April 26, 2006

Contact: Dr. Ralph Polimeni, Audit Committee Chair
  (516) 463-5685

Independent Audit Committee Finds
Nassau Improved Financial Controls in 2005

 In its second annual report to Nassau County taxpayers, the independent Comptroller’s Audit Advisory Committee said that in 2005 the county continued to identify and resolve internal weaknesses in financial controls and to codify procedures in county departments, many of which previously have been poorly documented.

The seven-member Audit Committee, one of a handful of such voluntary citizens’ committees providing outside financial advice and oversight to counties in New York State, cited the county’s progress in addressing the backlog of property tax refunds but expressed concerns about the financial stability of the Nassau Health Care Corporation (NHCC).

The committee, established by Comptroller Howard S. Weitzman in October 2003, is made up of five county residents with expertise in financial matters and two government officials.  A managing director from the county’s external audit firm, Deloitte & Touche, also attends each meeting.

Committee Chairman Ralph Polimeni, Dean of Business at the Frank G. Zarb School of Business at Hofstra University, said, “In the two years since we established this citizens’ audit committee, we have seen the county make great strides toward improved financial transparency and accountability.  In order to continue this forward momentum, it is essential that the county ensure that departments identify and correct internal control deficiencies.  The administration also must complete its current effort to fully document processes and procedures.  The Audit Committee will continue its oversight and report on the county’s progress.”

Comptroller Weitzman said, “Nassau’s independent Audit Committee, analogous to private sector audit committees required under the federal Sarbanes-Oxley Act, performs an independent financial review that has proven extremely valuable to the county.  The committee provides another level of assurance to the taxpayers—beyond that of the county’s external auditor and the Wall Street rating agencies—that the county is open and above-board in its financial dealings and is doing its utmost to institute financial safeguards to prevent a return to the unsound fiscal practices of the previous decade.

“I thank the committee members for their service to the county.  County Executive Suozzi and I will continue to make sure that the committee has access to the resources it needs to carry on its mission.”

Phoebe Goodman, former executive director to the Nassau Citizens Budget Committee, said, “The Nassau County Comptroller’s Audit Committee is an innovation that has helped restore faith in local government.  I am impressed with the caliber of people who are donating their time and all Nassau residents should be grateful for their service.”

In 2005, the Committee met with County Compliance Officer and Deputy County Executive Helena Williams and established a subcommittee charged with reviewing the county’s efforts, led by Ms. Williams, to improve financial controls throughout the government.  Among areas of continuing concern, the Committee notes that county departments need to strengthen review and approval procedures for vendor claims processing.  It supports a county proposal to establish a training program “to educate department heads and their designees on proper claim review and approval procedures.”

Throughout 2005, the Committee met frequently with representatives of the Suozzi administration, as well as with a consultant that is helping the county to assess internal control “gaps” and evaluate its multi-year plan to eliminate them.  The Committee also:

• commended the administration’s progress in reducing the county’s backlog of property tax refund liability.  Last month, the Comptroller announced that the backlog had been reduced to $130 million, a 20-year low, and that the county had met its financial goal of no longer needing to borrow funds to make such refunds;
  
  
• met with staff from the New York State Comptroller’s Office to discuss sales tax collection and distribution policies;
  
  
• cited county efforts to review grant control issues, improve grant reconciliation and compile an instructional manual for departments; and
  
  
• noted the county’s progress in developing policies for meal and travel allowances, time and leave, petty cash management and vehicle leasing.
  

The Committee remains concerned about the fiscal instability of the Nassau Health Care Corporation.  In January 2006, Committee members met with NHCC officials to discuss the hospital corporation’s staffing, attrition, projected loss for 2005, and overall financial structural imbalance.  Although hospital revenues increase an average of 1 percent each year, expenses increase by 3-4 percent over the same period, the report notes.  The Committee pledged to continue to monitor NHCC and its possible impact on the county’s financial health. 

In 2005, the members of the Audit Committee were:

Ralph Polimeni, (Committee Chairman) Dean of the Frank G. Zarb School of Business at Hofstra University; H. Richard Grafer, Managing Member of Pathway Investments, LLC; Edward S. Scott, Deputy General Counsel and Vice President of Development and Acquisitions for UrbanAmerica, LP; Terence Smolev, (Committee Vice Chairman), Partner, Forchelli, Curto, Schwartz, Mineo, Carlino & Cohen LLP; Robert A. Wild, Chairman and Managing Partner, Garfunkel, Wild & Travis, P.C.; Martha Herrera-Wong, Chief Deputy Director for Revenue Management; and Manuel Mosquera, Deputy County Comptroller for Audits and Special Projects.  There is currently one vacancy on the committee.

The Audit Committee’s 2005 annual report

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- The Audit Committee’s 2005 annual report