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November 16, 2012

 

DiNapoli: Improvements Needed At Saratoga Housing Authority


Auditors found lax spending controls at the Saratoga Housing Authority (SHA), according to an audit released today by State Comptroller Thomas P. DiNapoli.

"Taxpayers and tenants of the Housing Authority shouldn't have to question if their money is being used appropriately," said DiNapoli. "Officials should immediately address the financial risks uncovered in this audit and commit to improving the tone at the top as they move forward."

After public allegations were made surrounding potential financial irregularities and spending practices on salaries, travel and business expenses, DiNapoli's office was asked by the mayor of Saratoga Springs to conduct an audit.

Auditors found the SHA board did not compensate its executive director - whose 2011-12 salary was $144,921 - in accordance with its personnel policy. By comparison, the salaries of housing authority directors in Plattsburgh, Troy, Schenectady and Albany ranged from $96,000 to $139,000.

Further, the authority lacked appropriate internal controls for conference attendance and the process of approving travel claims prior to payment. These lax controls resulted in the payment of nearly $12,000 in questionable travel costs on out-of-state trips.

DiNapoli's report also noted the authority failed to assess the extent of a widespread bed bug infestation in one of its apartment complexes. Auditors found the authority was alerted to the bed bug problem at Stonequist Apartments in September 2011, but did not engage the services of a professional exterminator until February 2012.

Additional audit findings include:

  • Insufficient control over payroll increased the chance that errors or irregularities could occur and not be detected and corrected in a timely manner.
  • SHA violated its ethics policy when using a business owned by the executive director's brother to service its vehicles.
  • The executive director was given a five-year contract with an annual automatic, one-year extension which becomes effective unless the SHA board gives the director timely notice that the agreement is terminated. Under this arrangement, if the director fails to perform his duties satisfactorily, the board is only permitted to terminate the one-year extension of his contract. The authority will still be obligated to pay the remainder of his salary, approximately $580,000.

DiNapoli made a number of recommendations in the audit, including:

  • Align the executive director's salary with industry comparables and federal requirements;
  • Obtain reimbursement from authority officials and employees for any questionable travel costs identified in this report;
  • Cease approving contract language that prohibits the board from dismissing an unsatisfactory employee without incurring a substantial financial burden or that establishes default mechanisms that result in automatic contract extensions or salary increases;
  • Audit and approve all claims prior to payment and ensure that every claim is sufficiently itemized and contains necessary supporting documentation to ensure that it is a proper authority charge and that the goods and/or services have been received;
  • Enforce the SHA ethics policy and discontinue utilizing J&M Auto Repair Service; and
  • Adequately segregate payroll processing duties.

Authority officials generally agreed with DiNapoli's recommendations and indicated they planned to take corrective action. Their response has been included in the final audit report.

For a full copy of the report visit: http://www.osc.state.ny.us/localgov/audits/publicauth/2012/saratogaspringshousing.pdf

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