County to audit Oceanside Sanitation District finances, operations

Nassau County Comptroller Jack Schnirman will conduct a financial and operational audit of Hempstead Sanitation District No. 7 in Oceanside after a history of fiscal mismanagement.

The comptroller’s office review will cover January 2018 through 2020 after a number of complaints and whistleblower tips about district finances and operations.

"The sanitation district has been a lightning rod for controversy," Schnirman said. "But separate and apart from that, it is our responsibility to ensure that taxpayers' best interests are at the forefront of their operations. We will not be shy in our inquiry and will look at both the performance and financial condition of the district."

Schnirman said the audit was not spurred by the recent investigation into anti-Semitic and racist posts by sanitation Commissioner Ryan Hemsley, who has refused to resign.

"While the commissioner's repugnant views are deeply disturbing, they are not the basis of this audit," Schnirman said. "If our audit uncovers that bias in any way impacted the delivery of services to residents or how the district did business, we will act on it."

Sanitation district officials have called for Hemsley's resignation, but said they are powerless to remove him from the two-year term he was elected to in September.

The Nassau County district attorney is reviewing the posts made in recent years, but only have the power to remove him if they can find malfeasance while in office.

Sanitation District chairman Austin Graff said he has been requesting an audit since he joined the board in July 2018, after noticing budget surpluses of $5 million to $6 million. He said he reported financial irregularities to the comptroller and the district attorney.

"For a long time, before I ran, I had a perception that there may be some financial irregularities and I reported those irregularities to the proper authorities," he said. "I wanted a new set of eyes and the transparency of following proper procedures and an independent look at the books in case something was going on."

The Oceanside Sanitation District is independently operated and taxpayer funded with an annual budget of about $8.9 million to conduct trash pickup and disposal for 20,000 residents and businesses in Oceanside.

It is run by an elected board of commissioners, who are each paid $7,500 annually with benefits.

Schnirman said his audit will examine district operations, elections, contracts and nepotism.

Graff said the board has reviewed contracts and hiring to eliminate any conflicts of interest.

"We’ve been doing our job, but we sign every check, relying on office staff to make sure payments are to the right people," Graff said. "This is not something we think is wrong, but in the past there have been issues. If everyone does everything right, there’s nothing to be afraid of. If they uncovered something, they’ll recommend what to correct."

The district was previously audited by Nassau County in 2009 and the state comptroller in 2015. The state comptroller found the district illegally overpaid two former commissioners, Mike and Charles Scarlata, more than $800,000 in retirement benefits.

The sanitation board sued to recoup the unauthorized payments in 2017 and approved a settlement last year for the Scarlatas to return $300,000.

Schnirman launched the audit after the state court of appeals denied an appeal Nov. 4, upholding the comptroller’s authority to audit operations as well as finances of towns and special districts, following an appeal of an audit into the Hempstead Town Animal Shelter.

"When we ask questions, we sometimes get pushback. Now it is clear that when we get pushback, we have the authority to keep pressing forward," he said.

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.