failure to perform assigned duties; insubordination; failure or refusal to perform tasks properly assigned by any person in authority; violation of department work rules or operating procedures; actions or conduct detrimental to the interests of the city; and any other properly substantiated cause which adversely affects the city.
The report completed May 11 and released Friday in response to a public records request, did not sustain the allegation that any of the three had violated department work rules or operating procedures. The investigation found that the city lacks formal internal operating procedures or policies related directly to the filing of the various forms and biweekly payroll tax payments or required actions to be taken to respond to IRS letters or notices.
The administrative investigation sustained the remaining five allegations against Bateman — Gross neglect of duty or specific serious failure to perform assigned duties; insubordination; failure or refusal to perform tasks properly assigned by any person in authority; actions or conduct detrimental to the interests of the city, and any other properly substantiated cause which adversely affects the city.
The report sustained one allegation of the six against Vavra — Actions or conduct detrimental to the interests of the city. The remaining allegations were not sustained.
The findings sustained four of the six allegations against Tanner — Gross neglect of duty or specific serious failure to perform assigned duties; failure or refusal to perform tasks properly assigned by any person in authority; actions or conduct detrimental to the interests of the city and any other properly substantiated cause which adversely affects the city. The allegation of insubordination was not sustained.
As of Monday afternoon, Bateman and Vavra remained suspended with pay. Tanner submitted a letter of resignation Monday effective June 15, city officials said via email.
Bateman, who earns approximately $149,491 per year, was placed on administrative leave with pay on Nov. 22. Her status changed to suspended with pay on Dec. 9, the same day Vavra, who earns $130,250 per year, and Tanner, who earns $96,138 annually, also were placed on paid suspension. The notice of suspension letters advised the employees to refrain from discussing city business during the course of the investigation, the report states.
Each of the three received a pre-disciplinary notice on May 22 as a result of the report and each has requested a pre-disciplinary hearing as per the city’s personnel policy.
Neither Tanner nor Vavra could be reached for comment.
Bateman released a statement through her attorney, Benjamin H. Yormak, saying she followed proper protocol upon becoming aware of the IRS issue late last year and that she had reported the matter to her supervisor, Szerlag, on a timely basis.
“In mid-September 2019 when I learned that the Payroll Supervisor was making mistakes in her IRS reporting, I took immediate action to correct the problems,” Bateman stated, in part. “I gathered a team together to address the IRS 941 issues and we addressed the penalties. My role as a top level manager is to oversee the Finance Department and ensure things get done. However, my role is not to duplicate the calculations of lower level staff, but to rise to the occasion when problems are identified.”
In her statement Bateman said she reported the IRS issue to Szerlag, starting Oct. 8, and she also reiterated her position that the actions taken by the city administration are retaliatory and stem from unrelated interdepartmental disagreements that rose to the level of harassment after she flagged certain projects, processes and cost projections.
The allegations, which Bateman previously levied against Szerlag and the city’s contract business manager and former police chief, Jay Murphy, were brought to Council in January after Bateman wrote a letter of complaint to the mayor and council members. As city manager, Szerlag reports to Council.
Council hired Brown Law & Consulting to investigate the allegations in Bateman’s letter and also asked the Florida Department of Law Enforcement for a criminal review. The FDLE report has been completed and has been handed off to an out-of-circuit State Attorney’s Office where, city officials said Wednesday, it remains under review.
Deborah C. Brown concluded in her summation of the report dated April 14 that “the evidence does not support a conclusion” that Szerlag retaliated against Bateman by launching an investigation into the problem within her department nor by delaying his approval for federally mandated medical leave time by not signing her paperwork for two days. Brown also concluded that the “evidence did not support” any finding that Murphy’s actions related to an administrative proposal to outsource golf course maintenance, or his involvement related to the city’s employee health clinic, were improper.