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Comptroller audit faults Nassau public administrators office

Auditors cite allegedly altered time sheets, poor record-keeping and missing cash receipts.

The Nassau comptroller reported Thursday that the political appointee who headed the county office that administers millions of dollars in estates of residents who died without a will allegedly altered his time sheets.

The audit by County Comptroller Jack Schnirman also faults the Nassau County Public Administrator’s office for poor record-keeping, missing cash receipts and the potential for mishandling estate funds because of its lack of checks and balances in financial transactions.

“We are standing up for people who can no longer stand up for themselves and in many cases have no one else to do so,” Schnirman said in a news release. “More than $54 million was disbursed by this office over a three-year period to beneficiaries, vendors, and others without strong internal controls or oversight.”

The public administrator manages the estates of individuals who die without a will and who leave no known heirs or relatives willing and able to administer the estate. Schnirman’s audit began under former Comptroller George Maragos and covers from Jan. 1, 2014, to the present. Auditors sampled the public administrator’s handling of estates from 2014, 2015 and 2016.

As of Dec. 31, 2017, the public administrator reported administering 142 cases with gross estate values of $33.2 million and undistributed values of $26.1 million, the audit said.

Public administrator Jeffrey DeLuca resigned his $154,100 appointed position on Nov. 9 after the comptroller submitted his draft findings. Though DeLuca was not cited by name, the audit reported that the public administrator had misreported his time at work on at least 15 days sampled from November 2017 through March 2018.

The audit said the public administrator came to work late but altered his time sheets to say he had arrived at 9 a.m. Comptroller investigators say that for at least three of those days, he wasn’t doing anything related to his job before he came into the office.

The audit also questioned whether DeLuca, who is the Nassau Republican Committee’s Salisbury executive leader, was eligible for the public administrator’s job after County Executive Laura Curran, a Democrat, issued an executive order earlier this year forbidding her appointees from holding political party positions. The public administrator’s office responded that it is not subject to Curran’s order and Curran spokesman Michael Martino said it did not apply to employees of other elected officials.

The public administrator is appointed by the independently elected Surrogate Court judge but is paid by the county. DeLuca was appointed in January 2011 by then Surrogate Edward W. Mccarty III, a Republican, records show.

Mineola attorney Dennis Lemke, who said he represents DeLuca, said the former public administrator “categorically denies that he was altering any timesheets whatsoever.” He said DeLuca followed office policy by entering his hours manually because he was on call 24-hours-a-day. DeLuca never claimed any time he didn’t work, Lemke said.

Surrogate Court Judge Margaret Reilly, a Republican elected in 2015, has appointed Assemb. Brian Curran (R-Lynbook), the Republican executive leader of Lynbrook, to replace DeLuca at the same salary. Brian Curran, who is not related to Laura Curran, is an attorney who lost his bid for re-election this fall. Brian Curran said he began work for the county on Dec. 10.

Brian Curran said the Legislative Ethics Committee cleared him to begin the job before he officially leaves the Assembly on Dec. 31. He also noted the comptroller’s audit was completed before he started.

“I’m working on reviewing the report and the public administrator’s response and am working on implementing any changes deemed necessary,” Brian Curran said Thursday.

Reilly declined to comment through a court representative.

In its response, the public administrator’s office questioned whether auditors could reach reasonable conclusions after sampling such a small number of cases, noting auditors reviewed only 3.2 percent of closed estates.

It agreed to improve record-keeping and “will make best efforts to keep accurate time and leave records.” However, it also said it would require additional funding from the county to hire the staff needed to make the changes.

Overall, it said, the office is in full compliance with the Surrogate Court Procedure Act and public administrator guidelines.

Schnirman’s audit said the public administrator’s office underreported vendor payments to the IRS by at least $3.3 million during the 2014-2016 period, which included $2.8 million for attorney services.

Auditors also said their review “revealed that cash receipts were not always logged on the estate’s inventory listing; and cash disbursements and inter-bank transfers were not always properly documented and approved. In addition, cash disbursement functions were not adequately segregated. Although Auditors found no instances of misappropriated funds in their testing, these internal control weaknesses increase the risk for transaction errors and the potential for improper handling of estate funds.”

They also found “inadequate records” to properly safeguard estate property held by the public administrator, “thus increasing risk for potential theft or misappropriation.” Auditors said they observed assets for 20 estates in the public administrators’ safe while the safe room’s log only listed 15 estates.                                 

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