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Jul 21, 2010 11:00 AMPublication: The Southampton Press

More accounting mistakes discovered in Southampton Town; audit to be released

Jul 21, 2010 11:00 AM

After months of untangling the snarls created by past accounting practices, Southampton Town’s 2009 financial audit will be completed next week, and drafts of the document are expected to be presented to the Town Board at the July 29 work session.

But even after deleting nearly $3 million from the town’s fund reserve to fill holes in the financing of dozens of town projects that were not funded properly between 2003 and 2007, Southampton Town Comptroller Tamara Wright said the audit will still show a $670,000 deficit. That’s because her office last week discovered yet another layer of accounting mistakes while examining the special accounts set up to accept fees and other revenue from developers seeking zone changes and building subdivisions.

Nonetheless, the comptroller said town officials expect to complete the 2009 year with a substantial general fund balance, in the neighborhood of $10 million—though some $7 million of that is encumbered for paying debts and guarding against unexpected tax hikes.

Ms. Wright said this week that the newly discovered deficits—money owed to the capital fund account that was used to pay for major construction projects—might be able to be zeroed out once the latest accounting mess is straightened out by using money from the planned development districts and park fees that were initially intended to pay for the work done.

“At the moment, we’re not sure there is really a problem,” the comptroller said on Tuesday. “There’s no reason to believe anything has been used inappropriately in the past. It’s just that when we started looking at the park reserve fund, we realized it was much more complicated than we expected.”

The money in question is largely fees and other revenue collected from developers as part of the approval process of subdivisions or planned development districts, which are special zoning exemptions granted by the Town Board for projects that carry a significant public benefit. The public benefit in some cases can include large financial contributions for land preservation or public projects. Some of the specially dedicated money from PDD projects was kept in separate accounts, but most other contributions were mingled, in a single “park reserve fund,” with money collected from developers specifically for the creation or improvement of parks throughout the town.

Which money was spent on which projects has left a very opaque picture that Ms. Wright’s office is still trying to clear up.

“This is going to require yet another chapter of forensic work, in terms of getting to the bottom of how they were used,” Town Supervisor Anna Throne-Holst said of the PDD and parks fee money at a board work session on July 15.

Over the last seven years, the town has spent about $1.2 million of park reserve funds on park projects, including the Bridgehampton Community Park and Damascus Park in East Quogue, Ms. Wright explained this week. But as with many of the capital projects during the same period, the comptroller’s office has recently discovered, the necessary money was never transferred from the parks fund to the capital projects account, from which the checks for the work ultimately were cut, despite explicit approvals by the Town Board.

“It’s very hard to understand,” she said. “Many of these resolutions were written by the [former] comptroller and directed to the movement of the money, so it’s not like the comptroller didn’t know about it. But for the most part, it was never transferred.”

Over the last year, the comptroller’s office discovered that between 2003 and 2007, millions of dollars of capital projects had been completed and paid for, despite the fact that the money to cover the expenses was never borrowed or transferred from other town accounts. At the same time, millions more were borrowed for projects that were never done.

At times during the recent investigations, Ms. Wright feared that the town could be facing as much as $10 million in deficits or more. After more than a year of poring over town financial records, she determined that only about $1.2 million was needed to balance the capital fund’s neglected books, and another $1.7 million to square the books of a separate fund pared off from the town’s main account for the operation of town beaches—also the product of accounting practices that lost track of cash flow and bills, and resulted in some $900,000 effectively being spent twice.

Unlike with the other deficits in the capital account, Ms. Wright says there is ample money in the parks funds accounts to cover the $670,000 shortfall, if she can determine that the money in the fund was intended for the uses it was spent on.

The discovery of the new accounting errors came in the wake of a Town Board resolution to spend some $500,000 in money donated to the town by the developer of Sebonack Golf Club in Tuckahoe to fill yet another accounting gap, for the purchase of a parcel of land targeted for affordable housing development.

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Is there no end to the mistakes of the past comptroller?
By eagleeye (49), Sag Harbor on Jul 21, 10 3:43 PM
GOOD JOB, TAMARA!!
By SagHarborBob (91), Sag Harbor on Jul 21, 10 7:05 PM
If all of the "mistakes" are to the minus side, are they really "mistakes?"
By StopCorruption (19), Southampton on Jul 21, 10 9:09 PM
When auditing, and reconciling, yes they are "mistakes".
By Mr. Z (10157), North Sea on Jul 21, 10 10:43 PM
No surprises here. The real surprise will be when they stop finding "mistakes".

Thanks Skip (and Linda).
By Noah Way (450), Southampton on Jul 23, 10 12:06 AM
1 member liked this comment
When is all this going to stop?
the east end is the joke of Suffolk
By oldguy (60), hamptons on Jul 23, 10 12:19 PM
where have you been sjd?
By Terry (380), Southampton on Jul 26, 10 6:39 PM
Linda is gone, but her legacy lives on.
By progressnow (556), sag harbor on Jul 24, 10 3:55 PM
Seems like it never ends. The damage inflicted by this cozy-comfy-chummy-careless crowd, that the people unwisely elected time after time, just goes on and on. In this case it was the Republicans (and still is, going by the Town Board majority), but it could be any party that stays in power too long. The lesson is, don't let one group become entrenched.
By Turkey Bridge (1829), Quiogue on Jul 25, 10 10:48 PM

Town financial irregularities by the millions by political officials will go on forever unless they judges start sending them to jail, period! Southampton, Easthampton, it's all over.

Give them 15 years in the caboose to serve as a warning to future officials and you'll see this sort of pervasive corruption minimized. As it is, it's open season on the taxpayers without much peanalties!

And to Kabot haters, these irregularities occurred in 2002- 2007, and were exposed in Kabot's ...more
By Obbservant (440), southampton on Jul 26, 10 12:09 AM
Let me think who were the other board member's during 2003- 2007
A special thanks to Dennis Suskind, Steve Kenny & Carolyn Zenk.
The democrats held the majority for some of these years, I guess they were sleeping in the board room.
By reg rep (408), Southampton on Jul 26, 10 1:08 AM
Once again, reg rep, you make this charge, and once again, I point out that: [1] As a matter of legal responsibility, the Supervisor (all Republicans in the period we're discussing) is the chief financial officer of the town and ultimately accountable for its money. [2] As a matter of practical experience, the Supervisor and the people who work for him or her have a host of ways they can conceal financial irregularities from the Town Board.
By Turkey Bridge (1829), Quiogue on Jul 26, 10 12:16 PM
Turkey
This is what you stated above:
In this case it was the Republicans (and still is, going by the Town Board majority), but it could be any party that stays in power too long. The lesson is, don't let one group become entrenched.

Republicans?? Do you mean just one republican supervisor during those years? What TB majority? The TB democrat majority during the years this deficit happened?
These accounting errors were found during the republican majority and corrections were ...more
By reg rep (408), Southampton on Jul 26, 10 7:34 PM
My comments are clear and need no further explanation, reg rep. Your alleged requests for clarification are merely attempts to confuse the issue. If you need any more help, I'll refer you to what Obbservant posted at 1:54 AM on 7/27. I'll also say that, while Skip Heaney may have been primarily responsible for this disaster, it grew out of the culture of cronyism and incompetence that festered under Republican Supervisors Cannuscio and Lang and others, going back over the long, sorry history ...more
By Turkey Bridge (1829), Quiogue on Jul 27, 10 2:49 PM
Reg Rep: In my post, I was discussing a non partisan judicial policy applicable to all incompetent or corrupt officials of any party for the community's good if you look closely. Immediately, you launch into a defensive tirade because you know Republican all the shenanigans happened during Skip Heaney's time as Supervisor and official Town CFO, who is legally responsible for the Town's Financial Accounting and Financial Management which is at the heart of these accounting and reporting disasters!

I ...more
By Obbservant (440), southampton on Jul 27, 10 1:54 AM
Obbservant if you would read my blog closely I was not responding to you at all. I was addressing Turkey Bridge, with his usual Republican comments.
So who's being defensive and on a tirade?
By reg rep (408), Southampton on Jul 28, 10 12:35 AM
The whole thing boils down to "Monkey see, monkey do, monkey have, monkey want."

The "idiots" in power see the wealth, influence, and nice things the "Smiths and Jones families" who have interloped our community have. They want these nice things, and to hob-nob with "big-wig" people too. They'll do what they have to do, to gain enough power, and influence, to be "important". They go in under the guise of being elected by the community, but do nothing except cater to the "wealthy" who ...more
By Mr. Z (10157), North Sea on Jul 27, 10 1:57 PM

Well said.
By Obbservant (440), southampton on Jul 28, 10 7:16 AM
A screwup is a screwup, and whoever's responsible oughta face the music, even if they're out of office. This is my money and yours we're talking about!
By clam pie (161), Westhampton on Jul 29, 10 6:48 PM
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