State Comptroller Alan G. Hevesi today announced a series of audits to review potential abuse of the State pension system by six sanitary districts on Long Island. The audits come in response to information provided by Nassau County Comptroller Howard S. Weitzman, who uncovered a lack of controls and fiscal mismanagement at three of the Districts that participate in the New York State and Local Retirement System (NYSLRS), which is administered by Hevesi.
Building on findings of the Nassau Comptroller's office , State auditors will also conduct an in-depth audit of Hempstead Sanitary District #1 – which serves the Five Towns and Valley Stream South – to examine time and attendance rules, payroll policies, use of personal service contracts and other employment-related issues.
The audits will start immediately.
“Comptroller Weitzman has already determined that Nassau County residents pay the price for excessive compensation, extravagant spending and a lack of adequate record keeping in the form of higher costs for trash removal,” Hevesi said. “Our examination will determine if the six sanitary districts that participate in the Retirement System are reporting retirement credits accurately, so that we can ensure that taxpayers are not paying for pension benefits to which employees are not entitled.”
The six districts that participate in the NYSLRS and will be audited are:
Town of Hempstead Sanitary District #2
Town of Hempstead Sanitation District #6
Town of Hempstead Sanitary District #1
Town of Hempstead Sanitary District #7
Roslyn Garbage District (North Hempstead)
Town of Hempstead Sanitary District #14
Together, these Districts report 433 employees to the retirement system.
The Nassau Comptroller's office reviews of Sanitary Districts to date have covered Town of Hempstead Sanitary Districts #1, #2 and #6, as well as two other districts outside the Town of Hempstead, that do not participate in the NYSLRS. Weitzman initiated the series of audits after the County Assessor and others pointed out that the revenue raised and expenditures made by special taxing districts such as these sanitary districts occurred with little public scrutiny or governmental oversight.
Weitzman said, “When we issued our audits of five Nassau County sanitary districts last month, we felt strongly that our findings contained ‘red flags’ suggesting the possibility of fraud. Accordingly, we referred these findings to the Nassau County District Attorney and State Comptroller Hevesi. We are pleased that both offices have now launched their own investigations. The waste uncovered at these sanitary districts occurred because, prior to these audits, there has been almost no public oversight of these operations. It is past time for these multi-million dollar public agencies to be run efficiently and in the taxpayers’ interest.”
Hevesi’s auditors will determine if the districts have been:
- Properly reporting time worked and salary for employees;
- Keeping proper records, including time cards and logs of activities for appointed officials;
- Reporting full time status for only those employees working full time;
- Accurately enrolling employees to membership and notifying part time employees of their right to membership as required by section 45 of the Retirement and Social Security Law; and
- Properly classifying employees to ensure that independent contractors are not being reported as employees.
State auditors will also conduct a comprehensive audit of Town of Hempstead Sanitary District #1. The district, which was found to have among the highest garbage collection costs in Nassau County, generated some of Weitzman’s most disturbing findings including excessive and unexplained payments to commissioners and top staff, excessive travel and meal allowances, and inadequate tracking of hours worked by employees. The District’s treasurer had four reported public sector jobs and more than 700 work days reported to the NYSLRS for one year. District employees refused to cooperate with auditors from the Nassau County Comptroller's office and effectively prevented the audit from being completed.
“Such unwillingness to cooperate by the subject of an audit raises serious questions,” Hevesi said. “In the case of Town of Hempstead District #1, the preliminary findings are so troubling that we will pursue a more thorough audit using all appropriate and necessary legal resources available to my office.”
The Nassau County Comptroller's audit of Town of Hempstead Sanitary District #2 (Baldwin area), issued on September 21, found millions of dollars wasted every year on administrative expenses, including unnecessary and overpriced insurance sold to the District by a no-bid broker and personal use of 11 district cars and trucks. An audit of Hempstead's Sanitary District #6 found that there was no timekeeping for the District's employees, as well as various other financial control weaknesses. All three of the districts in the Town of Hempstead allowed sanitation workers to work as little as 15-20 hours a week, although they are paid full-time salaries.
Garbage collection in Nassau is arranged by the county’s towns, cities and villages within the county or by 24 town-created special sanitary districts. These local sanitary districts, some of which have elected commissioners, provide services only to residents and commercial establishments within their borders, and district expenses are funded through local tax levies.
The New York State and Local Retirement System offers retirement benefits for members who reach specific ages or have completed a specified number of years of service, depending on the system and plan in which employees are enrolled. At the end of fiscal year 2004-05, there were a total of 982,009 members, retirees and beneficiaries, and 2,993 participating employers including local governments, authorities and other governmental entities around the State. Contributions from enrolled employees and their employers are managed by the New York State Comptroller who invests the funds to ensure availability of resources to meet obligations to retirees, members and beneficiaries, and to moderate increases in required employer contributions.
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