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DiNapoli: Inappropriate Payments Cited In Kingston Audit

Comptroller’s Audit Leads to Arrest of Former Fire Chief

The city of Kingston made $23,000 in improper payments to employees for unearned leave time, according to an audit released today by State Comptroller Thomas P. DiNapoli. As a result of the audit, former fire chief Richard Salzmann was arrested and charged by Ulster County District Attorney D. Holley Carnright with offering a false instrument for filing in the second degree, a class A misdemeanor.

“These errors occurred because the city had lax processes and relied on unverified, incomplete and inaccurate records,” said DiNapoli. “I would like to thank District Attorney Carnright and his staff for making sure those who try to cheat the system are held accountable for their actions. I also appreciate the efforts of Kingston Mayor Shayne Gallo’s administration to recognize these issues and bring them to the attention of my office. The mayor and his staff, however, will need to continue to work hard to ensure employees only collect compensation they’re entitled to receive.”

"It is extremely helpful to our office to have the benefit of the assistance of the State Comptroller. Once again, the Comptroller's office has served the people of Ulster County well,” said District Attorney Carnright. “We have been working with Comptroller DiNapoli and Mayor Gallo on this matter. I know that Mayor Gallo has already taken the administrative steps necessary to correct the difficulties outlined in this audit, which arose from procedures employed prior the mayor’s administration."

City employees earn a fixed number of days each year for vacation, illness and personal use. Typically, local governments provide cash payments to employees for all or a portion of their accrued leave time when they leave service or periodically if leave has not been used and cannot be carried over for use in future years.

DiNapoli’s auditors reviewed a city-wide sampling of administrator and employee records and found accruals were overstated by 102 days for 35 employees and understated by 21 days for 18 employees.

Due to the problems identified, DiNapoli’s office expanded the audit period back to Jan. 1, 2010 to include two former city fire department chiefs.

Auditors found that former fire chief Salzmann was paid about $5,500 more than he was entitled to and former assistant fire chief Chris Rea received inappropriate payouts totaling $16,600. Specifically:

• In 2010, Chief Salzmann received a lump sum buyout payment of $3,100 for 37 vacation days although his employment contract only entitled him to convert a maximum of 30 vacation days per year for pay. Then in 2011, Salzmann converted 129.50 compensatory hours to a cash payment, even though his contract only allowed payment for the first 80 hours of extra time.
• Assistant Chief Rea received $10,800 for unused supplemental time although his individual employment contract did not provide this benefit. In addition, Rea was paid $5,800 for leave accruals that did not exist.

DiNapoli’s auditors made a number of recommendations to the city, including:

• Recover inappropriate payments and adjust employee leave accrual records as necessary;
• Review employment policies, agreements and contracts and provide clear guidance as to which benefits are intended for each category of employees;
• Develop comprehensive policies and procedures to address the maintenance of leave time records and ensure that accurate information for time accruals is maintained, monitored and periodically reconciled; and
• Establish internal control procedures to ensure that leave accrual payments are made in accordance with applicable collective bargaining contracts, employment agreements or city council action.

In a previous audit, DiNapoli found the city may have overpaid $7,790 to police department employees for time they might not have worked. In that case, auditors found department officials failed to review time and attendance schedules and did not require department employees to document their hours worked.

City officials agreed with the Comptroller’s recommendations and indicated many changes have already been implemented. The full response from the city is included in the report.

For a copy of the report visit: http://www.osc.state.ny.us/localgov/audits/cities/2013/kingston.pdf