Nonprofit accused of overbilling Suffolk

Suburban Housing Development & Research Inc., a Bay Shore-based nonprofit, overbilled Suffolk $885,000, according to a county comptroller's audit released Tuesday, charging for expenses not covered by its county contract to provide shelter for the homeless.

The audit found Suburban improperly charged the county $253,000 in salary and benefits for programs and services funded by other grants. Suburban also spent $54,000 too much on administration, charged for 100 percent of headquarters expenses that should have been split by three agencies sharing the space and performed shoddy bookkeeping, the audit said.

The audit was to cover Aug. 1, 2003, to July 31, 2004, but was expanded to 2007 when Suburban withdrew from its county contract July 31, 2007.

"It's very discouraging to come across an agency like Suburban, which takes advantage of taxpayers, literally charging the county for non-county programs," said Comptroller Joseph Sawicki.

But David Hilgendorpf, Suburban's executive director, called the audit "unfair and damaging" and said he would fight the findings.

Suburban, under its contract with the Department of Social Services, housed 20 homeless families at 17 sites from Amityville to Bellport. The nonprofit has 66 properties that house about 70 families under town, state and federal programs.

Under the contract, Suburban was initially paid a per diem rate based on estimated costs. Sawicki said auditors found the agency was charging Suffolk for the full salary of employees who also worked at other Suburban properties not covered by the county contract. Hilgendorpf said the agency provided the services for $29 per homeless client per day, less than the average $46 daily rate charged by other county contractors.

"By the audit's reasoning, Suburban should and could have provided the same service for about 30 percent of the average rate, or at $13.80 a person per diem," he said.

Sawicki said Suburban overcharged $104,000 for the interest and depreciation on five vehicles that were not part of the county contract. He also cited a case in which Suburban improperly paid $4,000 in college tuition for an employee, an expense Hilgendorpf maintains was allowed at the time.

"You can't send a worker to college on the taxpayers' dime," Sawicki said.

The audit said Suburban should return a nearly $60,000 surplus from 2003-04 as well as an unspent $120,000 capital reserve fund, which the county had allowed the agency to set aside for repairs.

In 2008, the comptroller pressed the county to recover 11 houses that Suburban had obtained under a state grant; Sawicki said a provision called for the houses to be turned over to the county after 10 years. Six were, but the five others remain in litigation.

Hilgendorpf said there may be room for negotiation if the county would settle the audit findings in return for the disputed houses, valued in 2008 at as much as $1.5 million. He said a deal would need to allow Suburban to keep renting the houses for several years.