Comptroller to Sanitary District:Improve your record-keeping

In an audit report released last week, the state comptroller’s office recommended that Sanitary District 1 improve its overall control of employee records and financial data.

Sanitary District 1 collects the trash, recycling and other debris from more than 50,000 residents and a variety of businesses and institutions in the villages of Cedarhurst, Lawrence, Hewlett Bay Park, Hewlett Harbor, Hewlett Neck and Woodsburgh as well as Hewlett, Inwood, Woodmere, and the unincorporated areas of Lynbrook and Green Acres.

The audit, of the district’s operations in 2014, found that district officials did not enforce certain provisions of its collective bargaining agreement with the Civil Service -Employees Association or resolutions by the district’s board of commissioners, or maintain accurate leave records for its employees — vacations, sick days and the like. The comptroller’s office also found the district’s financial data to be “inaccurate and incomplete.”

The 2012, 2013 and 2014 financial reports were not audited in a timely manner, the comptroller concluded. Nine employees were paid $86,704 for 260 unused sick and vacation days without proper authorization, the audit stated, and 16 employees were paid $9,127 for 30 days of holiday bonus pay they were not entitled to.

One employee was overpaid $4,928 for 19 unused sick days upon retirement. Seven employees were paid $85,807 for 250 sick and vacation days, that were not deducted from their leave balances, resulting in overstated balances and the potential for future overpayments.

“Our procedure with salary benefits was that our clerk wrote the sick time and vacation deductions in a book, but never did the math,” District Superintendent George Pappas acknowledged. “We are correcting these things, and there was no fraud.”

Pappas added that for several years, district officials have kept a sharp eye on spending, have reduced the work force from about 100 full-time employees to 70, and received permission from the union to hire 20 part-time workers.

The audit stated further that district officials did not properly monitor life insurance benefits, and provided benefits without the authority to do so, which caused the district to spend $17,555 more than necessary for group term life insurance benefits. In addition, officials did not receive a $2,430 payment from a commissioner for an additional life insurance policy.

The district’s treasurer, Sal Evola, did not prepare bank reconciliations in a timely manner, the comptroller’s office concluded, and did not provide the board with accurate and timely financial reports.

A review of 60 bank reconciliations for the district’s five bank accounts during the audit period showed that 48 were prepared more than 30 days after the statement closing dates — as many as 279 days later. One March 2014 bank statement was not reconciled until the following January.

“We now have built-in redundancies and more checks and balances,” said Board Chairman Jim Vilardi, who wrote the district’s response letter and detailed, in eight pages, corrective actions that he said have been implemented. “We also placed the treasurer on probation for one year.”

Among the other remedies outlined by Vilardi are the hiring of a compliance officer to act as an internal auditor, corrections of the clerical errors and an order that the commissioner to pay the $2,430 for life insurance by Dec. 31,

The comptroller’s recommendations call for the district to enforce the collective bargaining agreement’s provisions to ensure that employees are paid only the salaries and benefits to which they are entitled; implement procedures to ensure that employees’ leave balances are accurate; review the accuracy of holiday bonus pay; and review insurance policies with its broker to ensure that the correct life insurance premiums are paid.

In addition, the treasurer must prepare timely and accurate bank reconciliations and ensure that any discrepancies are promptly identified and resolved.
Brian Butry, a spokesman for the comptroller’s office, said that many local government officials downplay the results of these audits, but he hopes that

Sanitary District I officials “understand the seriousness of giving benefits employees were not entitled to.” Butry added, “We certainly could do a follow-up, but we trust local officials to take action and implement the submitted corrective action plan.”

Have an opinion about the comptroller’s audit report? Send your letter to the editor to jbessen@liherald.com.