Nye files state ethics complaint against School Board CFO after whistleblower complaint goes unanswered

Despite an audit report finding Brevard Public Schools (BPS) CFO Pennie Zuercher violated both school board policy and management controls by giving her friend a raise last year, no adverse action has been taken by the district. The original whistleblower complaint was filed July 25th of last year, and was covered by Space Coast Daily. Despite an auditor’s report clearly stating Zuercher had intentionally thwarted management process and controls, Brevard Schools Superintendent Mark Mullins appeared to blame the process, stating “the auditors’ findings determined there is a problem with the process for salary adjustments. I will immediately seek input and direction from the school board to ensure clarity and will take necessary and appropriate action to change procedures regarding approval of individual pay increases.” To date no adverse action has been taken against Mrs. Zuercher by BPS, in spite of clear guidance outlined in the whistleblower complaint process. Given the school board’s not-so-great record with things like paying above market rates for painting dumpsters, buying multi-million dollar incomplete, non-functional software programs and putting out RFPs that are written to favor Big Pharma at the expense of employees and taxpayers, I just couldn’t let this one go. You can view the auditor’s findings here and below. The text of my complaint to the state was as follows: To whom it may concern: I was recently made aware the CFO for Brevard County Schools, Mrs. Pennie Zuercher, was the subject of a whistleblower complaint that resulted in an investigation by the school board’s internal auditors, RSM. In a nutshell, the complaint alleged Mrs. Zuercher gave an employee that was a friend of hers (“Employee #13”) a raise of $8,541.21 per year by circumventing established procedures. Mrs. Zuercher’s friend had been offered a job in Indian River County, and Mrs. Zuercher didn’t want her to go, so she broke the rules to give her the raise so she would stay, which she did. I’ve attached the auditor’s report that details the violations of school board policy to this complaint. From their report: Employee #13 Market Adjustment – Management Override of Controls Our testing noted that Employee #13 had received an $8,541.21 annual market adjustment, or pay raise of 12.5%, while remaining in his/her current job position.This adjustment was granted only to this particular employee, not the entire position group. In addition, this is the only market adjustment in the sample we tested. Per our discussions with multiple cabinet members, market adjustments are very rare. The Deputy Superintendent of HR and the CFO stated to us that this market adjustment was initiated at the request of the CFO, analyzed and recommended for approval by HR, and verbally approved by the Superintendent. As the alleged approval was verbal, there is no audit evidence available for review. Therefore, to confirm the verbal approval, we interviewed the former Superintendent. The former Superintendent stated he did not and would not approve such a market adjustment. Thus, this market adjustment was not approved by the Board or the Superintendent. Management override of controls occurs when management in an organization utilizes the authority granted to them to circumvent the internal controls in place. Superintendent approval is an internal control meant to provide monitoring and oversight of the salary adjustment process. This market adjustment was processed without Superintendent approval thus the controls over pay adjustments were overridden. Lack of adherence to the internal controls established at the District results in increased risk of error, fraud, abuse, and poor public perception. In spite of the whistleblower complaint being validated and blatant violations of school board policies being found, to date no action has been taken against Mrs. Zuercher. To add insult to injury, it appears there is a pattern of behavior here: Mrs. Zuercher, I am told, hired her husband as a subordinate in her department in blatant disregard of the school board’s policies regarding nepotism, and later had him transferred to another department to a position for which he lacked qualifications. From the bylaws and policies of the Brevard County School Board: 3130 – Appointment, Assignment, Transfer & Promotion of Staff Nepotism Two (2) or more close relatives shall not work in the same school/department except by permission of the Superintendent. In the event that an instructional staff member, due to some unusual circumstance, may have been placed in the same school/department with a close relative, the instructional staff member may continue in the position until s/he can be reassigned to a position of comparable grade, pay, and reasonable personal convenience.
  • A close relative may be employed in the same school when specifically recommended by the principal and approved by the Superintendent on the grounds that it is to the educational advantage of the school.
    • Under no circumstances shall a person supervise the work of a close relative.
    • Close relatives shall be defined as the first degree of kindred which includes: husband, wife, father, mother, brother, sister, son, daughter, and in-laws of the same degree.
There appears to be a coordinated effort by some members of staff to cover up Mrs. Zuercher’s actions, as none of the statutes governing whistleblower violations have been followed to date, despite pressure from at least one of the elected School Board members. As it appears the School Board’s counsel has effectively buried the findings of the audit report, I hereby request the Commission on Ethics investigate Ms. Zuercher pursuant to Florida Statutes 112.3173: Florida Statutes Chapter 112.3173 6. The committing of any felony by a public officer or employee who, willfully and with intent to defraud the public or the public agency for which the public officer or employee acts or in which he or she is employed of the right to receive the faithful performance of his or her duty as a public officer or employee, realizes or obtains, or attempts to realize or obtain, a profit, gain, or advantage for himself or herself or for some other person through the use or attempted use of the power, rights, privileges, duties, or position of his or her public office or employment position; Sincerely, Matt Nye

Whistleblower WB18-001 Investigation – Final Report by Matthew Daniel Nye on Scribd