County officials hampered audit of probed contract: Maragos

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Nassau County Comptroller George Maragos

The Nassau County comptroller criticized county officials last week for impeding an audit that found accounting discrepancies in a contract that’s the subject of criminal probes.

Nassau’s Office of Emergency Management did not give auditors information about the request for proposals that led to the 2013 pact with VIP Splash Waterways Recovery Group, Inc., Comptroller George Maragos said.

The audit nevertheless found a $1 million difference between payments made under the contract and amounts reported to the county Department of Public Works.

“I am disappointed in the lack of transparency by the County Department of Emergency Management that would not allow the auditors to review important documents that should be in the public domain,” Maragos, a Democratic candidate for county executive, said in a statement.

The county first awarded Island Park-based VIP Splash a $4 million contract in 2013 — five months after the company was formed — to remove debris from South Shore waters after Superstorm Sandy.

The county Legislature approved another $8 million for the pact in 2014 and $386,000 more last year. The Federal Emergency Management Agency has reimbursed Nassau for nearly all the work, officials said.

Federal and local authorities are investigating links between the VIP Splash contract and the firm’s donations to a political club run by Rob Walker, the chief deputy for Republican County Executive Edward Mangano, Newsday has reported.

Maragos’ office has given the audit to County Attorney Carnell Foskey and District Attorney Madeline Singas for their review.

The two three firms that made bids for the contract had 25 to 35 years of experience in the field, Maragos said.

The Office of Emergency Management, which awarded the contract, declined to give auditors their request for proposals, all four firms’ submitted bids and evaluations of each bid, Maragos’ audit says.

That left auditors unable to determine whether the office followed county procurement rules or independently “evaluate the rankings and qualifications” of each bidder, the audit says.

Some of the project’s 11 subcontractors ignored auditors’ requests for information, Maragos said. Lawyers for one, Operation Splash, barred employees from communicating with auditors, he said.

Auditors also could not examine certain documents because they had already been given to federal and local prosecutors, Maragos said.

Craig Craft, the emergency management office’s director, said the office “cooperated with every agency including the Nassau Comptroller’s Office.” State and federal agencies monitored and audited the VIP Splash contract, he said.

Sadly, this is a pathetic attempt to obtain publicity by a candidate for the Democratic nomination for County Executive,” Craft said in a statement.

VIP Splash reported to the county Department of Public Works, which oversaw the project, that its 11 subcontractors were paid nearly $1.2 million less than those firms actually received, the audit found. VIP Splash’s final claim vouchers narrowed the discrepancy to about $500,000.

Neither VIP Splash nor the county caught the reporting errors, the audit says.

Additionally, the project’s minority- and women-owned business participation rate was only 8.62 percent, far below the state’s 30 percent goal, the audit says. VIP Splash and its subcontractors also failed to provide enough records to determine whether they paid workers the county’s living wage.

Public works officials disputed some of the audit’s findings. The Department of Public Works said in a statement that it has noted the audit’s recommendations and stressed the project’s federal and state oversight.

“This Sandy response contract successfully removed tons of dangerous debris and vessels from Nassau County waterways, making it safer for boaters, marine life and the environment,” Brian Schneider, an assistant to the deputy public works commissioner, said in the statement.

Francis J. Murray, an attorney for VIP Splash, wrote in response to the audit that the company “has no comment on inter-agency matters within Nassau County government.”

But he said it made best efforts to encourage minority- and women-owned business participation. The two subcontractors that didn’t provide proof of paying living wages represented a “very small fraction” of the services provided, Murray said.

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