LTV Told To Tighten Its Grip on Finances, But Audit Turns Up No Wrongdoing

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By Stephen J. Kotz

Auditors hired to comb through the financial records of LTV, East Hampton Town’s public access television station, offered a slew of recommendations for ways the station could better manage its books, but stopped short of saying they had found any intentional malfeasance in a presentation to the East Hampton Town Board on Tuesday.Unknown

“We did not identify any misappropriation of funds,” said Darin Iacobelli, a partner in Nawrocki Smith, a Melville CPA firm, which conducted the audit. “We did identify numerous internal control deficiencies.”

Nonetheless, Mr. Iacobelli said the auditors had met in December with representatives of the Suffolk County District Attorney’s office to discuss their findings.

The town ordered the audit of LTV, which receives the lion’s share of its funding from the town and East Hampton Village, last year after a major shakeup in the LTV board amid charges of financial improprieties. The town provides LTV with approximately $637,000 per year, with those funds coming from Cablevision, which pays a franchise fee to operate in the town. Long-time LTV executive director Seth Redlus resigned under pressure in March 2015, and last summer LTV board chairman Robert Strada and three others were ousted from the board.

Mr. Iacobelli and another representative of the firm, Dimitris Bantileskas, went through a laundry list of findings ranging from the lack of sufficient oversight of credit card use, failure to reconcile bank statements in a timely manner, improper recordkeeping for equipment purchases, lack of oversight of payroll and vacation time, and insufficient tracking of reimbursements for expenses.

Although LTV officials tried to put on a good face on Tuesday by issuing a press release, announcing it had been cleared of any wrongdoing and telling the town board they had learned valuable lessons from the experience, Supervisor Larry Cantwell held their feet to the fire and insisted they produce a report within 60 days outlining the specific steps they would take to respond to the recommendations contained in the audit.

“The truth is there has been a serious lack of internal controls at LTV and the oversight has been woefully inadequate on the part of the board,” Mr. Cantwell said.

The supervisor said besides the initial report, he wanted LTV to present the town board with an update in September and again in October during budget season.

LTV’s new executive director Morgan Vaughn was alternately apologetic and defensive. She admitted LTV had made mistakes and had since replaced its bookkeeper and was taking strides to comply with the audit’s findings. But she also complained that despite regular emails to Nawrocki Smith, asking if the firm needed any additional information, she had heard nothing from them. She noted too that in at least one case, Mr. Redlus had obtained furnishings for one of the studios without going out to bid, but she said he had obtained them at cost and it was a sincere effort to hold the line on expenses.

At one point, she defended LTV for providing a lot of bang for the buck. “This is not money that is being squandered,” she said. “This is the general impression.”

“With all due respect, you have missed the point,” responded Mr. Cantwell. “This is not about the quality of the services. This is about the accounting of the funds you are processing.”

Jim Shelly, LTV’s new chairman, assured the board its message was being heard. “We are going to make this work,” he said. “We now recognize we have to perform to a much higher standard than most other organizations of our size given the source of our funding.”

Affordable Housing

The board also heard a report from assistant town attorney Beth Baldwin on a proposal to make changes to the town code to allow the conversion of detached accessory structures such as garages and pool houses into accessory apartments. The board agreed it was not yet ready schedule a hearing on the matter because it still has to sort out details, including the number of parking spaces and the minimum lot size required.

So far, the plan allows for 20 conversions in any one school district, with 15 limited to one-bedroom units and five two-bedroom units allowed. Another provision would allow a homeowner to live in the apartment and rent out the house on a year-round basis to a full-time resident.

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