Nassau County in New York finds books in a mess

240 bank accounts left idle for so long that state declared them abandoned

April 11, 2002|By Dionne Searcey | Dionne Searcey,SPECIAL TO THE SUN

NEW YORK - When the new Nassau County, N.Y., treasurer took office in January, he was shocked to find that not only did Nassau have more than 100 separate bank accounts, but no one even knew how much money they contained.

"Who's watching what the balances are? Who's making sure the money is in interest-bearing accounts?" Henry Dachowitz asked.

The answer, he soon learned, was no one.

Dachowitz's discovery highlights the breakdown in Nassau County of one of the most rudimentary functions of government: As it pays out $100 million on tax grievances every year and struggles with more than $2 billion in debt, this suburb of New York City has lost track of a significant amount of offsetting revenue that dribbles in in nickels and dimes.

Millions uncounted

Millions of dollars in cash flows uncounted and undeposited through Nassau parks each year. At the fire commissioner's office and traffic agency, more than $500,000 worth of checks piles up for weeks at a time before being deposited. County officials simply forgot about as many as 240 bank accounts, leaving them idle for so long that the state declared them abandoned.

"These problems are endemic; not just in the sizable things but in the normal, simple procedural things, we're getting it wrong," Dachowitz said. "It's procedural stupidity."

Dachowitz estimates that fixing the county's cash-flow troubles would save about $5 million, a minuscule amount compared with Nassau's giant debt. But in cash-strapped Nassau, every penny counts.

The accounting problems became clear as soon as Dachowitz, a former business consultant and chief financial officer at three high-tech companies, walked through the treasurer's office doors in January.

"I thought it was an accounting museum," he said.

Millions of canceled checks are stuffed in 1950s-style Army-green file cabinets. Dozens of dusty, leather-bound accounting ledgers are stored in a decades-old wooden safe, secured with a silver combination lock.

Those ledgers track $2 billion worth of debt and millions of dollars in cash transactions. Every day, updated dollar figures are penciled onto the books' oversized five-column pages.

One of Dachowitz's most alarming discoveries was the county's haphazard banking system. Nassau keeps tens of millions of dollars in 130 accounts at nine banks.

The county treasurer, the person in charge of tracking Nassau's finances, doesn't even receive all of the bank statements. Instead, many go to individual departments. Because the low-tech county doesn't log on to bank Web sites to shift money between accounts electronically, Nassau racks up fees for making transactions with faxes and phone calls.

As for those 240 abandoned accounts in the county's name, state comptroller's officials, who had taken them over, are working with Nassau to verify them. So far, they've found 142 accounts containing a total of $11,000 that the county had neglected.

Instituting controls

At the Nassau traffic agency and the fire commission office, however, county officials are trying to institute controls. The treasurer shipped equipment and workers to each of the agencies recently to help reduce major backlogs in depositing checks.

Officials at the fire commission, which takes in about $5 million a year in licenses and fines, are typically about six weeks behind in depositing more than $40,000 in checks, said Tom Tiley, county fire marshal. The fire officials say they'll have to rely on the treasury workers to get the situation in order.

The beleaguered traffic agency also is getting the treasurer's help. At the agency, check depositing is constantly backlogged and drivers seeking to pay recent tickets are turned away because officials have no record of the infractions.

For Doreen Banks, the new parks commissioner, getting control of cash flow means first finding the leaks in the system. Since taking office, she has received complaints that employees have been stealing cash for years.

Hundreds of thousands of dollars in cash is stacked in drawers and metal boxes in dozens of park offices. And while Nassau County earns almost $6 million a year from golfing greens fees, no one keeps track of the tickets residents buy for golf tee times. That means workers could be giving them away free, and no one would know it.

Dionne Searcey is a reporter for Newsday, a Tribune Publishing newspaper.

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