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Audit reveals conflict of interest

The Village of Lake Grove has violated state law for more than a decade because its attorney is married to a village trustee, state auditors said in a report released Wednesday that outlined a number of alleged shortfalls.

Under a law intended to prevent conflicts of interest by government officials, village attorney Gerald L. Lotto is not allowed to remain in that post while his wife, Eleanor J. Lotto, serves on the village board, said auditors from the office of state Comptroller Thomas P. DiNapoli.

The alleged conflict of interest was among several concerns raised by the audit, part of DiNapoli's effort to review municipalities and taxing districts statewide. The Lake Grove audit covered a 20-month period ending Jan. 31, 2011.

The report said Lake Grove officials failed in some cases to put purchases out for competitive bids and must improve financial controls and safeguard information on village computers.

Lake Grove officials, in a written response to the audit, disputed parts of the report but said they would comply with most of its recommendations, including seeking a new attorney. Gerald Lotto's contract could be voided if he does not leave office, a DiNapoli spokesman said.

In an interview, Lotto said he expects his replacement to be named at a village board meeting on June 21. Lotto, 73, said he and village officials did not know there was a conflict until state auditors raised questions.

"It was just an assumption that there was nothing wrong," Lotto said, adding his wife did not vote on his salary or annual reappointments. "As soon as the state brought it to our attention, we complied. We don't question it."

The audit said Gerald Lotto, who became village attorney in 1996, should not have remained in the post after Eleanor Lotto joined the village board in 1997. Gerald Lotto is paid $19,000 annually, plus $170 per hour for "extraordinary services," the audit said.

"Village officials are accountable to the public," the audit said. "When municipal officials or their close family members conduct business with the municipality that they serve, the public may question the appropriateness of the transactions."

Lake Grove is a village of about 11,160 people in the Town of Brookhaven.

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