Greenport village officials were remiss in handling cash receipts at both the Mitchell Park ice rink and McCann Campgrounds on Moore’s Lane during the period from June 1, 2008, to Nov. 9, 2009, according state comptroller Thomas DiNapoli. Mayor David Nyce, who asked for the special audit more than a year ago, released the state report on Monday.
It confirms what some critics have been hinting: The village lacked proper fiscal controls for its recreation department during the period Mr. DiNapoli’s office reviewed and beyond.
The report found that the village had no policy to make sure bids were sought for professional and technical services and that it didn’t use formal RFPs (requests for proposals) when it needed to hire professionals. The lack of bidding could have meant the village paid “more than necessary for services,” according to the report.
Also, there was no policy to require written contracts with all service providers to spell out both the cost and scope of work to be performed.
Among other problems, the comptroller’s office found there was no formal procedure to review bills before they were paid, and there were inadequate safeguards to protect and secure computerized records.
The auditors also found evidence that problems persisted weeks after the time-frame they were reviewing. During one three-week period in January 2010, which the auditors examined for comparison, nearly $1,000 more was collected at the skating rink than was deposited in village accounts.
The audit found no system for the recreation director to count cash from rink admissions in the presence of a cashier and post the daily collection or to reconcile cash with register receipts.
Nor was there any oversight when the director put cash “in her pocket without counting and recording the amount,” the auditors found, and sometimes didn’t bring that money to Village Hall until the following day or, in some cases, several days later.
“The director had significant amounts of village cash in her possession for extended periods of time,” the report says.
“We found that cash received at the village’s ice rink and campground was not safeguarded, deposited timely or properly reconciled because the board did not develop written policies and procedures for controlling and accounting for cash,” the state auditors wrote in the report’s executive summary. The result was that the village had no assurance that it received all cash collected, the auditors found.
Former village recreation director Linda Ortiz, who is now director of Community Action Southold Town, denied any improprieties.
She said she called many times for changing the way cash was handled at the ice rink. She also asked for an overnight bank drop and approval for the use of credit cards instead of cash for admissions, she said.
“I blame management; I told them so many times,” Ms. Ortiz said. She never held receipts for longer than a few days, she said, and that was only because of holiday weekends when Village Hall was closed and she had no authority to deposit funds into village bank accounts.
Because staffing was tight at the ice rink, she said, there could be confusion on busy holiday weekends in comparing receipts with register tapes because large numbers of people sometimes came in at once and some decided not to skate, necessitating refunds that may not have been properly recorded, she said.
“The ice rink was my baby and it was my moment to shine,” she said of efforts to increase its revenues. “My reputation to me is a very big thing,” she said.
Mr. Nyce said he had every confidence in the job Ms. Ortiz did for the village, consistently going above and beyond what her job required.
The auditors found similar problems in the handling of cash at McCann Campgrounds. One practice — bartering with the manager for a free campsite in return for management services — will change, according to the mayor. The barter can still take place, but the value of the barter will have to be given on a 1099 tax form for manager to file with the IRS.
The February 2011 report incorporates a response from the Village Board detailing how it would implement auditors’ recommendations for improving its fiscal procedures. Mayor David Nyce said many of the steps had been taken already and others were in the process of being implemented.
“We were anxious to have the auditors come in,” Mr. Nyce said, explaining that he had needed a review of financial matters to guide him when he took office in April 2007.
Mr. Nyce has said he asked for the audit because he was unsure how finances had been handled by his longtime predecessor Dave Kapell, who served from 1994 to 2007, when he chose not to seek re-election.
During his administration, the mayor has overseen three village treasurers. When longtime treasurer Steven Brautigam resigned in 2008, the Village Board appointed Susan Pisano as a part-time treasurer. Her tenure was marked by complaints from some board members about her handling of the job and complaints from her that the board failed to respond to her requests for more training. Then, in June 2010, the board named former Southampton Town comptroller and Brookhaven finance commissioner Charlene Kagel treasurer.
With that transition, there has been greater emphasis on segregating responsibilities to provide checks and balances in handling both cash and check receipts, deposits and payments, according to Mr. Nyce.
The village has three months in which to report back to the comptroller on its steps to rectify the problems identified in the report.