Nassau County has reduced spending on contracts for minority- and women-owned businesses over the past three years, despite increased spending overall on contracts for public projects, according to a report by the legislative budget office.

The declining numbers could put the county at risk of losing federal and state funding for projects that require local governments to hire a set percentage of minority- and women-owned companies, the report said.

In an April 24 report, Maurice Chalmers, director of the Office of Legislative Budget Review, said the "greatest concern is whether or not the county is in danger of losing out on federal or state funding due to noncompliance."

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In 2012, Nassau spent $466 million on outside contracts, with $53 million, or 11 percent, going to minority- and women-owned businesses, the OLBR report said. In 2014, the county spent $503 million for contracts, but only $47 million, or 9 percent, went to minority- and women-owned businesses.

New York State directs about 20 percent to 25 percent of its contractual spending to minority- and women-owned business, according to the report.

In a March 11 letter to the administration of Nassau County Executive Edward Mangano, county Comptroller George Maragos called for "an improved tracking mechanism" to ensure compliance with state and federal requirements that Nassau hire a certain percentage of minority and women contractors to remain eligible for public funding. Percentage mandates can vary by contract.

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"We certainly want these businesses to participate fully," Maragos said in an interview. He said he plans to establish an advisory committee of minority business leaders to distribute information on upcoming county contracts up for bid.

Nassau County Attorney Carnell Foskey, in an April 3 response to Maragos, said the county has hired the labor law firm of Jackson Lewis of Melville to "clarify the data and improve the county's . . . compliance."

Foskey said officials in the county's Office of Minority Affairs, charged with verifying information from contractors seeking certification as minority- or women-owned enterprises, believe "that when all the information is compiled and reviewed, it may be that the county has been underreporting the county's use" of such businesses as contractors and subcontractors.

The findings by Chalmers come as the county's contracting process is under scrutiny following the arrests earlier this month of state Sen. Dean Skelos (R-Rockville Centre) and his son, Adam, on federal conspiracy, extortion and bribery charges.

Prosecutors say the senator pressured a real estate developer to pay Adam Skelos $200,000 through companies including Arizona-based AbTech Industries and influenced the awarding of a $12 million county storm-water treatment contract to the firm. Dean and Adam Skelos say they are innocent.

Chalmers' report has prompted legislative Democrats and community activists to call on Mangano to increase the number of minority and women contractors used for projects, including superstorm Sandy recovery work.

Democrats have asked Mangano to hire a consultant to ensure that public works department contractors meet standards for hiring minorities and women.

"Our county is becoming more diverse -- we want to make sure that everyone is getting a fair shot," said Legis. Laura Curran (D-Baldwin).

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Chalmers' review also highlighted several "deficiencies" at the minority affairs office. The report said the agency has not conducted a "disparity study" to assess whether Nassau has "appropriately" used minority and women owned firms since 2004.

The review said it appeared that the agency "could be doing more to meet its basic mission."

The report said the minority affairs office has no full-time executive director as required by the county charter. The agency is headed by Deputy County Executive for Health and Human Services Phillip Eliott, who holds dual roles as a "cost-saving" measure.