The state comptroller’s audit of Hempstead Town’s Sanitary District No. 14 found that the district failed to comply with several transparency and financial regulations.
The state audited the district’s financial operations between Jan. 1, 2015, and Sept. 30, 2016, according to the June 2 report from Comptroller Thomas DiNapoli. The district represents East Atlantic Beach and Atlantic Beach Estates.
The district’s five-member Board of Commissioners does not have a code of ethics that covers appropriate conduct, disclosure of business interest or the receipt of gifts, the report stated. The audit did not find any conflicts and the treasurer told auditors that the board was not aware it needed to have a code of ethics.
The district also does not have a procurement policy for seeking bids for goods and services, the report stated.
The treasurer said the board did not use competitive bidding for its insurance provider because “board members trust the current vendor, and the board used an insurance broker to find the best price for their policy. However, district officials did not obtain quotes from other brokers to determine whether they could get a more competitive price for the insurance vendor.”
The district did not keep comprehensive minutes of its meetings and told auditors that they are not available to the public, which the report said means “there is a lack of transparency and residents are not adequately informed of board activities and decisions.”
The district also did not submit financial reports to the comptroller’s office for fiscal years 2014 and 2015.
In a letter to the state, the board wrote that it would change some of its policies but also disagreed with some of the report’s recommendations.
“One very important factor to consider is the size of our district, the scope of our operation, and the equipment and number of employees we manage,” the letter said.
The board of commissioners could not be reached Tuesday for comment.