New York State Comptroller Thomas DiNapoli’s office will initiate an audit of Nassau County’s contracting procedures, which a state board that oversees the county’s finances had requested last month.
Deputy comptroller Steven Hancox, in a letter Tuesday to Nassau Interim Finance Authority chairman Ronald Stack and County Executive Edward Mangano, cited “the significant nature of Nassau County’s financial operations, and New York State’s interest in ensuring the effective operation of state-imposed fiscal controls.”
The audit, Hancox said, would examine the county’s compliance with procurement procedures and the requirements of NIFA’s enabling legislation.
NIFA, lacking an audit staff, called on DiNapoli’s office. “We make this request because several irregularities have come to our attention,” Stack wrote DiNapoli on Dec. 23.
“In addition, since we are part of the review process, your review would provide the independence that is required.”
A spokeswoman for DiNapoli said such audits usually take six to 12 months to complete, depending upon their complexity.
“Until we get in there, we don’t really know what the particulars will be,” she said. “Our general policy is not to comment about the specifics of an ongoing audit.”
NIFA, which imposed financial control last Jan. 24, voted for the audit request at its directors meeting late last month in Mineola, N.Y., saying the county, which covers Long Island suburbs east of New York City, had run up nearly $7 million in legal fees.
Stack, in his letter to DiNapoli, said contracts valued at $50,000 or greater need NIFA approval.
“These are attorneys. They’re supposed to know that the contracts have to be approved by NIFA and approved by the Legislature,” Stack said at the meeting.
In a statement issued Wednesday, Mangano said: “There’s no government that has more oversight than Nassau County, where contracts are approved by a 19-member legislative body, the comptroller, Independent Office of Budget and Review, and NIFA prior to execution by the county executive. Additional oversight is always welcome.”
Fitch Ratings last month lowered Nassau’s general obligation bonds to A-plus from AA-minus, saying the county depended excessively on sales tax revenue and constant use of stopgap measures to close budget deficits.
The rating agency added that NIFA’s control has not produced the desired fiscal discipline.
Moody’s Investors Service rates Nassau’s GOs A1, while Standard & Poor’s rates them an equivalent A-plus.
The relationship between NIFA and the county has been contentious. Nassau sued the agency over the fiscal control before dropping the lawsuit last March.
NIFA twice rejected the county’s budget and four-year fiscal plan before approving it in December, but only after criticizing Nassau officials over the level of borrowing and prematurely assuming cost savings from layoffs and concessions.