Oceanside sanitation district hit with audit

Oceanside Sanitation District No. 7 will be subjected to a county audit after what Nassau Comptroller Jack Schnirman called “a history of fiscal mismanagement.”

“The objective of the audit is to determine whether there’s adequate safeguards in place to protect the district’s assets and that it’s being cost effective,” Schnirman said. “We’re not going to be shy in our inquiry about looking at the performance of the district.”

Schnirman said the audit could take six to nine months, and that auditors would examine the district’s financial records from January 2018 to the present, and would go further back if necessary. He added that the audit comes after several complaints to the comptroller’s office’s “Report It, Reform It” tip line. He said the callers remain anonymous, but their complaints led to the investigation.

Austin Graff, chairman of the district’s board of commissioners, said he was among those who asked for the probe, noting that past administrations overtaxed residents, leading to the current board having a $5 million surplus to work with on top of its annual $9 million budget. Graff was first elected to the board in June 2018.

“This is not our money,” Graff said. “This is the taxpayers’ money. The taxpayers should have confidence that it’s being spent appropriately, prudently and in their best interest.”

Graff called the audit a “positive development,” and said that he and the board would comply with it and implement any recommended changes. “We anticipate that our books are clean,” he said, “and we’re appropriately spending the taxpayers’ money in their best interest.”

Schnirman said his office has wanted to conduct an audit for a number of years, but had to wait for a legal battle to end. In 2017, when Anthony Santino was Town of Hempstead supervisor and George Maragos was the county comptroller, they entered into litigation over whether the comptroller’s office had the right to conduct audits of special districts within the town. When Schnirman took office, the lawsuit continued, and in January, the New York State Appellate Division ruled in favor of the comptroller’s office. The town appealed the decision, but the State Court of Appeals upheld it in early November, enabling the comptroller’s office to probe the Oceanside sanitation district.

The audit will examine administrative practices, the district’s fund balance, its cash receipts and disbursements, and the cost of operations, as well as probe possible nepotism, ethics and transparency issues, and conflicts of interest. There will also be follow-ups in the months after the audit to ensure that comptroller’s office recommendations are adhered to.

“The audit team will conduct a thorough review of the finance and operations of the district,” Schnirman said. “Ultimately, we’ll follow the facts; we’ll follow the money and find savings for taxpayers any way that we can.”

This is not the first time the sanitation district has faced an audit. In 2009, an audit by State Comptroller Thomas DiNapoli found that former district supervisors Michael and Charles Scarlata collected more than $800,000 in illegal deferred retirement payments from the district from 1998 to 2013. In March 2019, the district reached a settlement with the Scarlatas, in which they agreed to pay $300,000 back to the district.

The comptroller’s probe comes amid controversy surrounding the district, including the lone female employee suing the board for alleged sexual harassment and two longtime employees suing the commissioners for wrongful termination for what they have described as retaliation for sticking up for the female employee. Commissioner Ryan Hemsley also recently came under fire after he allegedly made racist, homophobic and anti-Semitic Facebook posts in years past, which were recently unearthed. He has denied the claims and has refused to resign.

While Schnirman described the district as a “lightning rod of controversy,” he said none of the issues led to the audit, including Hemsley’s alleged posts, which have drawn the ire of elected officials and members of the Jewish community, who have called for his resignation. He added, however, that the posts were “deeply disturbing,” and that if the audit were to uncover that service was impacted because of racial or any other biases, his office would “take it seriously and bring it forward.”

Graff said he was pleased that the Court of Appeals ruled in favor of the comptroller’s office so that the audit can take place.

“They are prepared now to undertake an audit of the district’s books and records,” he said. “I said come on in. There’s nothing to hide.”