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Maragos: Nassau housing office wasted $6.2M

Nassau Comptroller George Maragos. (March 28, 2011)

Nassau Comptroller George Maragos. (March 28, 2011) Photo Credit: Howard Schnapp

Nassau County is on the hook for $6.2 million in unnecessary costs because of mismanagement, fraud and waste in its housing office from 2007 through 2011, according to a new report by County Comptroller George Maragos.

The report alleges that Connie Lassandro, former director of the Office of Housing and Community Development, overestimated anticipated federal revenue from the Section 8 Housing program in an attempt to increase her budget.

The inflated budget, Maragos said, led to unrestrained spending on employees and consultants and the purchase of more than $121,000 in unused furniture.

Nassau officials discovered the shortfall last year and appropriated $6.2 million to cover the gap, exacerbating the county's then-$41 million budget deficit at a time when it is under the control of a state oversight board and was laying off more than 250 employees.

"It is inexcusable to overstate and inflate costs to justify higher expenses and staff," Maragos said.

Friday, Lassandro, who was fired in April 2011, said she "was not prepared" to comment on the report.

"With reports of fraud and mismanagement within the department, County Executive [Edward] Mangano terminated the director appointed by his predecessor and requested a thorough investigation be conducted by both the Comptroller and HUD Inspector General," said county spokesman Brian Nevin.The housing office has been under scrutiny recently. Last week, its former fiscal director, Louis Abate, pleaded guilty to stealing $122,000 in federal rent subsidies meant for low-income county residents.

The report also alleges that Lassandro and Abate misused two Village Housing Authority bank accounts for reasons unrelated to the Section 8 program.

The accounts were used to pay for a party transportation company, limousines, consultants and caterers, the report said. The accounts were also used to pay Lassandro $24,530; a nonprofit associated with the former director received a $16,375 contribution; $7,466 was used to pay a relative of an office employee for a summer internship and $10,000 went to a housing organization that auditors were unable to locate and verify, the report said.

Maragos declined to comment on whether Lassandro's actions were criminal. He turned over his findings to the U.S. Housing and Urban Development Inspector General's Office, which declined to comment.

The U.S. Attorney's Office in Central Islip, which prosecuted Abate, also declined to comment on whether it is investigating Lassandro.Legis. Judy Jacobs (D-Woodbury), who worked with Lassandro, said the allegations are "hard to believe. The Connie I knew was always on the up-and-up and had an impeccable knowledge of housing issues."

The housing office administers $24 million in federal and state grants annually. Those funds include Section 8 vouchers -- federal rental assistance for low-income residents.

The county legislature appropriates funding to manage the Section 8 program based on the historical average number of vouchers it issues, Maragos said. Federal reimbursement is based on actual vouchers issued.

But in the 2007-08 grant year, Lassandro inflated the number of monthly vouchers the county expected to issue, Maragos said. That year, she requested funding for 4,200 vouchers but the actual figure came in at 2,609. From 2008 through early 2011, she requested funding for 4,800 vouchers. The actual number of vouchers topped out at 3,020.

To "camouflage" the gap in funding, Lassandro moved money from other long-term grant programs into the Section 8 program, Maragos said.

The inflated budgetary revenues also allowed the department to increase its hiring -- from 72 staffers in 2007 with a salary of about $4 million to 113 staffers in 2011 with a salary of $6 million. The workforce is now back to 70 employees.

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