Looking out for you and your tax dollars all day every day
By SHERRY HALBROOK
If you work hard for your paycheck, chances are you would like to know your tax dollars are well spent. And that’s where state Comptroller Thomas DiNapoli and his staff at the Office of the State Comptroller (OSC) come in.
PEF members and others in the OSC Office of State and Local Government Accountability work all day every day auditing the financial records of state agencies, local governments, and the private and not-for-profit organizations that receive your tax dollars under contracts or grants. And when they turn up troubling information, they refer it to the comptroller’s Division of Investigations for a closer look.
If the investigators find evidence of fraud or other illegalities, the comptroller contacts the appropriate law enforcement officials, which may include police, district attorneys, state attorney general or federal prosecutors. If federal tax dollars are involved, federal agencies also may become involved.
It starts with the auditors, mainly PEF members, and it can take years to bring justice in the courts and restitution of public funds. Rarely does it lead to a bit of applause for state employees on the front lines, but last year that happened.
The recognition came in response to an investigation and audit of Bilingual SEIT, a Flushing-based private contractor. The audit began in 2012, and led to convictions, forfeiture and restitution. Four years later, DiNapoli and the employees who worked on that case took their bows when the inspector general for the U.S. Department of Education recognized their outstanding efforts, from the initial audit and investigation that led to prosecution and criminal conviction, and their remarkable teamwork across divisions and with other agencies in the pursuit of protecting taxpayer money from fraud and abuse.
The PEF members who participated in that audit in 2012 were, Farhan Ahmad, David DiNatale, Joseph Gillooly, Sheila Jones, Stephen Lynch, Kenrick Sifontes, Huanan (Hugh) Zhang and Gaetana (Tania Zino). Sifontes, a former council leader of PEF Division 288 at the OSC, is now the director of audit, a management position. Lynch was promoted to state program examiner 4 (audit manager) and Ahmad has retired. Jones is a state program examiner 3 (audit supervisor), Gillooly, DiNatale and Zino are state program examiners 2 (examiners in charge) and Zhang is a state program examiner 1 (staff examiner).
“Fighting public corruption is a priority,” DiNapoli said last November 20 in announcing the federal recognition for his staff’s “outstanding efforts in the audit and investigation of a special education provider (Bilingual SEIT) whose director (Cheon Park) stole public funds at the expense of taxpayers and students. Thanks to their close cooperation with federal and state authorities, this criminal was federally convicted and required to pay approximately $2 million in restitution and $1.9 million in forfeiture.”
While the federal recognition was directed primarily at the investigators and managers, Assistant Comptroller for Investigations Stacy Marano (among those honored for her work on this investigation) and Sifontes were quick to point out that it’s a team effort that starts with auditors on the front lines.
“Auditors and investigators work together,” Marano said.
“PEF members are the boots on the ground,”Sifontes said. He added that it typically takes about six or seven months to conduct and complete an audit and the auditors spend most of that time in the field where they can observe first-hand, not just the financial records of the government agency, program or company being audited, but many other details, such as staffing, and services.
“The audit team is there every day and can pick up on a lot of things,” Marano said, “and that provides easy access to the documents that are there and the documents that should be there (but might not be).”
If an auditor asks to see documentation that services were provided or that staff actually worked the hours that were billed, and the agency or company delays and tries to evade providing them, that’s a red flag the auditors don’t miss. For instance, in the case of Bilingual SEIT, Sifontes said the auditors found Park’s sister-in-law was listed as an employee and the pay records listed two different Social Security numbers for her. When they began to question workers at Bilingual, no one recalled having seen her there working. The auditors also noticed that Bilingual bought and charged the city for “very high-end children’s furniture” that was much nicer than the furniture and equipment the auditors saw being used.
The auditors notified the OSC investigators about their concerns, and by the time the investigators finished they discovered Park falsely billed the NYC Education Department for $1.5 million of federal, state and city funds for services the company did not provide, and for services to many children that did not actually have the disabilities he claimed they had. Park was ultimately charged by U.S. Attorney Preet Bharara with receiving kickbacks and using the company’s money to pay for tutors for his own children and for someone to clean his home twice weekly. Park used some the millions of taxpayers’ dollars that he garnered to build a luxurious headquarters for the company and purchase a 5,000 square-foot home in Manhasset and a Mercedes for himself.
In 2014, Park admitted in court that he gave false information about the costs of services Bilingual provided from 2005 to 2013. He pled guilty to a single count of mail fraud and accepted a sentence of 51-63 months in prison. He also was ordered to pay $250,000 in fines.
The PEF members and OSC managers said they can see how their work is changing things for the better, and that is important for the people who receive services and for the taxpayers who pay for them. Changes began in 2013 when DiNapoli put an emphasis on auditing the private contractors who are paid with public funds to serve special-needs preschoolers. The auditors said they also see contractors generally are starting to do be more responsible in their operations and record keeping.
In November, the OSC reported that, overall, its audits and investigations had led to nearly 140 arrests and nearly $40 million in restitutions since 2011. That includes 10 arrests and the recovery of $9.3 million resulting from the special education audits.
And in 2015, the Center for Public Integrity gave the NYSOSC the top score in the country for its auditing practices.
“The hidden faces behind these audits are PEF members,” Sifontes said. “We know we do good work, and it’s gratifying to see it recognized, and to see it changing how the organizations we audit do their work.”
THeCOMMUNICATOR – March 2017 Contents – PDF