June 03, 2011
DiNapoli Announces Audit Of Jefferson County Industrial Development Agency
Questions Center on Employees' Retirement Membership
State Comptroller Thomas P. DiNapoli announced his office will audit the Jefferson County Industrial Development Agency (JCIDA), in response to information he received that individuals have been registered with the New York State and Local Retirement System (NYSLRS) as employees of the JCIDA when they actually worked for local development corporations (LDCs). Employees of LDCs are not eligible for membership in NYSLRS.
"The Jefferson County IDA doesn't have the authority to assign staff to work at LDCs and enroll them in the retirement system," DiNapoli said. "Retirement benefits should only go to those entitled to them under the law. Our audit will make sure of that. I can't allow the integrity of the Retirement System to be compromised by any person or entity looking to skirt the law."
In a letter to JCIDA CEO Donald C. Alexander, Executive Deputy Comptroller Kevin F. Murray wrote that under OSC Opinion 2011-1, IDAs do not have the authority to hire individuals to staff LDCs or assign IDA employees to serve as the staff of another entity.
"Not-for-profit local development corporations and their employees are not eligible for membership in NYSLRS," Murray wrote Alexander. "As private corporations, they do not satisfy the requirements to participate in NYSLRS as either a municipality or a public or quasi-public organizations."
DiNapoli's review of the JCIDA will include examinations of employment records and interviews with officials and staff members. Click here for a copy of Murray's letter to Alexander. For a copy of OSC Opinion 2011-1, click here: http://osc.state.ny.us/legal/2010/op2011-1.htm.
DiNapoli is committed to rooting out waste, fraud and abuse in NYSLRS. He recently introduced legislation that would give his office the tools it needs to find those receiving improper pension payments at the local government level. He has also introduced legislation that would strip public officials of their pensions if they commit a felony in the performance of their public duties.
DiNapoli has proposed a series of reforms of LDCs, citing an on-going pattern of abuse. These proposals would limit local governments' use of LDCs and other private entities such as limited liability companies (LLCs). The proposed reforms would give the State Comptroller direct audit authority over LDCs and similar entities controlled by local governments. A copy of DiNapoli's report on LDCs can be found here: http://www.osc.state.ny.us/localgov/pubs/research/ldcreport.pdf