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Maragos: Consumer Affairs Not Adequately Protecting Nassau Residents And Lost Potential Revenue Of $2.9 Million

LongIsland.com

80% of the businesses selected for testing were not licensed, and 31% of total violations assessed appear unresolved.

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Nassau County Comptroller George Maragos.

Photo by: George Maragos, via YouTube.

Mineola, NY - September 7, 2017 - Nassau County Comptroller George Maragos released an audit of the Nassau County Office of Consumer Affairs (“Consumer Affairs”) which revealed that Consumer Affairs is failing to implement laws, adequately inspect business establishments, verify the accuracy of weights and measures devices, properly utilize pre-numbered invoices, nor maintain adequate violation logs. Auditors estimated that the poor internal control environment resulted in $2.9 million of lost County revenue opportunities during the period January 1, 2013 through December 31, 2015.  Most significantly: the lack of Item Pricing Waiver inspections resulted in potential missed violations and a loss of approximately $1.5 million in fees, 80% of the businesses selected for testing were not licensed, and 31% of total violations assessed appear unresolved. 
 
“The Department of Consumer Affairs is deficient in its mission to protect residents through adequate inspections of business establishments and to collect fees and fines,” said Comptroller George Maragos. “It would seem that nothing less than a complete overhaul of the department’s control processes would be required to improve efficiency, strengthen enforcement and instill public confidence.”
 
The major findings of the audit are as follows:
 
  • Lack of Item Pricing Wavier Inspections: The lack of these inspections reduces the incentive for big box stores to enroll in the Item Pricing Waiver Program. Waivers allow businesses that meet certain standards to apply for a waiver to avoid the expense of having to individually price every item for sale,  as otherwise required. The estimated lost revenue approximated $1.5 million.
  • County Laws Not Implemented: Consumer Affairs does not fingerprint Home Improvement contractors as required by the County’s Administrative Code. In addition, Consumer Affairs has been lax in their oversight of the Home Improvement Industry Board and has not instituted the Board of Consumer Affairs and the Invasive Species Committee as required by County’s Administrative Code.
  • Businesses Not Licensed or Inspected: Eighty percent of businesses tested were not licensed, resulting in $36,000 of lost revenue and decreased consumer protection.  Fifteen percent of the establishments tested had not received the required annual weights & measures inspections.
  • Inadequate Financial Controls: $940,000 of potentially unaccounted for invoices were identified by the Auditors, due to the use of haphazardly issued invoice books and using invoices out of sequence for over five years. It was only after tedious follow up efforts by both the Auditors and Consumer Affairs personnel, that the unaccounted for invoices were reduced to $36,629.
  • Inaccurate Violation Tracking Logs: Annual logs to track violations did not provide enough updated information to determine the current   status of unpaid violations without manually reviewing each individual violation case folder.  Auditors estimate that $393,147 or 31% of total violations appear unresolved.
  • Outdated Information Technology Systems: The Weights & Measures Division utilizes four separate databases for payments and inspection record keeping purposes which present various control and process inefficiencies.  The main database does not contain all financial records and cannot be reconciled to the County’s financial system.
For a copy of the report, please connect with Nassau County Comptroller Maragos online.