Nassau County Comptroller Fred Parola has announced the results of his office's six month review of Nassau County's processing of personal service award contracts, calling for sweeping governmental reform. "Nassau County traditionally seeks outside expertise to such a degree as to undermine sound financial responsibility and erode public confidence in county operations," said Parola. "The study we conducted," he said, "did not involve contracts awarded for purchases or to contract agencies and other non-personal vendor services."

The comptroller's review covered all personal service contracts created or amended in the period from September 2000 through February 2001. In the case of contract amendments, activity was traced to the contracts' inception date. The total number of awards (170) represented nearly $17 million in total expenditures. The vast majority (81 percent) of these contracts and awards were negotiated verbally without any competitive bidding process. More than 90 percent started work many months before any written contract document was approved (on average 189 days before), with a significant level of future cost amendments (534 percent average cost increases for awards in excess of $100,000).

In the past year, the comptroller's office, which audits payments of all contracts, has noticed a dramatic increase on the reliance of outsourcing to private firms. "The county's current fiscal situation has left many departments decimated, and the lack of personnel to perform county functions is partly responsible for the increased use of outside services," said Parola. Recently a newspaper article cited the plight of one such county department, the county attorney's office, where "gargantuan" caseloads are overwhelming. In a memo dated Nov. 22, 2000 to the county executive and the legislature, the comptroller states ".. [severe cutbacks have] tremendously increased county expenditures for private firms." "Clearly not only is there a need to add more staff, but sweeping governmental reform is also needed to address the awarding of these contracts," said Parola. The comptroller cautioned that it did not appear that any laws were violated. In fact, current laws and policies allow for such awards. However it is clear by the overwhelming nature of these statistics that these laws and policies need to be changed to protect taxpayers, he said. In calling for reform, the comptroller's office has suggested that the administration and county Legislature consider his 20-point comprehensive plan as a starting point to confront the situation. Key points of the comptroller's plan include:

* Controls to limit no-bid contracts to under $25,000 (cumulative) and periods of less than one year;

* Independent third-party administration of the bidding process;

* Standard contract language to prohibit verbal authorization and retroactive awards;

* Departmental and vendor accountability for contract overages (amendments);

* Formal procedures for cost-benefit analysis and consultant vs. employee (in-house) justifications;

* Union's direct acknowledgement or stated objection to large or long-term outsourcing engagements; and

* Official process whereby amendments would be recorded and tracked.

An additional area of concern to Parola is ethics and the need to prevent potential conflicts of interest wherein former county employees, who are simply performing their same (previous) job, are awarded consultant contracts at significantly higher levls of pay upon their termination from public employment. In calling for reforms in the county's ethics laws, the comptroller stated, "no former employee should be allowed to profit, directly or indirectly, from information obtained or relationships gained through county employment for a period of two years." Currently the county's ethics laws are so vague and subject to user interpretation that they never apply. "Even when applicable," the comptroller added, "the fact that no penalty exists for violations to the [ethics] law provides no disincentive to potential abuses."

The comptroller is seeking action on his proposal to enable the county to implement these critical initiatives in order to ensure effective government. "The time has come for substantive change," asserted Parola. "Business as usual in Nassau County is broken and it needs to be fixed," he said.

Parola also released his office's findings on its limited review of the billing services provided by Collins Research Inc. in connection with the Nassau County Police Department's Emergency Ambulance Bureau. "Our review indicated that the billing procedures at the emergency ambulance bureau were highly inadequate and the controls were not properly identified nor implemented. As a result, significant revenue losses are being incurred by the county," stated Parola.

The comptroller summarized the losses noted for the period 1995 through 1999 as follows:

* $28.5 million were billed for ambulance services but only $16.3 million were actually collected;

* Approximately $1 million in fees were not billed;

* A loss in revenue of $12.7 million was incurred after adjustments were made for faulty addresses and other factors; and

* An additional loss of $521,596 was estimated due to the bureau's failure to identify and forward all billable transports to Collins Research for the period of January through March 2000.

"If the collection rate remains at its present rate," said Parola, "the county will have uncollected revenues of approximately $3.3 million on an annually recurring basis."

The primary reason the comptroller's office found for the loss of revenue, was the lack of collection efforts beyond the billing statements (sent by Collins Research). "The county cannot risk any revenue shortfalls," asserted the comptroller, "and the bureau should be vigorously pursuing debts owed," he added. "Overdue accounts receivables should be coordinated with the county attorney's office for litigation or to an outside collection agency to aggressively pursue collection efforts," declared Parola.

The comptroller released his findings to the county executive, the administration, the county Legislature and NIFA. "This office doesn't just issue reports," said the comptroller. "We review our findings with the agencies and then recommend solutions," he added. To that end, the comptroller listed some of those recommendations as follows:

* The bureau should take steps to properly monitor and control the billing and collection functions relative to ambulance transports;

* Insurance information should be obtained and forwarded to Collins for billing and to implement procedures to ensure collections;

* A strategic plan established that would effectively meet their technology and training needs to support billing and collection activities;

* Every resource should be pursued in obtaining correct addresses for returned bills;

* All bills need to be verified by the ambulance bureau;

* Guidelines relative to writing off patient accounts should be established; and

* Monthly reports prepared which would monitor the status of the bills sent to Collins Research for billing and the amount of revenues received.

In closing, the comptroller suggested that the administration and the Legislature assign a billing and collection supervisor to monitor the collection of overdue fees sought by the county attorney's office and collection agency. This supervisor would also ensure the submission of accurate documentation and reconciliation of billing and cash receipts between the Ambulance Bureau and Collins Research. "The county should commission a collection agency to pursue overdue accounts serviced by the Emergency Ambulance Bureau," said Parola. "This and the other crucial recommendations are vital in properly tracking the system so that the county can substantially reduce its losses," Parola concluded.