http://www.newsday.com/news/clerk-s-practices-questioned-1.641443

County Clerk’s Practices Questioned

Nassau Comptroller calls office methods of accounting ripe for fraud, and fee and tax waivers easily granted

March 21, 2007 by REID J. EPSTEIN / reid.epstein@newsday.com

Nassau Comptroller Howard Weitzman found “serious weaknesses” in the oversight and accounting of hundreds of millions of dollars in County Clerk Maureen O’Connell’s office, according to an audit released yesterday.

Weitzman called on O’Connell to record financial transactions on the county’s financial system and asked State Comptroller Thomas DiNapoli to begin a “comprehensive” audit of the clerk’s office. He also called on DiNapoli to audit every clerk’s office in the state.

O’Connell, whose office is directly across the hall from Weitzman’s, said she had not seen the final version of the audit and could not speak about its specifics.

But O’Connell, a Republican, cast doubt on Weitzman’s neutrality, accusing the Democratic comptroller of looking to score political points. Though the audit began more than a year ago, word of it leaked in January during O’Connell’s failed state Senate run.

The Nassau clerk’s office, Weitzman said, accounts for the more than $300 million in annual revenue on spreadsheets, rather than the county’s double-input accounting system he described as more reliable. Weitzman called the clerk’s accounting practices a “mom-and-pop approach” and said the lack of professionalism leaves the office ripe for fraud.

“The Nassau County Clerk’s office has fewer financial controls in place than did the Roslyn School District when it failed to detect a multimillion-dollar embezzlement and fraud,” Weitzman said.

Weitzman did not accuse anyone in O’Connell’s office of fraud and said his investigators did not find money missing, though he said it would be impossible to know whether money is missing because of the accounting practices.

Weitzman also said O’Connell and her staff deliberately put up a series of roadblocks that kept investigators from witnessing some office interactions and from viewing certain documents. But she said her office “cooperated fully.”

The audit found that O’Connell’s deputy, James Whitton, has responsibility over virtually all of the office’s financial transactions. Whitton, the audit said, invested 99 percent of the office’s money in certificates of deposit at State Bank of Long Island, rather than in the county treasury, where Weitzman said it would earn a higher interest rate.

O’Connell replied that her office had a deal with State Bank to get the “highest possible” interest rate, as well as waived fees for wire transfers. She said she would “not consider” integrating fees she collects with the county’s treasury.

Weitzman also found cashiers in the clerk’s office can and do waive fees and taxes without a supervisor’s approval. During three days in December 2005, more than $398,000 in charges were waived or reduced by cashiers without supervisors signing off, the audit found. Investigators were not able to determine for whom the fees were waived or why, Weitzman spokesman Allen Morrison said.

The audit, which began in 2006, became an issue in O’Connell’s state Senate run in January, when Craig Johnson, who defeated O’Connell, called on her to release the draft audit. She declined to do so.

What the audit found

• One man, Deputy Clerk James Whitton, is responsible for almost all of the office’s financial transactions. The office does not record its transactions on the county’s accounting system. Rather, it uses spreadsheets, which can be altered manually without review.
• The office, without soliciting competitive bids, relies on the State Bank of Long Island to handle virtually all of its deposits.
• Cashiers have the ability to waive or change fees without a supervisor’s approval.
• Numbers in the clerk’s annual report are inconsistent.
• There is no written policy or manual to govern the way the office manages funds, processes mail or keeps its books.