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March 12, 2010

Niagara County Treasurer Under-Valued Estates
and Gave Business to Friends and Family

Former Niagara County Treasurer David Broderick did not take adequate steps to safeguard decedents’ assets when he administered estates for people who had no one qualified, willing or able to administer their estate. He apparently sold assets at prices below their value, contracted with attorneys, real estate agents and appraisers without seeking competition, and had his county-salaried secretary spend a significant amount of county time performing estate-related work, according to an audit released by State Comptroller Thomas P. DiNapoli.

DiNapoli has referred his report to the Niagara County District Attorney’s office for review to determine if any laws or statutes were violated. The audit covered the period January 2004 to October 2009. Former County Treasurer David Broderick has served as public administrator of estates since he began as treasurer more than 30 years ago.

“There is an expectation, rightfully so, that public servants will act in the public’s best interest, DiNapoli said. "That’s not what happened in Niagara County. The county treasurer did not take adequate steps to properly value and protect the assets contained in people’s estates. Taxpayers need to know that decisions are being made in the best interests of the public, not to benefit friends and family of the administrators.”

DiNapoli’s auditors reviewed Broderick’s processes for the identification, documentation, collection, safeguarding and liquidation of estate assets, cash management, recordkeeping, and the selection of service providers for 15 estates with gross assets totaling approximately $1.8 million. For administering these estates, the treasurer will receive commissions totaling approximately $73,000.

DiNapoli’s auditors found the county treasurer:

  • Sold three vehicles to a county sheriff’s deputy for a total of $2,000. One of them was a 1970 Chevrolet Monte Carlo which may have had substantial value to a classic car collector and/or enthusiast, as auditors found seven listings for 1970 Monte Carlos with asking prices ranging from as low as $9,850 to as high as $38,000;
  • For one estate, valued at more than $450,000, which included a house and a significant amount of cash, Broderick sold the contents of the house for $270;
  • Did not use a competitive selection process for individuals he retained to perform certain duties, such as attorneys, real estate agents and appraisers; family and acquaintances benefited from estate activities;
  • Used his secretary to do estate administration work on county time;
  • Did not ensure that assets were adequately identified, collected, safeguarded, appraised, liquidated and properly credited to the estate; and
  • Did not control the identification, collection, and sale of assets found during searches of decedents’ premises.

DiNapoli recommended that the county treasurer:

  • Prepare a detailed inventory of all significant personal property identified during the initial search in and around a decedent’s residence;
  • Maintain a record documenting all visits by him and others to the decedent’s residence and the purpose for such visits;
  • Have an independent witness accompany him during his initial search of a decedent’s residence. This individual should either prepare the inventory or sign the listing attesting to its completeness and accuracy;
  • Photograph and/or video all significant personal and real property for identification purposes and to document the condition of each asset;
  • Have the value of the assets appraised;
  • Solicit multiple offers for estate assets through public advertisement, auction, or other means to encourage competition and maintain a record of all offers received;
  • Maintain documentation for the propriety, reasonableness, and accuracy of all estate-related expenses;
  • Advertise for service providers for estates. A documented and objective process should be implemented for evaluating the responses, which at a minimum, requires the treasurer to formally document the rationale for selection; and
  • Require all attorneys he retains to provide billing statements detailing the specific services that were rendered, the manner in which the fee was computed and the estate for which legal counsel was provided.

Although an attorney for Broderick indicated his client disagreed with the findings of DiNapoli’s audit, auditors discussed the findings and recommendations with the Surrogate’s Court judges. The judges generally agreed with DiNapoli and have already implemented new procedures that address the findings.

Click here for a copy of the report.


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