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Comptroller says Nassau Legal Aid spent funds without authorization

The Legal Aid Society of Nassau County spent more than $400,000 without proper authorization and inappropriately used nearly $230,000 from its petty cash bank account, according to an audit released Wednesday by Nassau Comptroller George Maragos.

The Legal Aid Society, a nonprofit Hempstead-based agency that represents criminal defendants who cannot afford attorneys, receives more than $6 million in funding annually from the county and state grants to cover salaries and operating expenses.

The agency has a five-year contract with Nassau that runs through 2019. In 2016, Legal Aid received $6.5 million from the county and the state.

The audit, which covered the period from Jan. 1, 2012, through Dec. 31, 2015, found that no public funds were misspent. But Maragos, a Democrat running for county executive, said auditors discovered that Legal Aid had inadequate financial controls to guard against potential fraud.

Auditors found that over the four-year period, Legal Aid employees made 20 disbursements, totaling $444,305, without receiving approval by a manager.

The agency’s petty cash bank account, which was supposed to be capped at $500 and used to obtain time-sensitive documents such as birth certificates, also was misused, auditors said. Investigators said $227,662 from the account was used for operating expenses such as computer software, insurance and office parties.

Maragos said Legal Aid “accepted our findings and recommendations and agreed to institute changes in their financial management to address the fiscal and operational concerns raised in the audit report.”

N. Scott Banks, who became Legal Aid’s attorney-in-chief last year, said the agency has made changes to its bookkeeping and accounting practices.

“Every bill and expenditure is documented with Nassau County,” Banks said.

Auditors also said that although Legal Aid, as a nonprofit, is required to return any unused county funds, the agency failed to remit a total of $38,296 in health insurance rebates and refunds for polygraph tests, legislative awards and short-term disability to the county. The agency used the funds for operating expenses, auditors said.

Banks said the procedures to track rebate and refund receipts have been improved and Legal Aid is working with the county to determine how much money needs to be returned.

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