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After two-year inquiry, Southold may suspend Justice Court audit

03/04/2016 4:00 PM |

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Nearly two years after initiating an audit of Southold Town’s Justice Court, the Town Board may pull the plug on it.

Supervisor Scott Russell said in an interview last week that he’ll ask fellow board members to consider suspending an outside auditing firm’s inquiry into court finances, which was ordered after a former clerk’s arrest for stealing more than $230,000 from the town bail fund. Mr. Russell said he believes the process has dragged on for too long and he wants the auditors to turn over their findings.

“The financials of the department were a mess,” Mr. Russell said. “There were so many issues — from software problems to stale accounts with old checks in them and handwritten notes. And it all spans a number of years. I’m not sure they’ll ever be done and the time is coming for the Town Board to say, ‘Give us what you got and we’ll call it a day.’ ”

The Town Board authorized $36,000 in March 2014 to hire the accounting firm Albrecht, Viggiano, Zureck & Company to conduct the audit, just weeks after news leaked that court clerk Christine Stulsky was being investigated. Ms. Stulsky, who pleaded guilty to felony grand larceny and has since served time in jail, has already paid more than $110,000 in restitution to the town.

AVZ has not yet released details of its more intensive multi-year audit of the Justice Court, but in January it did unveil its standard annual audit of the court for 2014 — the year in which Ms. Stulsky was arrested — which included a disclaimer saying the auditors were unable to express an opinion on the bail account.

“Management has not maintained adequate internal controls relating to the collection and disbursement of bail proceeds and as a result we were unable to audit the collection, disbursement and ending balance of the activity in the bail account,” the audit reads.

In an interview last Wednesday, Mr. Russell, Town Justice William Price and Justice Court director Leanne Reilly said the auditors have continued to work on the multi-year audit with court staff, but the process has been arduous.

Mr. Price said thousands of files have been reviewed and Ms. Reilly — who was hired in the wake of the theft — added that each file contains multiple procedures. She said her staff has worked with AVZ in an attempt to ascertain where the bail money in each file ended up.

“We have to determine was the bail forfeited, was it returned?” she said. “There’s a lot of work to do on every file. I don’t really know how the auditors can make a determination on it.”

Mr. Price said town officials have learned since Ms. Stulsky’s arrest that although past audits reviewed Justice Court systems, auditors did not thoroughly examine its bail accounts, which he and former colleague Judge Rudolph Bruer — who opted not to seek re-election after 20 years on the bench — had believed was being done.

Mr. Russell added that because Ms. Stulsky, a senior clerk, managed the office for many years, she controlled a process that allowed her to handle bail money herself, making it easier for her to cover up the thefts.

“She ran a ship that manipulated the process,” he said. “She manipulated the workers that worked there and she lied to the judges.”

In December, the New York State Commission on Judicial Conduct dismissed a complaint alleging, based on news articles, that Mr. Price had failed to properly monitor Ms. Stulsky. The dismissal notes that he and Fishers Island Justice Louisa Evans responded to the news of Ms. Stulsky’s arrest by “reviewing existing protocols and implementing improved administrative and financial procedures to protect against such misappropriations occurring or going undetected in the future.”

Among their reforms was the December 2014 hiring of Ms. Reilly to run the Justice Court. She has since implemented a system that involves all staff members in the handling of monies received.

Mr. Russell said the town is pleased with the work the Justice Court staff has done to improve its office functions and the time has come to “move forward.”

The supervisor said he has not received additional invoices from AVZ for its ongoing audit, but he suspects the town may owe more than the original $36,000 it agreed to pay. If the Town Board agrees the time has come, he said, he’ll direct AVZ to close the audit and present its incomplete findings. The firm has told the supervisor it can prepare a draft for the March 22 meeting.

“If the mess hasn’t been unraveled yet and they’re still trying to balance out all of the books, I know myself and some of the other board members feel at this point that if we can’t figure it out, we can’t figure it out,” he said. “Let’s put an end to this.”

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