The last month in which Abbate was paid, April, the health center’s payroll averaged $736,000 every two weeks, Rabinowitz said. As of last week, following Abbate’s departure, the payroll declined to $626,000.
“One of the sad things about this, regrettably, is that if the gatekeeper in this case, the chief financial officer, had done his job, a large portion of this would have been discovered a long time ago,” said Bill Dillon, a Tallahassee-based healthcare lawyer who is advising the center.
Abbate had left a small trail of bread crumbs the last few years, but because the health center’s senior executives failed to blow the whistle on her thefts, Rabinowitz said, board members remained unaware until last spring. Under federal law, at least half of the board members of federally subsidized health centers such as Miami Beach’s must be consumers of the clinic, and some of the clinic’s board members were simply ill-equipped to detect what the center calls a sophisticated financial crime. Typically, not-for-profit boards include lawyers, business people and other professionals who are familiar with audits and other financial documents.
One crumb was contained in an October 2010 Miami Herald business story that, relying on federal tax documents, reported Abbate’s compensation package as $824,000 in 2008. In the article, Abbate said the compensation package was inflated by cashed-out sick time, vacation time and a retirement account. Rabinowitz and a health center spokeswoman, Alia Faraj-Johnson, said that board members they spoke to had not seen the newspaper story until just recently, and acknowledged its content would have raised significant red flags.
“That would have tripped everybody’s light,” Rabinowitz said.
And there were other hints: The Miami Beach Community Health Center’s federal tax report for 2010 indicates Abbate’s base salary was $261,165 — but includes an additional $956,584 in “bonus and incentive” dollars that pushed her total compensation to more than $1.2 million. The center’s IRS disclosure for the prior year reported Abbate’s base salary as $970,532, and total compensation of $987,902. In 2008, Abbate’s total reported compensation was $824,686, records show.
Yet board members never agreed to pay Abbate more than $300,000, Rabinowitz said.
In hindsight, the doctor added, board members should have read the health center’s federal tax reports carefully. “I think they were supposed to read the [reports],” Rabinowitz said. “But I don’t think they knew that.” Board members, he said, had faith that the agency’s financial administrators were exercising proper oversight.
Said Faraj-Johnson, a former spokeswoman for former Florida Gov. Jeb Bush who’s now a partner at Ron Sachs Communications: “That’s why the chief financial officer is no longer there. That’s why the chief compliance officer is no longer there.”
Administrators of the center acknowledged that Abbate’s alleged wrongdoing exposed a stunning lack of financial oversight, and Rabinowitz said the agency is taking steps to prevent another such lapse: Board members will attend a “boot camp” to hone their skills, a new director will be brought in to oversee the agency, and a number of new policies are being put in place to improve accounting practices.
In addition, the center has recruited former Attorney General and Department of Children & Families Secretary Bob Butterworth as an “advisor,” “to ensure this kind of betrayal of trust can never happen again,” said spokesman Ron Sachs.
“Clearly, major lapses occurred in a system of checks and balances designed to prevent such inappropriate action,” Rabinowitz wrote in his email to staff.