Probe sought of use of Nassau County funds

Nassau legislators are calling for investigations into charges by an information technology manager that the cash-starved county has diverted a half-million dollars in capital funds to pay for day-to-day operations, violating union contracts and possibly legal promises to county bondholders.

Information network manager Duncan Small, who is targeted to be laid off Thursday, told county lawmakers during a raucous public hearing Tuesday that $450,000 from a computer project financed with borrowed money was used to pay an outside contractor to do normal network maintenance work.

A spokeswoman for County Executive Edward Mangano denied Small's allegations. "The contract that Mr. Small refers to has been in existence since 2007 and we find it odd that on the eve of his termination he makes these allegations," said Katie Grilli-Robles. "We believe his claims to be false and misleading, but we will investigate."

Small, a 17-year veteran of the county's IT department, could not be reached Wednesday. If his allegations were proved, they would violate the terms of the county's contract with the Civil Service Employee Association, which forbids outside contractors from doing union workers' jobs, and could conflict with terms of the bonds sold by the county to pay for long-term capital projects, lawmakers said.

"You can't use capital money for normal day-to-day operating expense," said Legis. Kevan Abrahams (D-Hempstead), who called for the Legislature's Budget Review Office to investigate. "If this is the case, I would think those expenditures would be deemed to be inappropriate and borderline illegal."

"Both of these issues exposes the county to liability," added Legis. David Denenberg (D-Merrick), who had asked for a recess of Tuesday's hearing on Mangano's plan to lay off 128 workers until the county attorney could address potential risks.

Presiding Officer Peter Schmitt (R-Massapequa) denied Denenberg's request and voted with the Republican majority to approve the layoffs. But Schmitt added that "all 19 of us are asking" for the budget review report.

Mangano proposed laying off the union workers by July 1 as one step toward closing a budget gap identified by a state control board. The Nassau Interim Finance Authority imposed financial controls on the county in January after finding a $176 million shortfall.

Minority Leader Diane Yatauro (D-Glen Cove) Wednesday sent a letter to District Attorney Kathleen Rice requesting formal investigation into Small's charges, citing "possible misuse of public funds."

A Rice representative did not return messages. Budget review director Steve Antonio said his office had begun the inquiry by interviewing Small Wednesday morning.

Small told lawmakers at the hearing that the county administration had issued a purchase order in April for $450,000, taking money from an $8 million capital project to upgrade and install a new computer network and using it to pay an outside contractor to do computer maintenance usually done by CSEA members.

Grilli-Robles countered that the work "has been performed, properly and appropriately," and said the contractor has a 5-year-old contract to do "comprehensive computer repair and preventative maintenance."