An audit by the Nassau County Comptroller's Office has determined that several areas of spending within the Hicksville Water District need to be curtailed. While an audit conducted for years 2004 and 2005 found no evidence of illegal operation, fraud or abuse of taxpayer funds within the district, Comptroller Howard Weitzman announced at a press conference Tuesday that several of the district's administrative policies and procedures along with procurement practices, operating and administrative expenses and allocation of revenues - particularly in terms of how Hicksville's commissioners are reimbursed for their time - required some fine-tuning.

Currently, Hicksville's water district superintendent receives an annual salary while its three commissioners receive compensation on a per diem basis. Under New York State law during the specific two-year period audited, commissioners received a flat-fee payment of $80 per day (that amount has since been increased to $100). Water district commissioners under that same law, however, are prohibited from being paid for services classified as "nominal, unsubstantial, trivial or inappreciable."

The comptroller said that Hicksville's three commissioners met more than twice a week and were reimbursed thousands of dollars in per diem payments during the audit period while the audit showed little or no evidence of work performed or hours worked.

According to the audit, Hicksville's three water district commissioners in 2004 and 2005 attended 223 meetings at $80 per meeting, per commissioner for a total of 689 per diem payments. Over the two-year period, it is averaged that each of the three commissioners attended more than two meetings a week for a combined per diem compensation of $28,160 in 2004 and $26,960 in 2005 - plus benefits.

Auditors found that the "number of professional organization meetings attended and the number of commissioners attending each meeting" appeared unreasonable. Additionally, the report found the documentation supporting the days commissioners were paid inadequate since it included only lists of dates and not hours worked, meetings attended or district business performed.

In the district's defense, Hicksville Water District Commissioner Karl Schweitzer said a meeting is constituted as anything that is not trivial or meaningless and includes board meetings, financial reviews, budget hearings, etc. as well as attendance at community or civic association meetings only if a commissioner is invited to be keynote speaker. They do not get paid to simply attend, he said. Additionally, phone conferences, said Schweitzer, are not paid expenses regardless of the length of time spent on a district-related call or if it is held in place of an actual meeting.

Auditors also found that Hicksville's commissioners were "rewarded with thousands in per diem payments based on little or no evidence of their hours or work performed" and that they received the "maximum amount of compensation allowed for that period for work that was sometimes nominal, unsubstantial, trivial or unimportant," Weitzman said.

"Why do they have so many meetings? School boards work with much larger budgets and only meet twice a month. Fire districts only meet once a month, sometimes more frequently. Neither meet anywhere near this frequency and both receive no compensation," Weitzman said.

In response to the auditors' recommendations, however, the water district's board of commissioners, which includes Schweitzer, Nicholas Brigandi and Richard Humann, has established a new procedure and written criteria to govern what meetings will be reimbursed on a per diem basis. Auditors suggested that the day, time, number of hours worked and the nature of the work performed be provided in sufficient detail to assure taxpayers that the services rendered are not nominal, trivial or inappreciable. In their response, the district states that its "new procedure provides records the comptroller seeks" and it will "give insight into the countless hours [the commissioners] devote."

In addition to per diem payments, the audit also included recommendations on several other items, including, but not limited to:

According to the audit, travel, meetings and conference expenses accrued when all three commissioners attended conferences held in Orlando, FL in June 2004 and San Francisco, CA in June 2005 totaled $8,778 and $10,412, respectively. While the audit questioned the need for all three commissioners to attend the conference each year, Schweitzer told the Hicksville Illustrated News that having all three commissioners attend is necessary.

"Our commissioners essentially attend one conference per year. The conference is the American Waterworks Association conference and it provides officials with the opportunity to receive informational updates to help them in performing their duties. The conference provides a level of training that we believe all commissioners should experience on an annual basis," Schweitzer told the Hicksville Illustrated, adding, "The purpose of the conference is for all water district personnel to get together and share ideas and learn more about the industry, enhancements, etc. There are so many sessions running at one time it is necessary for all of us to go in order to spread ourselves out and learn more about what is available."

The audit reported that commissioners' meal reimbursements for these trips was also excessive. At the two conferences, $2,213 was spent on meals with approximately $600 (or 27 percent) exceeding federal rates. Auditors also found that commissioners submitted expense reports without reciepts and for expenses that, according to General Municipal Law §77-b, should have been paid for by the commissioners themselves because they weren't pertinent to their attendance at the conference.

As a result, the audit determined that the commissioners were inappropriately reimbursed for travel related expenses totaling $1,047 during the audit period, including $737 for hotel expenses for an additional night after the conference ended for no apparent business purpose; $161 for snacks in addition to meal costs; and $149 for coffee, taxis and snacks in which supporting receipts were not provided.

Auditors recommend that the district evaluate its meal allowance reimbursement policy in light of maximum amounts permitted by the U.S. General Services Administration for federal employees and refuse to approve expenditures not supported by receipts.

According to Schweitzer, "The federal guidelines mentioned in the [audit] relate to the rate table established by the Government Services Administration. The audit applies that rate table. However, the audit ignores the fact that the rate table is only a part of the Federal Travel Regulation. That regulation provides the rate table as a guide and then permits federal agencies to exceed the rate table based upon circumstances such as convention rates and other variables encountered at the location of the travel."

He continued, "[The Hicksville Water District has] adopted a per diem ceiling for meals that is higher than the rate table but requires the traveling official to provide receipts. We do not consider this meal per diem ceiling to be excessive ... the district recognized the need for a travel policy in late 2005 and created a policy to address the meal issue along with all related travel needs for the commissioners," Schweitzer said.

At the end of 2005, according to the audit, the Hicksville Water District had $3.5 million in cash ($2.5 million reserved for repairs and capital projects and $1 million in the general fund) with no formal policies on how to handle or invest the cash. The audit found that "internal controls over these large balances were inadequate because the district did not have a formal bank reconciliation process to ensure that bank account balances were properly monitored and cash transactions were properly authorized and reflected in the financial statements." Additionally, the audit determined that investment decisions "were being made without analysis of competitive rates or prior approval of the board and that the district did not have a formal, supervised process for reconciling its bank accounts."

Schweitzer stated that the Hicksville Water District has had an effective reconciliation process in place for many years. "The existence of $3.5 million at the end of 2005 would relate to funds needed and set aside for capital projects related to the public water supply infrastructure," said the commissioner, adding that "The district's bank accounts were reconciled each month but not in the manner the county wanted it done."

According to Schweitzer, the different method of reconciliation used did not hinder the district's ability to account for all funds. "Both the county process and the district's procedure meet all of today's government accounting standards. We felt that their procedure was very time-consuming." However, following the audit, the district has revised its "procedure to a more formal bank reconciliation," Schweitzer said.

Another item in the audit focused on the district's four memberships to Costco, which included additional cards the commissioners provided to their spouses. According to the audit, there was no district policy pertaining to such memberships and there was no evidence of a clear business purpose for them. While the auditor's report states the district acquired the memberships to facilitate the purchase of bottled water, Schweitzer said such was not the case and that the water district's response was taken out of context. He said the memberships were acquired to purchase bottled water in the event of an emergency. They were not used, Schweitzer said, to supply district employees and commissioners with bottled water.

"The district's last purchase [at Costco] was in 2005 and the main purpose of retaining the membership was to provide an avenue to procure bottled water at large quantities in the event our water supply was compromised and we had to issue our consumers with water in an emergency," he said. "This remains part of our emergency response preparedness plans as required by the Nassau County Health Department."

Schweitzer told the Hicksville Illustrated News that, under the recommendation of the audit, "all memberships to Costco have since been discontinued."

Additional items included can be viewed in the complete audit report, which is available online at www.nassaucountyny.gov/agencies/comptroller/index.html. In addition to Hicksville in the Town of Oyster Bay, Weitzman's office also audited the Franklin Square (which was released Tuesday as well) and the East Meadow Water Districts in the Town of Hempstead and the Westbury Water District in the Town of North Hempstead. The findings of the East Meadow and Westbury Water District are expected to be released next week. The completed audits have since been sent to the Nassau County Legislature and the Nassau County District Attorney's office for review.

Weitzman believes the only reasons water district commissioners would meet so often is because they are being paid to do so. "This is a system that lends itself to abuse and we are calling for reform," said the comptroller.

As a result, Weitzman who has been vocal in his quest to seriously consider the consolidation of some of Nassau County's over 200 special districts, is publicly calling for the "elimination of compensation and benefits for all special district commissioners." Doing so, he said, would "put them on the same footing as school board members and fire commissioners who, under state law, do not get paid for attendance at meetings and are not entitled to any compensation or monetary benefits."

Schweitzer said that the fact water commissioners get paid is not something new and has been in effect for many years in accordance with the New York State Comptroller's Office. "I don't know why it is done this way but there must have been a reason years ago that the state felt a need to pay water commissioners for the duties they undertake," he said.

When asked if he would still serve as water commissioner if the position was unpaid, Schweitzer said, "I don't work for compensation." Additionally, he believes that if the position were changed to an uncompensated one, districts "might lose something in the mix." "I am not saying you would, but you could, in terms of the level of personnel."

Although Weitzman is in favor of consolidation he realizes that when it comes to special districts, each one needs to be looked at individually and differently. "You can't lump them together," he said. "Each of these districts is different but the issue of compensation of commissioners is the same throughout. There is no reason water and garbage commissioners get paid and school board members and fire commissioners do not."

Currently, consultants retained by Nassau Executive Tom Suozzi are reviewing the county's water and sewer districts to determine whether financially it makes sense to consolidate them. In the meantime, Schweitzer, who also serves as president of the Nassau-Suffolk Water Commissioners Association, most recently spoke out publicly against the consolidation of water and fire districts at July's Long Island-based Commission on Local Government Efficiency and Competitiveness hearing. At this time, Schweitzer said he was skeptical of the suggestion pushed by Suozzi that Nassau County take over the water districts. He stated that since the county regulates water quality through its own health department, it should not be the supplier as well simply from the standpoint of avoiding conflicts of interest. Furthermore, he said, there is the obvious fact that Nassau County has no experience in running a public water system.

"When the comptroller embarked on his special districts campaign we were very open to having an external auditing perspective and looking at the auditing process as a learning process," said Schweitzer in regards to the audit. "We have made adjustments to most of the findings before the audit was released and are planning the future course of this district. We remain open and honest in everything we do and will continue to meet regularly with our consumers and feel that the local service we provide is by far the best of any water supply system available on Long Island."

Schweitzer believes that payment is justified for the service provided. "Water commissioners and members of the Nassau County Board of Assessors are not much different. The county pays a board to meet a couple of times a month and they also receive benefits. They don't have the obligations like we do. We spend a considerable amount of time in this position and make ourselves available 24/7, 365 days a year," he said, adding that perhaps fire district commissioners and school board members should be compensated.