Audit of $54 Million PBSO Headquarters Renovation Finds Missing Receipts, Overcharges and $903,000 Paid Before Commissioners Approved Work

Palm Beach County paid more than $900,000 for work on the $54 million renovation of the Palm Beach County Sheriff's Office headquarters before county commissioners approved it, and overpaid its construction manager by more than $223,000 in costs that lacked receipts or exceeded the contract, according to an audit released by the county's Office of Inspector General. The report, dated Oct. 19 and first reported by WLRN and CBS12, is the latest scrutiny of one of the largest projects funded by the county's voter-approved penny sales tax.

The audit, report 2027-A-0001, examined the county's construction manager at risk contract with Kast Construction for the West Palm Beach headquarters project. Inspector General Kalinthia R. Dillard's office reviewed 30 payment applications and 372 change orders, according to the report as described by CBS12.

What the inspector general found

The audit's findings fall into two categories, summarized below from the report and news coverage:

The largest finding concerns timing. County staff paid for extra or unexpected work, much of it subcontractor work, before the Board of County Commissioners approved the change orders that authorized it. The inspector general found those payments were made between six and 355 business days ahead of approval, meaning some money went out nearly a year and a half before the work was officially authorized. The questioned costs were tied to payment application No. 40 under the Kast contract, and auditors said the change order process had internal control weaknesses, with some payments not following contract terms and others lacking required board approval.

The second set of findings concerns what the contractor billed. WLRN reported that the construction manager charged extra for routine costs and for insurance, but either could not produce receipts or charged more than the contract allowed. Of the $223,243.30 the inspector general flagged, nearly all, $220,715.65, came from insurance, bonding and risk mitigation fees.

The county's response

The county did not accept every conclusion. According to CBS12, county management agreed the change order payments were made too early but disputed the inspector general's decision to classify the $903,387.75 as questioned costs, noting that commissioners approved the change orders before the audit was issued. The county also disagreed with the method the inspector general used to evaluate the insurance and bond charges. In reply, the inspector general maintained that the early payments still violated the contract and county policy, regardless of the later approvals.

The inspector general recommended that the county recover the roughly $223,000 in overpayments, require full documentation such as receipts before future payments, set clear limits on extra charges in future contracts and improve tracking of budget changes. WLRN reported that the county agreed with those specific recommendations and adopted new rules so that taxpayer money is not paid out without board approval.

The renovation is a county project administered by county staff under the Kast contract, and the audit addresses the county's oversight of that contract rather than the sheriff's office itself. No public statement from Sheriff Ric Bradshaw or the sheriff's office on the audit had been reported as of Thursday, and Kast Construction's response was not included in the coverage reviewed by The Florida Press.

A decade-long project

The headquarters building was originally completed in 1983 and later expanded in the 1990s, according to county records. A 2014 structural assessment concluded its exterior walls did not provide adequate protection against hurricane winds, a serious concern for the building that houses the county's largest law enforcement agency and its around-the-clock operations.

The county hired Kast Construction as construction manager at risk in 2016. Early surtax project reports described the work as an interior renovation with replacement of building systems, partial roof replacement and ballistic-resistant protection for the first-floor exterior, phased so the building could stay in operation. A 2018 county report projected construction from January 2019 to substantial completion in January 2022, and a 2019 report noted that interior planning was on hold after the sheriff's office canceled a space plan approval meeting. County records show that in March 2020, commissioners approved a contract amendment for exterior hardening that was terminated for convenience shortly afterward, reportedly so the site could serve as the county's COVID-19 response center. On March 9, 2021, the board approved a guaranteed maximum price of about $33.65 million for interior and exterior renovations, including hardening of the exterior walls and windows, new cladding for hurricane protection, new reinforced concrete walls and a roof replacement. Additional change orders followed; a 2024 board item included one for $789,932 that extended the project by 116 days.

The project has drawn criticism before. In October 2020, Palm Beach County Police Benevolent Association President John Kazanjian called the planned work a superficial renovation costing more than $40 million and urged the county administrator to consider replacing the building instead, according to a statement released by the union.

Penny tax dollars at stake

About $47 million of the project's $54 million cost came from the county's one-cent local government infrastructure surtax, WLRN reported. Voters approved that sales tax in November 2016 to pay for roads, buildings and other infrastructure, with a citizens oversight committee to review spending. Commissioners declined in 2024 to ask voters to renew it, and the board voted in April 2025 to end the surtax as of Dec. 31, 2025. Palm Beach County's sales tax rate fell from 7% to 6.5% on Jan. 1, 2026, when a separate half-cent school surtax took effect, according to the Florida Department of Revenue.

The amounts the inspector general flagged are small relative to the project's total cost, roughly 2% of the $54 million when the early payments and overcharges are combined. The findings instead center on process: whether the county followed its own contract terms and approval rules when spending surtax money.

What's next

The county must now try to recover the roughly $223,000 the inspector general says Kast was overpaid, a process that may hinge on the dispute over how insurance and bond charges should be measured. The new rules requiring board approval before payment on change orders will apply to future county construction contracts. Any settlement with the contractor or further action on the findings would go to the Board of County Commissioners, which controls the contract.