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April 30, 2008

DiNapoli: Brookhaven Capital Projects
Cost Overruns More Than $2 Million

Town Officials Failed to Monitor Spending During Course of Projects

Cost overruns for Town of Brookhaven public works projects surpassed $2 million because town officials did not closely monitor the progress of the projects, according to an audit released by State Comptroller Thomas P. DiNapoli.

“Taxpayers entrust their public officials to use public resources wisely,” said DiNapoli. “This means keeping an eye on where money is going and knowing whether projects are costing more than originally authorized. It also means ensuring that if a project runs over budget that there’s a good reason for it and that there is money there to pay for it,” said DiNapoli.

Spending for 43 of the town’s approximately 500 capital projects surpassed what the board authorized by a total of $2.2 million. This included the Mastic pool project which went over budget by $681,144 in December 2006. Money had to be diverted from other projects to cover the cost. Furthermore, between June 2002 and December 2006, the town paid a project manager for the pool project a total of $568,927 -- $508,927 more than the board had authorized.

The audit, which covered the period January 2002 to December 2006, found that officials did not request or receive periodic reports that compared expenditures to their spending authorizations to ensure that money was available to pay for the work. Thirty-five project change orders totaling $372,870 did not receive town board approval prior to the work being done. In fact, change order work was often completed before the board even knew about the change orders and the additional costs. As a result, the board was unable to control spending or allocate additional appropriations when a project went over budget.

DiNapoli recommended that town officials:

  • establish adequate accounting records for each spending authorization;
  • identify and account for moneys in the town’s capital project bank and investment accounts;
  • provide periodic reports to the board for board review, to prevent over-expenditures;
  • increase the spending authorization for the Mastic pool project;
  • ensure that all contract changes are backed up by itemized change orders prepared by the contractor, and reviewed prior to submission to the board to ensure the changes are necessary;
  • review change orders to determine if the change is of such a magnitude that it should be advertised for competitive bids;
  • ensure that change orders are not commenced or paid for until they get board approval; and
  • compare invoices to corresponding resolutions and contracts before any payments are made.

Town officials generally agreed with most of the Comptroller’s recommendations, but disagreed with the finding that officials kept inadequate accounting records. They also disagreed with the finding that there were no unauthorized expenditures for the Mastic pool project. The town’s full response is included in the audit.

Click here for a copy of the audit.



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