Consumer eViews
FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY NEWSLETTER

Volume 4, Number 20, May 18, 2007

Dear Floridian:

Now that the 2007 legislative session has come to an end and we are preparing for a special session next month, I have been traveling across the state talking with Floridians about the issues important to them. Issues that continue to come up include the financial impact of property taxes, insurance and climate change.

In every instance, Floridians are looking to Tallahassee for help. As Chief Financial Officer, my aim is to help protect Floridians assets -  through fiscal accountability, education and advocacy.

I invite you to listen to my recent conversation with the South Florida Sun Sentinel editorial board as we discuss the legislation that emerged from this past session as well as my ongoing priorities.

You can watch the conversation online at http://www.sun-sentinel.com/news/opinion/.

Sincerely,

--Alex Sink


CFO SINK SUSPENDS PROJECT ASPIRE

Sink refuses to continue spending taxpayer dollars developing the troubled accounting system.

Florida Chief Financial Officer Alex Sink announced she is suspending work on Project Aspire, the state’s unfinished and over-budget proposed new financial management system.

“We need to stop spending the people’s tax dollars until we have a clear strategy in place to make the project a success,” said CFO Sink, who heads the Department of Financial Services.

More than eight years ago, the state began exploring a new vision of management information systems, including accounting, human resources and state purchasing. The Legislature ordered a business case study, completed by KPMG in 2000, which recommended enterprise-wide, or universal, management information systems. Instead, the state began acquiring management systems in a piece-meal fashion, without a statewide vision for how each system would interact.

Intended to replace the state’s limited and outdated accounting and cash management system (FLAIR), Project Aspire has suffered from unanticipated delays, lacks an enterprise-wide focus and has not been guided by effective, strategic governance. Despite an original budget of $100 million (not including debt service) and completion date of February 2006, the state has spent $89 million to date on Project Aspire with no end in sight.

An interim report by Gartner, Inc., commissioned by CFO Sink in February 2007 to provide an independent assessment of Project Aspire, stated: “The State of Florida has not adhered to accepted industry best practices with respect to funding, planning and implementing Aspire.” After carefully evaluating the project’s status and its deviation from the state’s original vision, CFO Sink determined it was in the taxpayers’ best interest to suspend current activities and develop the necessary high-level oversight before moving forward.

“I applaud CFO Sink for her efforts to demand the highest levels of accountability for Project Aspire,” said Gov. Charlie Crist. “Large-scale projects will never be successful without the appropriate leadership and executive-level guidance.”

The Department of Financial Services will document the work product and preserve the project’s development, for possible resumption at a later date. The state will retain ownership of the hardware and software associated with Project Aspire.


CFO SINK ANNOUNCES FORMATION OF CITIZENS TASK FORCE ON CLAIMS HANDLING AND RESOLUTION

In an ongoing effort to improve Citizens’ policyholder and applicant services, Florida Chief Financial Officer Alex Sink announced appointees to the legislatively-created Task Force on Citizens Property Insurance Claims Handling and Resolution. The first meeting is scheduled for Monday, May 21, 2007, from 9 a.m. – 3 p.m. at the Citizens Claims Center in Jacksonville.

“I am pleased to announce that the task force will meet next week to begin reviewing Citizens’ claims and resolution handling,” said CFO Sink. “It is essential that we operate Citizens like a business and improve customer service for Citizens policyholders.”

The Citizens task force was created by House Bill 1A during the 2007 special session of the Florida Legislature. The task force is composed of four full members, with one appointment each by the Governor, Chief Financial Officer, President of the Senate and Speaker of the House. In addition there are three ex-officio voting members: the Insurance Commissioner, Insurance Consumer Advocate and Executive Director of Citizens Property Insurance Corporation or their designees.

Specifically, the committee is directed to develop recommendations for Citizens to complete claims remaining from the 2004 and 2005 hurricane seasons. This committee report is due to the Governor, Chief Financial Officer, President of the Senate and Speaker of the House by July 1, 2007. The task force is additionally charged with evaluating Citizens’ procedures on claims handling, claims resolution and customer service, with a final report and recommendations due July 1, 2008.

Appointees to the Task Force on Citizens Property Insurance Claims Handling and Resolution include:

Michael B. Twomey, Sr., Attorney (Tallahassee) -- Governor Charlie Crist
Mike Lancashire, CPCU, AIC, Vice President of Claims at The Main Street America Group (Jacksonville) -- Chief Financial Officer Alex Sink
Senator Mike Fasano – District 11 (New Port Richey) -- Senate President Ken Pruitt
Representative Julio Robaina – District 117 (Miami) -- House Speaker Marco Rubio
General Bob Milligan, Insurance Consumer Advocate (Tallahassee) -- Office of the Insurance Consumer Advocate
Heather Carruthers, Fair Insurance Rates in Monroe County (FIRM) (Key West) -- Insurance Commissioner Kevin McCarty
Tim Loftin, CPCU, AIC, Senior Vice President of Claims at Citizens Property Insurance Corporation (Jacksonville) -- Citizens Executive Director Scott Wallace

CFO Sink has also created a website dedicated to the task force, its duties, appointments, and upcoming meetings. Floridians who would like to learn more about the task force are encouraged to visit the website at http://www.taskforceoncitizensclaimshandling.org.

The first meeting scheduled for the Task Force on Citizens Property Insurance Claims Handling and Resolution will be as follows:

DATE: Monday, May 21, 2007
TIME: 9:00 a.m. – 3:00 p.m.
LOCATION: Citizens Claims Center
8301 Cypress Plaza Drive, Suite 108
Jacksonville, FL 32256


CFO SINK DELIVERS NEARLY $300,000 IN UNCLAIMED CASH TO SARASOTA COUNTY YOUTH INSTRUCTOR

Florida Chief Financial Officer Alex Sink delivered a check for nearly $300,000 in unclaimed cash to a Sarasota County youth instructor along with a lesson on the importance of regularly checking the Bureau of Unclaimed Property website.

“With nearly eight million accounts, the chances are good we are holding your cash or the cash of someone you know,” said CFO Sink. “We do our best to find and notify owners, but encourage Floridians to regularly check our website, www.fltreasurehunt.org, especially after a change of address.”

Tom, a YMCA site coordinator for a school-aged children’s program, who asked to be identified only by his first name, had been contacted by the Bureau and knew the state was holding money for him but didn’t know how much. The Bureau continued to hold Tom’s property, mostly from stocks and dividends, for several years. Then, the Montel Williams show called looking for an unclaimed property owner to spotlight on the show, and the Bureau forwarded Tom’s information suggesting he would be a great prospect. Tom and his wife taped the show earlier this month, and learned, on the show, the money they would receive was about three times more than they had originally expected.

As CFO, Sink oversees the state’s Bureau of Unclaimed Property, which holds unclaimed property accounts valued at more than $1 billion, mostly from dormant accounts in financial institutions, insurance and utility companies, securities and trust holdings. Currently there are 88,539 unclaimed property accounts for a total of $17 million in Sarasota County, 59,469 accounts for $10.1 million in Manatee County, 327,790 accounts for $44.7 million in Hillsborough County and 210,282 accounts totaling $39.2 million in Pinellas County. Unclaimed Property can be claimed free of charge, at any time, by visiting www.fltreasurehunt.org, or by calling 1-88-VALUABLE.

Until claimed, unclaimed property is deposited into the State School Trust Fund, and allocated by the Legislature for education. More than $1.5 billion has benefited Florida public schools since the program’s inception in 1961.


FLORIDA DEPARTMENT OF HEALTH OFFERS PUBLIC HEALTH RECOMMENDATIONS REGARDING WILDFIRE SMOKE

Due to the recent wildfires affecting the state, the Florida Department of Health (DOH) is providing health recommendations to citizens impacted by the wildfire smoke. 

Smoke is a respiratory irritant, and can cause a scratchy throat, and/or irritated eyes and nose.  Smoke may also worsen conditions such as asthma and other chronic respiratory or lung conditions. 

There are many steps you can take to protect yourself and your family from the health effects of smoke: 

  • Be your own health judge. If you can see smoke outside, or you feel the effects of the smoke, avoid prolonged outdoor activities.  It is especially important to limit time spent outdoors for children and persons with existing medical conditions.

  • Stay indoors whenever possible.  Run your air conditioner with a clean filter and the fresh air intake closed, to prevent additional   smoke from entering your home.  If you don't have an air conditioner, and are a comfortable temperature inside with the windows closed, stay inside.  If your home is too warm, seek alternative shelter.

  • Keep particle levels inside and around your home lower by not burning outdoor yard waste, smoking tobacco, or using anything that burns, such as wood fireplaces, gas logs, gas stoves and candles. 

  • Delay vacuuming when possible, as vacuuming stirs up particles already inside your home. 

  • Follow your doctor’s advice about taking your medications and adhere to your asthma management plan if you have asthma or other lung disease.  Call your doctor if your symptoms worsen. 

  • Stay alert to any news coverage or health warnings related to smoke. Pay attention to local air quality reports.  For more information on the air quality index and recommendations: please visit: http://www.dep.state.fl.us/air/airquality.htm

  • For further information, please contact your local county health department or visit www.doh.state.fl.us or www.FloridaDisaster.org

  • The Florida Emergency Information Line: 1-800-342-3557 

  • Public Information Emergency Support Function: 850-921-0384


FIFTH GRADER ‘TAKES THE CAKE’ IN ARSON AWARENESS WEEK CONTEST  
Isabelle Johnson of Margate, an 11-year-old fifth grader at Ft. Lauderdale Christian School, received an award for her first place essay from Florida Division of State Fire Marshal Lt. Joe Schwartz and Broward Sheriff Fire Rescue Asst. Chief Greg Holness. Also in attendance was Ft. Lauderdale Batt. Chief John San Angelo. Johnson’s teacher, Heather Negen also received a certificate and a cake for the class, topped with a fire truck. The students also got a surprise visit from a fire truck.
 
Several dozen elementary school students from Broward County participated in the Arson Awareness Week 2007 essay writing contest coordinated by the Broward Sheriff Fire Marshal’s Bureau on behalf of the Broward County Juvenile Firesetters Program and the Florida Division of State Fire Marshal.  Fourth and fifth grade students who participated in this year’s essay contest had to write a persuasive letter on the topic of arson awareness and prevention.  Winners were chosen based on accuracy of information, focus on topic, relevant supporting ideas and creativity.  

Second and third place winners, respectively, were Michelle Hopkins and Kyla Hessler from Central Charter School in Lauderdale Lakes. They also received their awards on May 15th. On Friday, May 18th , a participation award will be presented to Ft. Lauderdale Prep School in Lauderdale Lakes.  This event was sponsored by the Florida Advisory Committee on arson Prevention.  


CFO SINK APPLAUDS 14-YEAR PRISON SENTENCE HANDED DOWN IN WORKERS’ COMPENSATION FRAUD CASE

Florida Chief Financial Officer Alex Sink applauded a 14-year sentence handed down Wednesday against Thomas Daniel King, former owner and operator of a now-defunct professional employee organization, Miralink Group Inc., which left thousands of workers in Florida and several states without workers’ compensation coverage despite collecting more than $5.8 million in premiums. One woman, facing mounting medical bills, lost her home and horse farm to foreclosure and was found living in her truck behind a convenience store while King was driving a Mercedes.

“Floridians suffered greatly because of greed, and we are determined to hold everyone involved accountable,” said CFO Sink, who oversees the Department of Financial Services.

King is one of seven individuals charged or convicted in the $217 million, nationwide scheme in an ongoing joint investigation by the Department of Financial Services’ Division of Insurance Fraud (DIF), the Federal Bureau of Investigation (FBI), and the United States Attorney's Office. In addition, the department’s Division of Workers’ Compensation, Division of Consumer Services and Division of Agent and Agency Services played key roles in the investigation, and the Office of Insurance Regulation also assisted.

In addition to the prison sentence, U.S. District Court Judge Virginia Hernandez-Covington ordered King to serve three years of supervised probation upon his release from prison and to hand over $250,000 in cash and a Hummer. King, 44, was convicted in September on 23 federal counts of wire fraud, mail fraud and money laundering stemming from his role in the nationwide scheme. Miralink, formerly headquartered in Jacksonville, represented to clients that its 33,000 employees were covered by Regency Insurance of the West Indies, Ltd., located in Capistrano Beach, Calif. The investigation revealed Miralink knew there was no real coverage.

The joint investigation began in 2002 after the department’s Division of Workers’ Compensation issued a stop-work order against Miralink for failure to secure workers’ compensation insurance. DIF Detective Tommy Clark determined that Miralink was using Regency, an unauthorized entity, and as the investigation broadened, evidence mounted that various employee leasing organizations knowingly bought Regency’s bogus policies and knowingly put workers at risk.

Indictments unsealed last month named Jerry M. Brewer, 56, Capistrano Beach, Calif., currently residing in England; Donald E. Touchet, 53, El Cajon, Calif.; Dr. Richard E. Standridge, 58, Tempe, Ariz., Robert J. Jennings, 59, Danville, Ill.; and Joshua Poole, 33, Atlanta, Ga. Three of the men are facing 215 years or more in prison if convicted on the counts against them.

Also last month, Michael Lee McCafferty, the former chief executive officer of TTC Illinois, was sentenced to 33 months in prison and was ordered to pay $7 million in restitution for his part in the scheme. Before filing for bankruptcy in 2001, TTC was one of the nation's largest employee leasing organizations with headquarters in Kankakee, Ill., branches in Tampa and Boca Raton, and clients in 40 states.

After Detective Clark began to realize the scope of the alleged scam, he sought assistance from FBI Special Agent Doug Matthews and United States Attorney Mark Devereaux. Clark and Matthews conducted interviews of suspects in Arizona, Illinois, Alabama, Kentucky, and South Carolina in relation to the Florida victims.

Further arrests are anticipated.


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