Did Nassau County Comptroller Jack Schnirman suggest during a county budget hearing Friday that administration of County Executive Laura Curran was misrepresenting its finances to potential investors?
Top budget officials emphatically responded there has been no misrepresentation.
“The county provides accurate and factual financial data to rating agencies and municipal debt markets,” said Mark Page, deputy county executive for finance.
Schnirman also denied, after he left the hearing, that the county was misstating its numbers.
“If the question is, is accurate financial data being communicated, the answer is yes,” Schnirman said.
But it sure sounded like Schnirman suggested county misrepresentation under questioning by Presiding Officer Richard Nicolello (R-New Hyde Park).
First some background:
Schnirman, a Democrat who took office in January, has described the county’s finances differently than the current or past administrations, the state board in control of the county’s finances or previous county comptrollers.
Earlier this year, he made headlines when he reported the county’s unassigned fund balance, which he calls the county’s savings account, was $68.8 million in the red at the end of 2017 while county’s office of legislative review found that the county was $355.9 million in the black when considering all funds.
Schnirman said he was using national standards not historical Nassau measures.
At Friday’s hearing, Nicolello said the Curran administration had described Nassau as having a $146.2 million fund balance in its official statement to credit rating agencies for borrowing. How was that consistent with Schnirman’s $68.8 fund balance deficit, Nicolello asked.
Schnirman again explained he was using national standards recommended by the government accounting standards board.
Should the county use those standards “when we are submitting financials to the bonding agencies?” Nicolello asked.
“Yes,” Schnirman answered, again saying that the county had raided its savings account.
So, Nicolello said, that means the county, when submitting its financial statements, should say it raided its savings account instead of claiming a $146.2 million fund balance.
“What you’re saying is the county is misrepresenting its financial conditions to the borrowing agencies,” Nicolello concluded.
“It’s up to the administration,” Schnirman responded.
But Page said afterwards, “We are not in the business of misleading investors. That’s the last thing we’re interested in doing. You want your investors and rating agencies to understand what you’re doing.”
Page continued, "The financial statements do take a very elaborate view of all accounts and transactions basically." Schnirman, Page said, was "focusing on one particular analysis of something and he is simplifying it in a way that isn’t quite right.”
Schnirman later clarified his statements. He noted that the bond offering statements, which are public, referer to Nassau’s audited financial statement which means that the ratings agencies, “have access to all the county’s numbers. I don’t see that they’re misrepresenting anything.”
Curran’s budget director Andy Persich later answered still more questions from legislators about Schnirman’s numbers.
“Accountants like to make things tough for people to understand,” Persich said. “What the comptroller was discussing ... I think he was referring to the rainy day fund balance being negative.”
But Persich said, “There are positive line items in the financial statement that make it a positive number.”