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Oct 14, 2009 12:50 PMPublication: The Southampton Press

Southampton Town board gets details of forensic audit report, creates audit advisory committee

Oct 14, 2009 12:50 PM

The results of the forensic audit of Southampton Town’s capital fund—which will end up having an impact on the property taxes paid by town residents—were placed in the hands of Town Board members Tuesday afternoon during an executive session.

The details of the audit will not be made public until Friday, but Southampton Town Supervisor Linda Kabot stated that after looking over the audit report, the board decided not to pursue litigation regarding the capital fund deficit. One purpose of the forensic audit was to determine whether or not the comptroller’s office, which handles the town’s bookkeeping, purposely did not complete the millions of dollars of cash transfers that created the deficit. “They’re determining the culpability of individuals,” Ms. Kabot said.

Dan Adams, the attorney for Southampton Town, declined to comment on why the Town Board would not pursue litigation.

The forensic audit, completed by FTI Consulting in Baltimore, also puts an exact figure on the total capital budget deficit, Ms. Kabot said.

During the public portion of Tuesday’s Town Board meeting, Ms. Kabot suggested to Hampton Bays Civic Association President Mary Jean Green that the deficit is around the $20 million mark. When interviewed following the meeting, she declined to give an exact figure.

The deficit was caused by incomplete transfers of money—the balances in the town’s computer system do not match the balances in the general ledger, Ms. Kabot explained.

Ms. Kabot explained that the Town Board discussed the forensic audit report in a closed-door executive session because FTI consulting completed the task under a litigation services engagement. “It is a specialized engagement under the auspices of the town attorney,” Ms. Kabot said. Discussions related to litigation are permitted under the state’s Open Meetings Law.

Meanwhile, the Town Board is still mulling a proposed law that would waive the 5-percent property tax cap so that the town could close the deficit without extensive budget cuts.

Town Councilwoman Nancy Graboski explained on Tuesday that a “Deficit Reduction Plan” line would appear on residents’ tax bills, separate from property taxes, if the town waives the 5-percent limit. Exactly how much each person will need pay to close the deficit, and for how long a period, will be determined once town officials release the exact deficit figure.

The board closed the public hearing on the tax cap proposal, but it will be discussed again as part of the budget hearing on October 27.

Also at Tuesday’s meeting, the Town Board officially created an audit advisory committee, which will assist the Town Board and town comptroller by making recommendations on the coordinating, scheduling, scope, staffing, hiring and implementation of financial audits.

The committee will have five members: two from the Town Board and three others appointed by the Town Board who should have knowledge of accounting and finance. The appointed members will have three-year terms.

The committee will become operational on January 1, 2010, according to the legislation.


lanning and Zoning Boards

Also on Tuesday, Town Councilman Chris Nuzzi withdrew his resolution to reduce the number of members on the Town Zoning Board of Appeals from seven to five after civic leaders and town board members argued that a larger board is better. The number of Planning Board members was also discussed, as were term lengths and limits for each board. Members of the Planning Board and Zoning Board of Appeals can serve a total of two seven-year terms for a total of 14 years.

Most Town Board and civic group members in attendance at Tuesday’s meeting agreed that the term lengths for both the Planning Board and Zoning Board of Appeals should be shortened to either four or five years.

Many in attendance agreed that seven members on each board, instead of five, was also better.

“A few more warm bodies would be more helpful than hurtful,” said Group for the East End President Bob DeLuca, who over the past year has suggested different ways to re-vamp the planning process in the town, such as creating an environmental review committee.

Mr. DeLuca emphasized that the Town Board should also consider having an evaluation procedure for the sitting members of the boards, in order to ensure they are properly performing their duties.

Mr. Nuzzi’s proposals also state that the Town Board “shall make every effort” to place people with backgrounds in law or architecture on the boards, but some Town Board members disagreed with the idea also.

Ms. Kabot and Ms. Graboski said that they did not believe that the planning and zoning boards should become professionalized. Common sense is the most important characteristic for board members to have, they argued.

Town Councilwoman Anna Throne-Holst, however, explained that the language of Mr. Nuzzi’s proposal does not mandate that boards become professionalized, only suggests it. Mr. Nuzzi sided with Ms. Throne-Holst, stating that the law only encourages the Town Board to appoint people with certain qualifications.

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The line item deficit reduction expense(tax) is the way to go. Lets get over it and the town board, department heads need to find an equilibrium between property tax revenue, and staffing and services. Any extra taxes generated by mortgage tax etc, could go to pay down the deficit bond, then be used to build up a reserve fund before money is spent on wish list items. Start running the the town like a break even not for profit.
By North Sea Citizen (568), North Sea on Oct 14, 09 3:04 PM
1 member liked this comment
What this Board should crerate is an inspector general to safeguard the interests of taxpayers.
By JimmyKBond (156), Hampton Bays on Oct 15, 09 3:47 PM
Why are civics so much a part of our governing. We do not elect them. They are a small minority of the people who have the time to show up to the meetings. It is insulting to think that our ELECTED officials cannot think on their own. Why bother having elections at all..
By The Real World (368), southampton on Oct 15, 09 4:18 PM
1 member liked this comment
Linda says that she and the board decided not to pursue litigation... Against whom? herself? What a farce.
By littleplains (305), olde england on Oct 16, 09 5:32 PM
1 member liked this comment
So what happened to making the report public?
By EastEnd68 (888), Westhampton on Oct 17, 09 10:19 AM
Can't do that before the election, it would put feathers on Linda's tar.
By Noah Way (450), Southampton on Oct 19, 09 5:36 PM
Read the article again, the results of the audit will be available Friday. That was this past Friday, October 16.
For those who did not read the article:
The article states that the TB will not pursue litigation against the past comptroller and company.
By golfbuddy (180), hampton bays on Oct 18, 09 5:38 PM
The whole town should be looking towards Richard (the King ) Blowes to take responsibility for the financial fiasco!
By left eq (28), Southampton on Oct 19, 09 4:26 PM
Chris Nuzzi's proposals to reduce the number of members of the appointed boards were blatant political power grabs that rightly failed. The first, to cut the membership of the Planning Board, would have resulted (surprise, surprise!) in the elimination of two members who always represented the public interest rather than developer interests -- Mr. Nuzzi wisely dropped that one from the present offering. His cutting of the Zoning Board of Appeals membership, and his stab at "professionalization" ...more
By Turkey Bridge (1979), Quiogue on Oct 22, 09 1:39 AM