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Audit finds $179,000 in 'questionable' spending by AIDS agency head

Gail Barouh, chief executive of the nonprofit Long

Gail Barouh, chief executive of the nonprofit Long Island Association for AIDS Care, used state funding for personal expenses, according to a a State Comptroller's audit.

A state comptroller's audit has uncovered $179,000 in "inappropriate or questionable" spending by the head of a taxpayer-funded Long Island HIV and AIDS center who allegedly altered financial records to disguise personal expenses.

Gail Barouh, chief executive of the nonprofit Long Island Association for AIDS Care, used state funding for personal expenses including $4,400 for gasoline and $4,700 for "seafood and meat" and other miscellaneous purchases from a local grocery store, according to a 14-page report by State Comptroller Thomas P. DiNapoli.

The audit examined the group's contract with the state Health Department from July 2011 through July 2012.

In a statement, LIAAC officials said the audit identified "some administrative and managerial deficiencies," and that the nonprofit had begun "corrective action," including hiring an accounting firm with experience with nonprofits.

"With this issue behind us, LIAAC looks forward to continuing our mission of keeping Long Islanders healthy, educated and safe," agency spokesman Arthur Malkin said in a statement.

Bernard J. McHugh, director of state expenditures for the comptroller's office, wrote in the audit that a review of the organization's financial records found "the CEO failed to demonstrate the expenses were business related or the evidence provided supports some of the expenses were personal."

The report, released in September, says Barouh "manipulated" and "redacted" her monthly fuel credit card statements to omit transactions that showed she used the card for personal trips. Malkin did not respond to a request Monday to speak with Barouh.

The report noted that auditors had to request receipts and financial documents five times before they were provided.

"We subsequently obtained these statements directly from the fuel vendor and found out-of-state fuel card transactions on days that coincided with days the CEO took personal time," the report states.

The agency, which is based in Hauppauge, provides HIV testing and support groups for infected patients. It is under state contract, and the Health Department intends to recover the money in question, according to an Aug. 7 letter to DiNapoli's office from State Deputy Health Commissioner Sue Kelly.

Kelly also said the state office that handles oversight of HIV/AIDS agencies "is in the process of updating many of its internal procedures and monitoring protocols."

The report's findings have been forwarded to State Attorney General Eric Schneiderman's office, according to DiNapoli's office. Schneiderman's spokeswoman, Melissa Grace, said, "We cannot comment on potential or ongoing investigations."

In May 2011, Nassau County Comptroller George Maragos announced an audit of LIAAC but a year later referred the matter to DiNapoli and Schneiderman due to "lack of cooperation from the agency" in handing over financial records.

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