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July 21, 2010



DiNapoli: Former Director Used Nearly $100,000 in
ComLinks Money For Her Own Personal Use

Board Failed to Act on Early Complaints About Abuse;
DiNapoli Referring Report to District Attorney



Former ComLinks Chief Executive Officer Nancy Reich diverted nearly $100,000 in grant moneys to support a lavish lifestyle for herself, according to an audit released today by State Comptroller Thomas P. DiNapoli.  She was able to do this because the ComLinks board of directors failed in its oversight role of her and because ComLinks’ chief financial officer did not take steps to stop it.  The board eventually took action against Reich but it was only after employees complained to DiNapoli’s auditors and the news media about the abuses.

DiNapoli has sent his report to Franklin County District Attorney Derek P. Champagne.

“What happened at ComLinks was awful – on so many levels.  When you’re charged with helping people who need it, you don’t take the money meant for them and stick it in your pocket.  These are taxpayer dollars meant to deliver services to those greatly in need.  These things happened either because someone was asleep at the switch or people let the executive director do whatever she wanted with a wink and a nod. She had a license to do whatever she wanted.”

The findings in DiNapoli’s report include the following:

  • ComLinks reimbursed Reich for expenses without any backup paperwork to explain what they were for.
  • When traveling for conferences, Reich would often remain after they were over, and pay for things like Swedish massages and charge these expenses to ComLinks.
  • ComLinks paid more than $8,000 so Reich, the CFO, Reich’s secretary and an outside attorney could attend a conference in San Francisco.
  • The CFO failed in her professional responsibilities as a CFO and a Certified Public Accountant because she served Reich’s interests rather than ComLinks and taxpayer interests.
  • The then program director provided auditors with invoices that falsely indicated expenses for ComLinks but the expenses were really for appliances purchased for Reich’s personal home.
  • The program director himself (who was hired as executive director following Reich’s departure) used his position to hire his wife and his son’s former football coach to work for ComLinks. He also used ComLinks’ taxpayer dollars to pay for expenses for him and his wife to remain in Florida for a mini vacation after he attended a work-related conference there.
  • The board purchased vehicles from a board member who owned a car dealership in Malone.
  • Arriving the day before a conference in Syracuse, Reich had room service deliver six glasses of wine. The next day she said she could not attend because she had the “flu” but she ordered an eggs Benedict breakfast from room service, and charged it to ComLinks (she was later directed to reimburse the agency for the wine).
  • Although state grants do not allow for the purchases of gifts and flowers, ComLinks spent at least $6,682 on gifts and flowers.
  • Contrary to state policy, Reich used $2,477 in ComLinks money to cover her membership at the Malone Golf Club and $1,839 to attend fundraisers for then gubernatorial candidate Eliot Spitzer.
  • All these transactions and more occurred on the watch of the CFO, who is still employed by ComLinks.
  • 40 staff members signed a petition to the ComLinks board raising allegations of wrongdoing, but the board ignored it.  The petition resulted in DiNapoli’s audit.
  • Reich threatened employees with loss of their jobs when they questioned her actions.
  • Meantime, a CPA was fired after he informed ComLinks officials he had concerns with the fair presentation of ComLinks’ financial statements.
  • The board never took action until employees went to the news media about Reich’s abusive behavior and inappropriate expenses.

The abuses were flagrant and the board should have identified and responded to them through its oversight role.

DiNapoli recommended that the ComLinks officials:

  • Take legal action against Reich to recover grant moneys used for inappropriate and fraudulent expenses.  
  • Enhance financial controls to prevent fraud, waste and abuse of grant moneys.
  • Ensure all board members are aware of their responsibilities under the ComLinks by-laws including issues regarding conflicts of interest, code of ethics and fiduciary responsibility for operations.
  • Hire a competent Executive Director and Chief Finance Officer and hold them accountable to high ethical standards.
  • Review conflicts of interests of board members and employees and take appropriate action, including possible termination, to prevent similar acts in the future.

The ComLinks board has either taken corrective action or indicated it will do so.

Click here for a copy of the audit. 

ComLinks is a not-for-profit, Community Action Agency in Franklin County that is primarily funded by New York State (State) and federal grants. According to its website, ComLinks exists to meet the needs of the people in Franklin County... "to give them a decent and affordable place to live, to put food on their tables, and to give them the confidence to know that tomorrow will be a better day…Safety, Warmth, Food, & Dreams…"

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