Audit: Oversight by Nassau of Sandy contract raises questions
A report released by Nassau Comptroller George Maragos on Thursday, Aug. 17, 2018, found questionable county financial management and oversight of a $12.5M superstorm Sandy cleanup contract. Credit: James Escher
Nassau auditors found questionable financial management and oversight in the awarding of a $12.5 million superstorm Sandy cleanup contract, but sparse county cooperation hampered their probe into the deal, according to a report by Comptroller George Maragos.
The report, released Thursday, found “errors and inconsistencies” on vouchers submitted by VIP Splash Waterways Recovery Group Inc. Nassau chose the Island Park-based firm for the contract, which is the focus of federal and local criminal investigations.
Auditors said they were stonewalled by the county’s Office of Emergency Management from obtaining documents that would justify the hiring of VIP Splash. The firm was incorporated just days before the county first solicited bids for the work — or examined bid proposals from three firms with more experience.
“I am disappointed in the lack of transparency by the county Department of Emergency Management that would not allow the auditors to review important documents that should be in the public domain,” Maragos said in a statement.
Public Works Commissioner Shila Shah-Gavnoudias said the county “fully complied and cooperated with the comptroller’s audit team.”
VIP Splash incorporated in June 2013. Two-days later, Nassau solicited bids to remove sunken vessels and other debris from South Shore waters.
The contract first approved by county legislators was for $4 million. In 2014, the agreement was increased by more than $8 million. A third amendment increased the value by $386,000. The Federal Emergency Management Agency reimbursed Nassau for the contract.
On the same day that County Executive Edward Mangano’s chief deputy, Rob Walker, signed and executed the $8.2 million amendment, VIP Splash made a $2,925 contribution to Walker’s Hicksville Republican Committee, records show. Two weeks later, the wife of a VIP Splash principal gave $1,050 to the committee. Walker has denied wrongdoing.
The U.S. attorney’s office for the Eastern District and the Nassau County district attorney have issued subpoenas related to the contract.
Several VIP Splash principals have ties to a nonprofit, Operation SPLASH, which has lobbied the county on environmental issues.
Nassau’s deal with VIP Splash worked out well, said a spokeswoman for the county DPW.
“This Sandy response contract successfully removed tons of dangerous debris and vessels from Nassau County waterways, making it safer for boaters, marine life and the environment,” said spokeswoman Mary Studdert. “All operations were monitored by both federal and state disaster agencies.”
The audit found VIP Splash paid $4.7 million to 11 subcontractors that worked on the debris removal project. But auditors also discovered errors — totaling more than $1.1 million — in the monthly claim vouchers submitted to the county by agency. The audit does not dispute the accuracy of payments made to the contractor.
“VIP Splash has no comment on interagency matters within Nassau County government,” the company’s attorney, Francis J. Murray wrote in response.
Auditors also found:
- The contract had 8.6 percent participation from minority and women-owned businesses — well below the state’s 30-percent goal.
- Several VIP Splash subcontractors ignored requests for documents related to their compliance with the county’s Living Wage Law.
Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.
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