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July 31, 2008

 

$15,000 in Questionable Guernsey Library Purchases Made for Restaurants, Groceries, Beverages, Gifts & Travel

Director’s Husband Also Received Thousands for Computer Repairs

The director of the Guernsey Memorial Library in Norwich made nearly $15,000 in questionable purchases for restaurant meals, groceries, beverages and gifts, according to an audit released by State Comptroller Thomas P. DiNapoli. Auditors also found that the library paid the director’s husband $7,800 for computer repairs and service without proper authority or a written contract.

“When tax dollars are involved, taxpayers should be protected,” DiNapoli said. “And government contracts should avoid even the appearance of a conflict of interest. Groceries and gifts don’t seem like appropriate government expenses, and giving business to family members without a written contract is usually not a good idea.”

DiNapoli’s audit, conducted for the period July 2005 to August 2007, found:

  • the director authorized and processed transactions with little or no oversight by the board, resulting in numerous questionable expenditures including more than $2,100 on travel, more than $1,500 on restaurants, more than $3,000 on food and beverages, nearly $800 on gifts, more than $2,300 on other unsupported purchases from online book vendors, discount stores and grocery stores, and $2,500 to a vendor for a theatrical performance although there was no paperwork to back that up;
  • without the required board authorization, the director paid her husband $7,800 in library moneys for computer repairs and service, and there was no contract or other paperwork describing what kinds of services were performed or how long it took the director’s husband to do the work;
  • some purchases included the payment of sales taxes even though the library is generally exempt from sales tax;
  • against the backdrop of an inadequate procurement policy, the director expended $1,400 for landscaping without getting quotes from more than one vendor, claiming it was a public emergency, and $9,646 for six computers without necessary board authorization;
  • controls over cash receipts were inadequate making cash vulnerable to loss or theft; and
  • not only did the board not audit claims, there is little evidence in the minutes that the Board even considered financial issues.

DiNapoli recommended that library board officials ensure greater management and oversight of the library’s financial operations by:

  • establishing a credit card use policy that clearly indicates who’s allowed to use the cards, provides dollar limits for purchases, and requires documented descriptions of the nature of the card purchases;
  • deciding whether a petty cash fund should exist and if so set up a policy to determine who’s allowed to use the fund, and for what types of expenditures, and document what the purchases are for;
  • reviewing Article 18 of state General Municipal Law and establish procedures to avoid future conflicts of interest;
  • amending the library’s purchasing policy to be consistent with the General Municipal Law and require that purchases over $10,000 and contracts for public work exceeding $20,000 be subject to state bidding requirements;
  • auditing all claims prior to payment to ensure that library officials are spending the public’s money for necessary library purposes and not paying sales tax to vendors on tax exempt transactions;
  • ensuring that the director abides by the purchasing policy; and
  • placing stricter controls over cash transactions, requiring among other things the use of separate cash drawers, issuance of receipts for moneys received, and individual computer login accounts for library personnel.

Board officials generally agreed with DiNapoli’s recommendations, and indicated they would take corrective action.

Click here to view the audit.

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