North Hempstead did not have a comptroller in office for 12 of the 20 months that a secretary allegedly embezzled more than $98,000 in cash fees from the town’s Solid Waste Management Authority.
Employees of the comptroller’s office uncovered the alleged embezzlement in mid-January, four months after a permanent comptroller started working for the town. Nassau prosecutors on Monday said secretary Helen McCann — who was responsible for receiving the money, depositing it into a bank account, and sending deposit slips to the town — took the cash between May 11, 2014, and Jan. 11. The town was without a comptroller from Aug. 31, 2014, through Sept. 11, 2015.
Prosecutors said McCann deposited less than the amount of cash reported by employees collecting yard waste drop-off fees on Sundays and that she often did not make any bank deposits. The comptroller’s office alerted town officials about a “significant decrease in revenue” and the Nassau District Attorney’s office opened an investigation on Jan. 21.
A full-time comptroller generally is responsible for “the procedures and internal controls, and making sure internal controls are followed,” said Dan Amiram, Professor of Accounting and Taxation at Columbia Business School in Manhattan. “Someone needs to make sure those deposits were indeed deposited.”
After Kathleen Mitterway resigned as town comptroller in August 2014, the board hired former Democratic Nassau County Comptroller Howard Weitzman as a financial consultant to assist the town under a contract not to exceed $20,000 His contract, which had him working for the town part time, expires Nov. 30, 2016.
Town officials said the comptroller’s department had reported to Director of Finance and Deputy Supervisor Aline Khatchadourian.
The town hired Inna Reznik, of Bellmore, in October 2014, but she withdrew from the position a month later. The position stayed vacant until the town hired Averil Smith, of Elmont, in August with a $135,000 salary.
“We functioned for a very long time without a comptroller,” said Dina De Giorgio, a Republican town councilwoman. The board’s five other council members could not be reached for comment. “It’s disconcerting . . . what else happened during those 18 months that we didn’t see?”
Weitzman said in an interview that the town would review its procedures in the wake of McCann’s arrest on Monday “Prudence would dictate that any time you have an event like this, you would review your internal procedures and that’s what the town is doing right now,” he said. Blair Horner, executive director of the New York Public Interest Research Group in Albany, said “the fact that there was no comptroller for a substantial portion of time that this alleged theft occurred, underscores the importance of having financial oversight. The whole point of having financial oversight entities is to protect taxpayer dollars and to make people think twice about stealing.”
Town spokeswoman Carole Trottere said in a statement that “if a dishonest employee is intent on stealing cash, they are going to do it. But the question is, ‘Did we have the controls in place to catch them?’ and we did and reported it immediately to the DA.”
Good government and financial experts criticized the town’s cash-only requirement at the drop-off site.
Payment policies vary across municipal waste sites. Oyster Bay doesn’t charge for yard waste. Hempstead is the only other Nassau town that accepts cash payments.
“It would have been better if they collected it by credit card,” Alex Dontoh, Director of the Master of Science in Accounting program at NYU’s Stern School of Business, said. “That would have added another layer of protection.”
Dontoh said McCann should not have been responsible for collecting the money, depositing it, and sending memos to the town comptroller’s office.
“The problem with the system was that there was one person who had two roles — one role was depositing the cash in the bank and the other role was passing on the information about the revenues that were collected the previous Sunday onto the comptroller’s office,” Dontoh said. “Those roles should have been separated.”
Edward Lieberman, a lawyer for McCann, said at her arraignment Monday that the charges were a “complete fabrication” and her termination was the result of “issues” between her and her immediate supervisors.
Town comptroller duties:
Manages the daily operations of the comptroller’s office, including managing the staff, financial transactions, and long-term financial management and reporting.
Oversight functions include cash management for the town and its special discricts, claims processing and payroll, the town budget, annual audtis, the accounting and control of capital accounts.
Source: Town of North Hempstead job posting