State comptroller to audit Nassau County

The New York State Comptroller’s Office will audit Nassau County’s contract procedures, according to a letter sent by the state Deputy Comptroller Steven Hancox to County Executive Ed Mangano, dated Jan. 10.

At a Dec. 22 Nassau Interim Finance Authority meeting between directors and board members, NIFA officials declared their intent to request that the comptroller’s office perform the audit, citing “several irregularities” in the county’s contract process.

NIFA, which took control of the county’s finances last January, is required to review any county contracts in excess of $50,000.

Kenneth Stack, the NIFA chairman, said he received phone calls and emails suggesting that contracts that NIFA had rejected were still being performed. “There have been suggestions that the contract provisions that NIFA has undertaken have not been followed through with by the county,” he said.

Additionally, Stack said there have been instances regarding legal contracts in which work has been conducted before the contract was formally approved by Legislature and NIFA. “These are attorneys; they’re supposed to know that contracts had to be approved by the Legislature, and also had to be approved by NIFA, and yet, apparently, there still was work done,” Stack said.

Hancox’s letter said the audit would “be designed to evaluate the county’s compliance with appropriate procurement procedures and the requirements of NIFA’s enabling legislation.”

In response to the upcoming audit, Mangano wrote in a prepared statement, “There’s no government that has more oversight than Nassau County, where contracts are approved by a 19-member legislative body, the comptroller, the Independent Office of Budget and Review, and NIFA prior to execution by the county executive. Additional oversight is always welcome.”

NIFA Director George Marlin, who is chairman and chief operating officer of the Philadelphia Trust Company, expressed concern with the county’s “lack of transparency” in its contract procedures. “Not only have there been delays in paying legitimate vendors, particularly charities, who provide essential services for the poor and disabled, but it appears the county has permitted vendors to perform non-emergency services without legislative or NIFA approval,” he said.

Marlin said the county recently submitted overdue bills for legal contracts that NIFA had not approved, which equate to $6.8 million –– three times the amount approved in the 2011 county budget. “In my judgment, such county actions are a flagrant abuse of power, and therefore an expert to review such bills is necessary,” he said.

NIFA Director Robert Wild, who previously served as chairman of the nonprofit United Way of Long Island, said that certain charitable organizations have not received funding that they are, by contract, entitled to. “It seems to me that the county has a moral and legal obligation to live up to those contractual obligations,” Wild said.

Nassau County Legislator Dave Denenberg, a Democrat who represents the 19th District, said there have been numerous contracts signed off by the Legislature’s Republican caucus that were presented to the full Legislature after work had already begun. “As a legislator who has consistently voted against personal-service contracts for politically connected insiders, which have cost us tens of millions, I welcome” the audit, Denenberg said.

He cited a sewage privatization contract with Morgan Stanley that did not reach the Legislature until 18 months after work began. “The bottom line is we’re laying off workers and spending an unprecedented amount on personal-service contacts that are typically to politically connected firms,” said Denenberg.

Peter Schmitt, a Republican who is the Legislature’s presiding officer, could not be reached for comment by press time. Officials from NIFA and the state comptroller’s office said they do not offer comment on ongoing audits.