Audit finds Hempstead IDA could improve oversight on projects

A state comptroller’s review of the Hempstead Town Industrial Development Agency and five other IDAs found that the agencies could provide better oversight of their projects, while acknowledging that many requirements were not in place during the period the audit was conducted.

Comptroller Thomas DiNapoli’s auditors found that while the Hempstead IDA board “generally provides effective oversight of the Agency’s operations, some improvements could be made,” according to a state report released last month.

The state looked at the policies, procedures and projects of the Hempstead Town, Auburn, Bethlehem, Erie, Orange and Steuben IDAs between Jan. 1, 2014, and May 31, 2015 — a period before 2016 legislation that required new “efficiency and transparency” from the agencies.

In addition, a new Hempstead Town IDA board took over in November after previous members were ousted in a controversy surrounding tax breaks granted in December 2014, to the Green Acres Mall and in April 2015, to the adjacent shopping center, Green Acres Commons, in Valley Stream. The mall and Valley Stream School District 30 are the subjects of a separate, ongoing audit by the state comptroller’s office.

The audit that was released in September found that the IDA board only used a standard project application and did not have more specific selection criteria or ways to independently confirm an applicant’s information, such as job creation and salaries, during the audit period. The IDA began requiring project owners in 2017 to submit state forms verifying such information, the report stated.

The report also indicated that of the 65 projects it studied, only 53 met the job requirements. The IDA has a required policy governing how to grant tax exemptions, but it does not have specific procedures that detail how to recapture a project, the report also stated. “The decision to recapture is done on a case-by-case basis,” the report said.

A letter from the IDA to the state comptroller said the agency continues to make “efficiency, accountability, transparency and accuracy our prime focus.”

“I think the IDA has always acted in accordance with the law and it always will,” IDA attorney John Ryan said Monday.

An earlier version of this story incorrectly described the Hempstead IDA's policy to recapture, or reclaim, tax benefits from a project between Jan. 1, 2014, and May 31, 2015. It was not required at the time.