NY Comptroller Auditing Ocean Beach

by FIN |

(FIN File Photo by Lauren Chenault)

By Timothy Bolger ~ New York State Comptroller Thomas DiNapoli’s office is auditing the Village of Ocean Beach for the first time in recent memory, the Fire Island News has learned.

A spokeswoman for the comptroller confirmed the audit is underway, but declined to discuss specifics and she could not say when the results would be released to the public. Village officials downplayed the significance of the state’s chief fiscal officer reviewing Ocean Beach’s finances.

“Our audits generally focus on state funding,” Tania Lopez, DiNapoli’s spokeswoman, told the Fire Island News. “However, it is our general policy not to comment about the specifics of an audit while it is being conducted.”

The state comptroller’s office routinely audits the hundreds of government agencies statewide to ensure that state and local government entities use taxpayer money effectively and efficiently.

For example, the most recent municipal audits released from DiNapoli’s office found Copiague Fire District officials did not always use a competitive process while procuring goods and services, City of Glen Cove Industrial Development Agency did not properly approve and monitor projects or take action when goals were not met, and the Village of South Floral Park did not provide appropriate oversight and management of budgets and fund balance or ensure annual audits were completed.

“Just a routine audit, although I can’t remember the last one,” said three-term Ocean Beach Mayor James Mallott. “I’m sure we’ll be criticized but they’re mostly looking at policies and purchase orders, and it won’t be complete till late fall at the earliest.”

The state’s auditors regularly detail findings in depth and can make recommendations for corrective action when errors are found. Localities are generally given an opportunity to provide written responses to findings made in the comptroller’s audits. The auditors’ findings and village officials responses are typically included in the final version upon the release of such documents. But state audits also tend to be more critical than the annual independent audits that villages have performed each budget season.

For example, when Ocean Beach commissioned the Port Jefferson Station-based accounting firm of Cullen & Danowski, LLP to perform an independent audit of the village’s budget, the auditors customarily declined to publish critiques of the financial findings.

“As part of obtaining reasonable assurance about whether the Incorporated Village of Ocean Beach’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts,” the auditors wrote in a report released May 31, 2020. “However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.”

The same accounting firm also performed recent audits of the village’s justice court and its Superstorm Sandy aid grant spending.

The state’s audit puts under the microscope the work of Ocean Beach Village Clerk-Treasurer Steve Brautigam, who manages the village’s budget and previously held similar positions in the Town of Southampton and Village of Greenport over the past three decades. He did not respond to a request for comment on the audit.

The last time the state comptroller’s office audited the village was more than a quarter-century ago, in 1995, when H. Carl McCall was the state comptroller, according to Lopez. The audit, which was obtained by the News, reviewed the village’s financial records for the fiscal year that began on June 1, 1993 and ended on May 31, 1994, when Mayor Michael Youchcah was in office. Among the issues that the auditors found in that report were the village had not properly advertised bids for some purchases, not properly verified claims vouchers for expenses, and had an unreserved, unappropriated general fund balance that amounted to 28 percent of the village’s $1.9 million budget appropriations, as well as other findings.

“We were informed by a village official that the fund balance in the general fund is needed as a reserve to provide funding for storms, hurricanes and other natural emergencies,” the 1995 audit stated. “The maintenance of a reasonable fund balance represents a measure of the village’s financial health and a cushion against unexpected occurrences. However, the maintenance of an excessive fund balance benefits future taxpayers at the expense of current taxpayers.”

The comptroller’s office recommended: “The Board of Trustees should review its budgeting practices to more accurately estimate the amount of fund balance that will be available at the end of the fiscal year to finance operations in the subsequent year so that it may be appropriated in the budget, thereby reducing the real property tax levy.”

What will the comptroller’s office find this time? Stay tuned.

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