Maragos: Plainview Water District Audit Uncovered Major Fiscal and Operational Mismanagement
Business & Finance, Local News, Politics
By Long Island News & PR
Published: December 21 2017
New Superintendent is Making Strides to Effect Improvements.
Nassau County Comptroller George Maragos.
Photo by: Chris Boyle
Mineola, NY - December 21, 2017 - Nassau County Comptroller George Maragos released a two year, 2015-2016, audit of the Plainview Water District, which uncovered numerous operational, personnel, fiscal control deficiencies, possible abuse of public funds and higher than necessary rate increases exceeding the 2% tax cap by as much as 300%. The District provides water to approximately 34,000 residents of Plainview, and portions of Old Bethpage and Syosset. The findings indicate that district residents were paying some of the highest annual Commissioner stipends which is more than double to comparable water districts such as Port Washington and Glenwood. Poor budgeting practices resulted in an excessively high fund balance of $4.8 million in 2016 or 66% of annual expenditures. The new superintendent and business manager have indicated that they are taking actions to correct many of the audit findings.
“The Plainview Water District was a case study in mismanagement run like a bad family business and not as a public utility. Everywhere the auditors looked they found fiscal, administrative, and control deficiencies”, said Comptroller George Maragos. We are pleased that the new superintendent has accepted the audit recommendations and seems eager to implement changes.”
Major findings of the audit included:
In both 2015 and 2016, the budgets included tax levies that were 6% higher than the previous year’s budget, which exceeded the State’s 2% tax levy cap. The resulting unexpended surplus was not used to lower rates.
Commissioner compensation was among the highest for water districts in Nassau County by more than double to comparable water districts such as Port Washington and Glenwood.
Supplemental benefits such as dental, optical, AFLAC and life insurance averaged almost $6,000 per fulltime employee, per year, an extraordinary amount. Total employee benefits averaged $35,000 per full time employee per year.
During the two year audit period there was 162 million gallons of unaccounted water loss unbeknownst to the District.
During the two year audit period the District employed four full-time and seven part-time employees, approximately 40% of staff, who were immediate family members of two Commissioners and two former Commissioners, the former Superintendent and the Clerk to the Board.
A lack of managerial oversight allowed the Clerk to the Board to grant excess leave to the spouse, and to process unapproved leave requests, including 55 hours of leave for herself.
Approximately $7,000 in payouts to three employees upon their separation from the District were not adequately documented or explained, and were not in accordance with District policies or an employment agreement.
The District’s records lacked documentation to substantiate the validity and appropriateness of travel and conference expenses totaling over $44,000. None of the reimbursement claims submitted used a standardized travel claim voucher, which violated the District’s own policy.
Late payment fees were not applied in accordance with Town Law and District policy. In addition, waivers of late fee penalties were not approved by the Board or documented in Board Minutes.
The District lacked adequate internal controls over purchasing and did not follow New York State Law or its own purchasing policies in 73% of the purchases reviewed. The purchase and use of fuel was not adequately monitored.
The Plainview Water District Administration responded positively to the Comptroller’s audit report. In August 2017 the District hired a new Business Manager, a CPA with extensive experience in governmental accounting, financial reporting and compliance with laws and regulations.