LEADER-HERALD
Gloversville, NY
December 14, 2004

District addresses state audit findings

By ANNMARIE MARANO, The Leader-Herald

JOHNSTOWN -- The Hudson River-Black River Regulating District had a lot of explaining to do Monday morning.

Those who attended Monday's board meeting arrived anxious to hear the district's response to the results of a state audit released in November that had been conducted by the office of New York State Comptroller Alan G. Hevesi from April 1, 2002, to March 31, 2004.

The audit found the district was poorly managed and cited evidence of potential impropriety.

At the meeting, the board pinpointed the 21 recommendations made by the comptroller for the district to work on, its planned course of action to address each recommendation, the staff member responsible for the completion of that action and the date the action will be achieved.

"Are we surprised by certain things in it (the audit)?" asked Garry L. Veeder who addressed the district during the public forum. "No."

Veeder has had a summer home in Broadalbin since the early 1950s.

He stressed the importance of professionalism and integrity as he addressed the audience. Certain findings of the audit were "damning to me personally," as a state employee, he said.

Veeder is a forensic scientist at the New York State Police forensic investigation center in Albany.

The audit could have been written more favorably to acknowledge some actions that had been taken by the district and completed before the audit took place, said district Chief Fiscal Officer Henry S. Hess.

"I am an optimist," said the district's Executive Director Richard H. Lefebvre. Many changes have already been made to the district and there are many to come, he said.

"I stand before you absolutely convinced that the glass is half full," he said.

He said he believes that by Feb. 20 the board will be able to submit a report to the comptroller stating that all recommendations have been addressed.

The district has 90 days to write back to the comptroller with the remedial actions taken to show the district is complying with the findings of the audit.

The first recommendation was addressed with a resolution that acknowledged that two of its five members currently receive dental and vision care insurance benefits provided by the district and two currently receive full health, dental and vision care insurance benefits provided by the district.

The resolution terminated the provision of any and all health, dental and vision care insurance benefits for current board members by Jan. 31.

A second resolution was adopted which restated and clarified that the district has a full-time chief fiscal officer and a full-time general counsel, who both joined the district on July 12.

The audit found that former secretary-treasurer George Scaringe and former legal counsel for the district Tim Foley were receiving full-time salaries and benefits for part-time work.

Neither man submitted timesheets. The comptroller's team discovered personal records of both men that stated the secretary-treasurer worked on average four hours a week for $62,000 a year, while the legal counsel worked an average 18 hours a week for $75,000 a year.

One of the recommendations made by the comptroller was to re-evaluate the salaries and benefits for a secretary-treasurer and legal counsel.

Another recommendation instructed the district to work with the New York State Retirement System to determine if employment credits for both positions had been overstated during the audit period.

The NYS Retirement System has already been sent a letter, Lefebvre said.

"I have accepted full responsibility," Lefebvre said.

Another recommendation suggested the district require all employees to properly complete time records.

Hess reassured the audience that now all employees submit time cards. Hours are recorded on a monthly time sheet "that is audited in the accounting department and approved by each individual's immediate supervisor," according to the district's planned action.

Veeder brought copies of a New York Post article about Scaringe, former secretary-treasurer. "You've got problems when it's reaching that far," he said.

"I'm optimistic," Veeder said of the district's promises to address the comptroller's recommendations. "We'll see what happens."

The focus of the next two board meetings will be addressing and dealing with the comptroller's audit as the district prepares its response for Feb. 20, Lefebvre said.

THE RECORDER
Amsterdam, NY
December 14, 2004

Board addresses lake audit

By CRAIG CLARK

Recorder News Staff

JOHNSTOWN -- With nearly a year's worth of changes for the better, the executive director of the heavily criticized Hudson River-Black River Regulating District said Monday he's optimistic about the public authority's future.

"There have been many changes in the district during the past 11 months," executive director Richard Lefebvre said as the board of directors met for the first time since the release of a critical audit by the state comptroller's office.

That audit, which examined the district's operation between April 1, 2002, and March 31, 2004, concluded that the regulating district board provided lax oversight and engaged in improper practices such as accepting extensive health care benefits they were not entitled to and providing high salaries to two employees who only worked a few hours a week.

Noting his optimism, Lefebvre, who was appointed in January as executive director of the regulating district -- which oversees the operations of the Great Sacandaga Lake -- said he sees the "glass is half full."

"Our district has a long history and that history and your relationship to it, be it real or perceived, cannot be confused with where we are today and where we are going," he said, addressing a crowd of around 30 spectators.

Public criticism and scrutiny of the district has been high for more than a year now ever since the board's failed attempt to drastically increase the price of access permits on the Great Sacandaga Lake.

Saying changes have occurred since his appointment -- changes that have been noted by members of the public speaking at recent board meetings -- Lefebvre said more changes are coming. Some of them took effect following board action Monday.

On the recommendations in the comptroller's audit, the board revoked the insurance benefits of four of the five board members who were receiving them against the provisions of state Environmental Conservation Law. The district Monday acknowledged that two of its board members were receiving dental and vision benefits and two others received full health, dental and vision. The board's most recently appointed member was not offered any insurance benefits and wasn't receiving them.

The termination of the health care benefits takes effect Jan. 31.

The board also passed a resolution "restating and clarifying" that the district's legal counsel and the chief fiscal officer are full-time employees.

In June the board appointed legal counsel Shari Calnero to replace Timothy Foley and current fiscal officer Henry Hess to replace former secretary/treasurer George Scaringe.

The comptroller's audit found that both Foley and Scaringe were being paid full-time salaries for part-time work; Scaringe was being paid $62,000 for four hours of work per week and Foley $75,000 for 18 hours a week.

The district also reported full-time service credits to the New York State Retirement System for both Foley and Scaringe and they both received full health, dental and vision benefits, the audit found.

The reporting of full-time credits for Foley and Scaringe is still being investigated by the comptroller's office and the district has brought the matter to the attention of state retirement system officials.

The board also reviewed a proposed code of ethics, as suggested by the audit, and is expected to adopt the code at a later time.

Members also heard updates on many of the provisions that have already been taken to satisfy the comptroller's recommendations and heard plans for addressing the remaining suggestions and comments.

Steps taken so far include the implementation of numerous accounting safeguards, such as the limiting of access to petty cash, which was completed in August, the district said. Also, a board committee system was adopted in April.

"There was a lot of merit in a lot of the recommendations of OSC," Hess, said. "In some cases we think that they could have looked at things a little differently, and we could justify a lot of the things and a lot of the things were corrected at that time. Unfortunately we think the report could have been written more favorably to give credit for all the things that had been done prior to when it was issued."

"Certainly with the assistance of our executive director we have started looking ahead. And I'm trying to take a very positive approach and hope the public realizes that and will work with us," board chairwoman Anne McDonald said.

Monday's meeting, which stretched past the four-hour mark, left Lefebvre saying he was confident that all of the issues raised in the comptroller's audit were addressed.

He said in the next two months, in time for the comptroller's deadline, the district will be able to bring closure to the audit.

In other business, Hess reported that the state attorney general's office has reviewed a contract with an Albany auditing firm to review the district's permitting system, and the associated fees, on the Great Sacandaga.

The district recently chose Bollam, Sheedy, Torani and Co. to perform the long awaited permit system audit, which is expected to arrive at just what fees should be charged for access permits on the manmade reservoir. The fees have been frozen until the completion of the audit.

Hess said once the state comptroller approves the contract, then Bollam, Sheedy, Torani and Co. can proceed with the work. He expects comptroller approval by the end of the month.

Also Monday Calnero reported that there is some light at the end of the tunnel for the pending litigation between the district and its two largest beneficiaries.

The Niagara Mohawk Power Corp. and Erie Boulevard Hydropower have the regulating district in court looking for an assessment reduction and retroactive repayments. Calnero said she's confident the district is in a strong position in the litigation, a motion will soon be filed in the case, and a conclusion might be seen in the next few months.

"I believe we're looking at at least a preliminary ruling this spring that will be a strong indicator and provide a road map for this very complex matter that's facing the district," she said.