State audit finds Hempstead failed to bid out nearly $4 million in contracts 

Hempstead Town paid nearly a dozen service providers $4 million in one year without seeking competitive bids, according to an audit released last month by New York State Comptroller Thomas DiNapoli’s office.

The comptroller noted the audit examined 2018 records and the office continued to monitor to see if competition was sought for the services through the end of last year. Examiners also stated that several subcontractors were paid without required written pre-approvals and, in one instance, a vendor was overpaid.

“When Town officials do not seek competition for services, they cannot assure taxpayers that services were obtained in the most prudent and economical manner, without favoritism,” the auditors wrote.

New York State law requires that purchase contracts of more than $20,000 and public works contracts that aggregate to more than $35,000 in a 12-month period be competitively bid. The town’s procurement policy also requires a request for proposal (RFP) for the professional services in excess of $10,000 annually, the comptroller’s office noted.

Examiners reviewed the process for how the town selected 35 professional service providers and paid more than $20 million during the audit period. They found the town did not seek competition for 11 of those vendors, whose contracts totaled just over $4 million. Those vendors provided legal, information technology, engineering, accounting and insurance services, according to the audit.

The auditors said the town’s accounting services have not been subject to an RFP since 1995 and an IT vendor with no written contract with the town has been paid based on a resolution dating back to 1998.

In a response to auditors, town Comptroller Dominick Longobardi said there are exceptions to the state’s procurement guidelines. He wrote that it’s common for specialized professional services and vendors with certain technical skills, expertise or knowledge to be retained for an extended period of time.

Longobardi pointed to an engineering contractor hired in 1995 for a long-term project monitoring and cleaning up underground storage tanks as an example of a vendor providing a service the town that should not be required to post a new RFP for. He said the town’s bidding process should be “based on sound business practices and decisions.”

Auditors said putting such services back out to bid “may be an opportunity to generate cost savings” for a municipality.

The audit also found that five subcontractors were paid $9.3 million “without required written pre-approvals” for engineering projects. In another instance a vendor was paid $12,382 more than was bid for tires, according to the audit.

“Officials did not have adequate procedures in place to ensure all bid specifications were met, all change orders were approved by the board and all payments were in accordance with the bid specifications,” the auditors wrote. “As a result, the board and officials did not ensure that all work was properly authorized and that prices were in accordance with the bid specifications.”

A town spokesperson declined additional comment.