By Hank Russell
Two Long Island villages were found not to have filed their annual financial reports (AFRs) in a timely manner, according to a report from the New York State Comptroller’s Office (OSC). In addition, both villages failed to complete annual audits of their AFRs.
“Villages provide critical services to residents, and many are doing a good job of giving the public a transparent look at how they are spending taxpayer money,” state Comptroller Thomas DiNapoli said. “Those that don’t file are leaving taxpayers in the dark about how their money is being used or if fiscal problems exist. Financial transparency is a cornerstone of good governance, promoting accountability and reducing opportunities for financial mismanagement.”
In its report on Cedarhurst Village, auditors found that the village board did not file its AFRs for the 2022, 2023 and 2024 fiscal years. As of September 30, 2024, the 2022 AFR has been 762 days — more than two years — late. The 2023 has been 397 days — more than one year — late and the 2024 has been 31 days, or one month, late. (Under state law, villages must file their AFRs between 90 and 120 days after the end of the fiscal year.)
The auditors also found that the village also failed to conduct an annual audit on its 2022-23 report. Further, the audit for its 2019 report wasn’t completed until May 2023. In addition, $5.5 million in revenues and expenditures were not properly recorded. As an example, payroll and health insurance amounts, and the tax levy were entered on the balance sheet instead of being categorized as salary expenditures and real property tax revenue.
“Due to the Village’s lack of transparency, taxpayers and other interested parties could not properly assess the Village’s financial condition and make informed decisions,” the auditors said in their report.
To rectify the situation, the auditors recommended that the board conduct an annual audit of the chief financial officer’s records, make sure the CFO prepares and files the AFR and let the residents know the AFR is available for viewing. They also recommended that the clerk-treasurer should provide accurate and complete financial reports to the board, and prepare and file the AFR with the comptroller’s office as required.
In response to the findings, Mayor Benjamin Weinstock said that the delays in the filings and audits during the five-year period were due to COVID, the loss of three senior account clerks and the clerk-treasurer and CPA firm “were awaiting clarification on how to record the transfer of its sewer operations to the County in the Village’s accounting records.”
Weinstock said the village has hired a CPA as an employee to help the CFO “catch up and complete any missing information needed to file AFRs and financial statements, and to remain current thereafter.” He also noted that three of the missing AFRs have been posted, another will be file by the end of the year and the other two will be filed “within 60 days thereafter.” After they are filed with the comptroller’s office, they will be posted on the village’s website.
The comptroller’s office recommended that the board members take online training sessions on the OSC website, to which Weinstock agreed.
As for the Village of Great Neck, the OSC found that the village has not filed its annual report since 2019. The 2020 AFR has been 1,492 days late, as of September 30, 2024, and the 2021 AFR is 1,127 days late. The last three reports (2022, 2023, 2024) were not filed, running behind by 762, 397 and 31 days, respectively. Because of that, the residents were unaware of the village’s fiscal activities for the past four years.
In addition, the village failed to conduct an annual audit. The last time an audit was conducted was during the 2018-19 fiscal year.
“Although our review did not identify any significant fiscal concerns with the Village’s general fund for the fiscal year 2022-23, the Board’s ineffective oversight resulted in a lack of transparency with the public regarding the condition of the CFO’s records and the Village’s fiscal activities,” the auditors wrote in their report.
The OSC recommended that the village board conduct annual audits, make sure the CFO prepares and files the AFR, let the residents know when the report is available online and onsite and attend online training sessions provided by the OSC.
Dr. Pedram Bral, the mayor of Great Neck, wrote a letter in response to the findings and recommendations. He attributed the lack of audits and filings to the departure of its clerk-treasurer in 2019, the COVID outbreak, the sudden resignation of its deputy clerk and deputy treasurer in 2022 and a catastrophic fire later that year.
“[W]hile there was no loss to any financial records or documents, this destructive event further restrained the ability of an already understaffed workforce,” Bral said. “As a result of this incident, the Village was required to seek and relocate to a new work site, further exacerbating the ability of Village staff to perform their state mandated work requirements.”
Last year, Bral said, the village hired two deputy treasurers, which “have brought the Village’s financial records up to date.” The clerk-treasurer is now responsible for complying with the state requirements for transparency. “Although the Board regrets its failure to cause the CFO’s financial records and reports to be audited, resulting in an issue of transparency of fiscal activities, considering the catastrophic events that the Village has endured, the Village remains triumphant.”