INVESTIGATION | THE SUN POST NEWS
A Florida Auditor General report identified 148 residential financing agreements executed in Orange County even though the county had not authorized the Florida PACE Funding Agency to operate there. The audit also raised concerns involving consumer protections, underwriting, oversight, travel and debit-card expenses, and a $100,767 advance payment to a former executive director.
By Marcos A. Tejeda
Publisher & Editor-in-Chief
The Sun Post News
KISSIMMEE/ORLANDO, Fla. — A 57-page state audit is placing a Florida public agency with institutional roots in Kissimmee under scrutiny after auditors found that one of its private program administrators executed 148 residential financing agreements totaling approximately $3.7 million in Orange County, even though the county had not authorized the agency’s participation in its jurisdiction.
The $3.7 million finding, however, represents only part of a much broader examination.
Florida Auditor General Sherrill F. Norman’s Report No. 2027-004, released in July, contains nine findings involving operations of the Florida PACE Funding Agency, or FPFA. The audit raises issues involving underwriting, required homeowner disclosures, oversight of third-party program administrators, debit-card controls, travel expenses and executive contracts.
The report is particularly relevant to Central Florida because FPFA was not created in Tallahassee or Orange County.
It was created, in part, through Kissimmee.
According to the Auditor General, the Florida PACE Funding Agency was established in June 2011 through an interlocal agreement between Flagler County and the City of Kissimmee. It operates as a legally separate independent special district administering PACE programs.
The audit also shows that, as of March 2025, the program was available within Kissimmee and unincorporated areas of Osceola County.
That makes this more than a story about 148 Orange County properties.
It raises broader questions about government oversight, consumer protection and accountability involving an agency whose institutional origins lead directly back to Central Florida.
What is PACE?
PACE stands for Property Assessed Clean Energy.
The program provides a financing mechanism for certain permanent improvements to residential properties. Depending on eligibility and applicable law, those improvements can involve energy efficiency, roofing, air-conditioning systems, storm protection and other qualifying projects.
PACE differs significantly from an ordinary consumer loan because repayment can occur through a non-ad valorem assessment appearing on the property’s annual tax bill.
That distinction matters.
A homeowner must understand not only the original cost of an improvement but also the financing terms, annual assessment, duration of the obligation and potential consequences of failing to pay.
Florida law therefore establishes authorization, underwriting and disclosure requirements for residential PACE programs.
Among those requirements is a critical jurisdictional restriction: a residential PACE administrator may operate within a county or municipality only after that jurisdiction has authorized participation through an ordinance or resolution.
That requirement is at the center of one of the audit’s most significant findings.
Auditors initially discovered six Orange County agreements
During its review, the Auditor General examined a sample of residential PACE agreements.
Auditors found that Home Run Financing, one of FPFA’s contracted third-party residential program administrators, had executed six agreements totaling $84,457 during August and September 2024 involving properties in Orange County.
According to the audit, Orange County had not authorized FPFA to operate its residential PACE program there.
Home Run personnel told auditors that Orange County had mistakenly been included within the company’s application system as an authorized jurisdiction.
According to the explanation provided during the audit, the problem was discovered in mid-October 2024 and new originations were supposed to stop.
But auditors expanded their review.
What they found was substantially larger.
Six agreements became 148
The expanded examination identified 142 additional agreements, bringing the total to:
148 residential PACE agreements worth approximately $3.7 million.
All involved Orange County properties in a jurisdiction that, according to the Auditor General, had not authorized FPFA participation.
The finding transformed what could have appeared to be a handful of administrative errors into a multimillion-dollar oversight issue.
And another detail made the situation even more significant.
Nine agreements were executed after the problem was discovered
According to the audit, nine agreements totaling approximately $286,000 were executed between November 2024 and January 2025.
That was after mid-October, when Home Run reportedly discovered the jurisdictional problem.
Home Run explained that some projects were already underway when the mistake was identified and that canceling financing could have unfairly affected homeowners and contractors.
The Auditor General nevertheless maintained that conducting PACE activities within a jurisdiction that had not authorized the agency was contrary to state law.
The report also warned that such activity could compromise consumer protections and expose FPFA and its third-party administrators to legal and reputational risks.
Who was responsible for preventing it?
That question moves the investigation beyond Home Run Financing.
Home Run was a private administrator, but FPFA remained the governmental program administrator.
According to the audit, FPFA possesses the authority to impose the non-ad valorem assessments associated with the program, while contracted companies perform substantial portions of the program’s day-to-day residential operations.
During the period reviewed, FPFA’s two residential third-party administrators were Home Run Financing and FortiFi Financial, Inc.
The Auditor General concluded that FPFA did not have adequately documented written policies and procedures to ensure its third-party administrators executed agreements only within authorized jurisdictions.
FPFA disputed that conclusion and maintained that policies existed.
The Auditor General responded that, to the extent those controls were not documented in writing, agency records did not demonstrate the policies FPFA claimed were in place.
The finding remained in the final report.
The audit examined an operation exceeding $52 million
The scale of FPFA’s residential activity helps explain why those controls matter.
Between July 2024 and February 2025, Home Run and FortiFi collectively executed:
1,849 residential PACE agreements totaling $52,661,589.
Home Run accounted for 1,232 agreements totaling approximately $34.54 million.
FortiFi accounted for 617 agreements totaling approximately $18.12 million.
The Auditor General selected 60 agreements, totaling approximately $1.64 million, to test compliance with various underwriting requirements.
Auditors identified 157 underwriting deficiencies within the records examined.
That number requires context.
It does not mean that 157 separate homeowners were necessarily affected, nor does the audit conclude that all 1,849 agreements were deficient. A single agreement could contain more than one deficiency, and the audit sample was not presented as a statistical projection of the entire portfolio.
Nevertheless, the findings led auditors to question the effectiveness of existing controls.
Questions about underwriting
Residential PACE administrators are required to perform various checks before financing is finalized.
Depending on the statutory requirement involved, those checks can concern outstanding taxes and assessments, involuntary liens, code or zoning violations, bankruptcy circumstances, homeowner income, financing duration and other property obligations.
Auditors found files in which the available documentation did not demonstrate that certain required checks had been completed at the appropriate time before work was authorized.
The audit also questioned financing terms in some agreements.
According to the Auditor General, certain terms did not comply with statutory limitations related to the useful life of improvements and the applicable 20-year maximum.
The audit additionally identified a case in which estimated annual payments associated with agreements exceeded the statutory threshold related to 10% of the homeowner’s annual household income.
Did homeowners understand the obligations?
Another audit finding focused on consumer disclosures.
This is particularly important because PACE financing can ultimately become part of the financial obligations attached to a property.
Florida’s residential PACE requirements are intended to ensure that homeowners understand matters such as financing costs, payment obligations, cancellation rights and the potential consequences of default.
Auditors found instances in which certain required information had not been individually acknowledged in writing by homeowners before the transaction proceeded.
The Auditor General specifically emphasized the importance of explaining that failure to pay an assessment can lead to penalties, fees, legal costs and tax-certificate proceedings that can ultimately place property ownership at risk.
FortiFi told auditors that some information had been communicated orally during recorded telephone calls or through other documents.
Home Run offered a different interpretation of certain disclosure requirements.
The Auditor General maintained that the applicable law required written disclosures and acknowledgments and kept the finding in the final report.
Then the audit turned to a $100,767 payment
The report goes beyond residential financing and examines FPFA’s internal administration.
Michael Moran served as executive director through December 31, 2024. Wendi Leach became executive director effective January 1, 2025.
According to the audit, Moran submitted his resignation on December 2, 2024.
His February 2023 employment agreement provided for as much as 52 weeks of severance pay if he were terminated without cause.
The Auditor General concluded that applicable Florida law limited such compensation to 20 weeks.
Ultimately, however, the payment in question was not made under that severance provision.
Instead, FPFA and Moran entered into an Employment Termination and Transition Services Agreement.
Under the agreement, Moran was to receive $100,767 for transition services covering January 1 through June 30, 2025.
According to the Auditor General, the agreement did not establish specific duties, measurable performance standards or adequate mechanisms for monitoring the services provided.
Moran submitted an invoice for the full $100,767 on January 3, 2025.
FPFA paid it on January 13.
In other words, the entire amount was paid more than five months before the transition-services period was scheduled to end.
What services were performed?
This is one of the most sensitive findings in the report.
According to the Auditor General, despite requests for supporting documentation, FPFA did not provide records demonstrating what services the former executive director performed under the transition agreement.
The audit also raised the question of whether paying the entire amount in advance could conflict with Florida’s constitutional prohibition involving the extension of public credit for private benefit.
An important distinction is necessary.
These are audit findings and legal conclusions advanced by the Auditor General. They are not criminal charges, a judicial ruling or a finding of criminal wrongdoing against Moran or FPFA.
The Sun Post News has not identified in the records reviewed a court ruling determining that the $100,767 payment constituted a crime.
Current executive director’s contract also questioned
The audit raised a related issue involving current Executive Director Wendi Leach.
According to the report, Leach’s January 2025 employment agreement also provided for 52 weeks of severance pay if she were terminated without cause.
Program attorneys argued that the statutory limitation should not apply because agency salaries were funded with non-tax revenues rather than state appropriations.
The Auditor General rejected that interpretation and recommended modifying the contract to limit severance to 20 weeks.
Debit cards, oversight and documentation
Auditors also examined FPFA’s controls over debit-card expenditures.
Government spending records should establish what was purchased, why it was purchased and the public purpose served by the expenditure.
The report found weaknesses involving documentation and independent review.
In portions of the audit sample, FPFA did not provide records that auditors considered sufficient to demonstrate the public purpose of certain expenditures or adequate evidence of independent review and approval.
The Auditor General warned that insufficient independent controls increase the risk that improper expenditures could occur without timely detection and recommended stronger review procedures.
FPFA responded that the expenditures served legitimate public purposes and disputed portions of the audit’s scope and conclusions.
The Auditor General maintained the finding.
Travel and meal expenses also scrutinized
Another finding examined travel expenditures.
Florida law imposes documentation and control requirements on official travel, including authorization, public purpose and reasonable economic methods.
The Auditor General recommended stronger supporting documentation, including agendas, itineraries, attendance records or comparable evidence demonstrating the public purpose of travel.
Auditors also examined subsistence expenses, approvals and use of the agency’s sales-tax exemption.
FPFA disputed portions of the analysis.
Among other arguments, the agency maintained that certain expenditures characterized as entertainment should not be treated under the per-diem requirements applied by auditors.
The Auditor General responded that the applicable statutory provisions for special districts do not provide an exception simply because an expense is characterized as entertainment.
FPFA also indicated that using its tax-exempt status at some hotels could require booking more expensive corporate rates.
Auditors said they were not provided sufficient price comparisons to substantiate that assertion.
The finding remained.
FPFA fought back against the audit
The agency did not accept all nine findings without objection.
FPFA submitted an extensive formal response disputing procedural, factual and legal aspects of the Auditor General’s work.
Among other issues, the agency questioned elements of the audit’s scope and the application of certain state laws to an independent special district.
The Auditor General addressed those objections in the final report.
The office maintained that it possessed statutory authority to conduct the operational audit, that FPFA had been provided an opportunity to respond and that some preliminary findings were modified after additional documentation was considered.
Despite that process, the final report retained nine findings.
That distinction matters.
The report should not be presented as though every interpretation has been accepted by FPFA.
There is a dispute.
But the Auditor General’s findings remained after the agency was given an opportunity to respond.
Who was overseeing the agency?
The audit identifies the FPFA board members serving during the July 2024 through February 2025 audit period.
Michael Steigerwald served as chairman and Cheryl Grieb as vice chair. Jim Ley and Jon Mast also served on the board, while Barbara Revels served through July 15, 2024.
Michael Moran remained executive director through December 31, 2024, before Wendi Leach assumed the position on January 1, 2025.
Those names matter because several audit recommendations extend beyond technical mistakes by a private contractor.
They involve the broader oversight responsibilities of FPFA itself.
Why Kissimmee matters
The connection to Kissimmee requires careful explanation.
The Florida PACE Funding Agency was created through a June 2011 interlocal agreement between Flagler County and the City of Kissimmee.
The agreement established FPFA as a legally separate governmental entity rather than an ordinary department of Kissimmee government.
Therefore, it would be inaccurate to say the City of Kissimmee executed or authorized the $3.7 million in Orange County agreements.
The audit does not say that.
The agreements at issue were executed by Home Run Financing through the FPFA program.
But Kissimmee’s institutional connection cannot simply be ignored.
The city was one of the two governmental entities responsible for creating the agency, and the audit shows that PACE remained available in Kissimmee and unincorporated Osceola County as of March 2025.
That raises an important question for Central Florida residents:
What oversight, representation or accountability authority does Kissimmee currently retain over the independent agency it helped create?
The audit does not fully answer that question.
An important Orange County distinction
The report contains another detail requiring explanation.
An exhibit shows that the Orange County Tax Collector had a 1% collection fee associated with certain PACE assessments.
At first glance, that might appear inconsistent with the finding that Orange County had not authorized FPFA’s residential program.
The audit, however, explains that some jurisdictions listed as no longer being service areas had PACE agreements originating before July 1, 2024, and tax collectors continued collecting assessments associated with those earlier agreements.
Therefore, the existence of older PACE assessments on Orange County tax bills does not necessarily mean FPFA had authorization to originate the 148 newer agreements identified by auditors.
What happens to the 148 Orange County homeowners?
This may be the largest unanswered question in the entire report.
The audit concludes that the agreements were executed in a jurisdiction that had not authorized FPFA participation.
It does not clearly establish what subsequently happened to each of the 148 assessments.
Among the unanswered questions are how many remain active, whether they continue appearing on property tax bills, whether some have been paid off or canceled, whether affected homeowners have any right to challenge the assessments and who could ultimately bear financial responsibility if any agreements were invalidated.
Behind the headline number are 148 properties and potentially 148 household financial obligations.
For those homeowners, this is not simply an accounting question.
It could be a property-tax and financing issue extending over years.
PACE programs face increased state scrutiny
The audit also represents part of a broader change in Florida oversight.
State law now requires the Auditor General to conduct an operational audit of each PACE administrator at least once every three years.
That requirement reflects the unusual nature of the financing mechanism.
PACE can provide homeowners with access to financing for expensive improvements such as roofs, air-conditioning systems, energy-efficiency upgrades and hurricane protection.
But when repayment becomes an assessment connected to the property tax system, consumer protections become especially important.
A homeowner needs to know much more than whether a contractor can begin work without requiring the full cost upfront.
The relevant questions include:
How much will the homeowner ultimately pay?
How long will the assessment last?
What fees and financing costs apply?
Could it complicate refinancing or selling the property?
What happens if the assessment cannot be paid?
And before any of those questions, there is an even more basic one:
Was the PACE program authorized to offer the financing in that jurisdiction in the first place?
The investigation is not over
The Auditor General’s report answers important questions, but it creates several others that directly affect Orange, Osceola and Kissimmee.
The status of the 148 Orange County agreements remains particularly important.
So do the corrective actions FPFA took following the audit, the status of the $100,767 transition-services payment, any changes made to executive contracts, strengthened controls over Home Run and other third-party administrators, and Kissimmee’s current role within the agency’s governance structure.
Another important question is whether the Orange County homeowners were individually informed that their agreements had been originated in a jurisdiction that, according to the Auditor General, had not authorized FPFA participation.
Because behind the $3.7 million are homeowners whose properties became part of those financing arrangements.
And behind the nine audit findings lies an even larger public-interest question:
Who is responsible for watching the government entity capable of placing long-term financial assessments on people’s properties?
Florida’s Auditor General has now provided part of that answer.
The next question is what the responsible agencies and public officials did after receiving it.
The Sun Post News will continue investigating.
