Nassau finance board backtracks on vendor-pay warning

Nassau’s financial control board backtracked Wednesday on a new warning to the county against paying vendors for work done before their agreements are finalized.

Citing “confusion” over the language it added to its contract approval forms only last week, the Nassau Interim Finance Authority said it would revise a reference that appeared to flatly prohibit the county from paying contractors for work done before a pact’s full approval to a more general reminder that payment for such work is not guaranteed.

NIFA had updated the forms on March 8 to reinforce what the board said was its existing policy: “NIFA approves this contract/amendment, but no time charges shall be recognized or paid for services rendered prior to” final execution by all parties.

The move came after county legislators had complained that County Executive Edward Mangano’s administration repeatedly had allowed work to start on pacts that hadn’t yet reached lawmakers for a vote.

After Newsday reported the change Tuesday, Nassau Comptroller George Maragos said the language could open the county to “significant liability.” He said he’d stop approving some payment claims until receiving clarification from NIFA.

That prompted a statement late Wednesday from NIFA spokesman David Chauvin: “Because of the county’s continued confusion regarding NIFA’s existing policy, the language on the contract approval form has been further simplified to read: ‘Payment is not guaranteed for any work commenced prior to this approval.’”

Vendors always were warned that they were working at their own risk without approved contracts.

But some nonprofits had expressed concern, before NIFA’s revision, that a crackdown on payments would leave them at further risk, as many provide state-mandated services at the county’s request while awaiting approved contracts.

“Agencies like ours will likely be forced to put health and human services on hold while waiting for the contracting process to run its course,” said Jeffrey Reynolds, chief executive of the Family and Children’s Association in Mineola, which has county contracts for services including running a shelter for homeless and runaway teens.

Maragos, a Democrat who is running for county executive, first expressed his concerns to NIFA counsel Jeremy Wise, prompting Wise to email him to let him know the new language would be removed.

Later, NIFA officials decided instead to revise the language.

Maragos said he agreed vendors should not regularly start work before their contracts are approved. Still, once those approvals come, he said, it’s hard to deny claims for work already done under binding agreements.

“The literal reading of [NIFA’s original language] would have very serious consequences,” Maragos said.

County administrations for decades have allowed work to start on some contracts before all approvals are in place. Minority Democrats in the legislature periodically criticized Mangano, a Republican, for the practice. But the issue didn’t gain traction until the county legislature’s GOP majority also began doing so.

“This contract practice occurs in all large municipalities that deliver social services and other time sensitive services because bureaucracy is slow,” Mangano spokesman Brian Nevin said in a statement Wednesday.

Deputy Presiding Officer Richard Nicolello (R-New Hyde Park) had said last month that he felt the administration “is just looking at us as a rubber stamp.”

Later, Legis. Howard Kopel (R-Lawrence), who is mulling a run for county comptroller, requested a list of all contracts for which work had started early. The administration provided him with a list of 47.

By Paul LaRocco

paul.larocco@newsday.com@paullarocco

Paul LaRocco is a reporter on the investigations desk. Since starting at Newsday in late 2010, he has also covered Nassau and Suffolk county politics and government and the Town of Oyster Bay.