An audit of the Town of Hempstead’s animal shelter has found problems with its handling of finances, including budget overruns, Nassau County Comptroller Jack Schnirman said Tuesday.
According to the comptroller’s report, the town’s “Tails of Hope” charity program to finance animal care operated with a “lack of transparency.” The report found that even though the program is not a 501(c)(3) nonprofit organization, it was receiving private donations to provide funding for animal care outside of the town’s approved operating budget for the shelter. These donations were not tax-deductible.
“We found serious financial issues with how taxpayer funds, fees, and donations were collected, tracked and spent,” Schnirman said in a news release.
The funds for the program were not deposited in a shelter bank account but instead were combined with other town funds in one bank account. That could create a scenario where funds meant for the “Tails of Hope” program could be diverted to other activities, according to the comptroller’s report.
The office also had trouble examining financial activity in the donation-based program, as no separate financial funding had been done, so a report had to be done based on an analysis of balance sheets and general ledgers. The audit revealed that cash collections for the shelter in Wantagh and “Tails of Hope” program totaled over $337,000 during the audit period, 2015 to 2017. These collections lacked documented review.
In 2017, the shelter’s expenditures were $4.25 million and exceeded the budget by $428,893, or 11 percent. Actual personal services expenditures stood at $3.23 million, which overshot the budget by $260,904 and accounted for 76 percent of all expenses at the animal shelter. Contractual expenses were $1.01 million, surpassing the expected amount by $167,989, or 24 percent. The fees and structural expenses were over budget by $194,483, including $184,972 that was spent on legal fees.
The comptroller’s report recommended that the town immediately undertake its own operational audit of the shelter, including a detailed internal review of staffing, purchasing and the care of animals. It also said the town should establish a registered 501(c)(3) charity to provide transparency and accountability with donated funds and adhere to the town’s collective bargaining agreement, among other recommendations.
The report said the Town of Hempstead had thanked the county comptroller for making the comptroller office’s resources available to conduct a financial review and noted the findings offered the town an opportunity to take a “broader look” at its actions and make changes to “strengthen their internal controls.”
Town Supervisor Laura Gillen thanked the comptroller for accepting her invitation to do the audit in a statement, saying, “I believe this audit is important now, just as I did last year when I requested it, in order to properly correct the mistakes of the past. I am pleased to report that many of the Comptroller’s recommendations, such as the need for greater restraints over spending, have already been embraced and implemented during my new administration.”
In her statement, Gillen said that her administration has “aggressively moved to replace paper files, which have dominated Hempstead for centuries, with digital files.” Gillen announced that the town has moved all of its financial information online “for everyone to view” and has implemented a new digital financial and payroll records system.
