Comptroller notes conflict of interest in Grand Gorge

Apr. 16—A recent audit by the Office of New York State Comptroller Thomas DiNapoli found that a member of the Grand Gorge Board of Fire Commissioners had a prohibited conflict of interest between the fire district and his snow-plowing business.

The commissioner, who was not identified by name in the report, owns a local automotive service business that this district hires for snow plowing and repairs. During the 18-month audit period, from Jan. 1, 2019, to June 30, 2020, state examiners found that the district paid the company for seven invoices totaling $1,878.

For the purposes of New York General Municipal Law, each invoice submitted for services or repair work constitutes an agreement and a contract.

"As the sole owner of the business, the Commissioner has an interest in each of the contracts because the Commissioner received a direct or indirect pecuniary (monetary) or material benefit as a result of the contracts," the April 1 report read. "As a member of the Board, the Commissioner also has one or more of the powers and duties that can give rise to a prohibited interest, including the ability to authorize or approve contracts, authorize or approve payments under contracts, audit bills or claims under the contracts or appoint someone to perform that function."

"Although our testing did not reveal any irregularities in pricing, when officials, in their private capacities, conduct business with the municipality for which they serve, the public may question the appropriateness of these transactions," the report read. "Such transactions may create an actual conflict of interest or, at a minimum, the appearance of impropriety."

Grand Gorge Fire District Chairman Thomas Miner declined to identify the commissioner in question or the name of his business, telling The Daily Star that as head of the board, he was "not at liberty" to disclose any information outside the audit report.

Miner attributed the previous invoices found by the state to exceed the allotted $750 threshold to the heavy amount of snowfall in recent years and the increased demand for plowing services.

Miner said the board and the commissioner agreed to continue doing business as long as the annual cost remains under the $750 limit imposed by General Municipal Law as an exception to otherwise-prohibited conflicts of interest.

The board is limited in its options for contracting such services because the fire district requires a minimum level of insurance coverage for work involving the firehouse, Miner said, "and to my knowledge, he's the only one in the whole district that we know of with the right amount of insurance."

The audit also found that the board did not audit or approve four months' worth of claims before payment was made by the board treasurer.

A review of 227 payments totaling $300,580 made during the 18-month audit period found that payments were supported by detailed receipts and made for proper district purposes, according to the report. However, the treasurer paid 35 claims totaling $98,096, which were not part of the district's prepayment resolution — allowable in some circumstances under New York Town Law — prior to the board's audit and approval.

"When the board allows payments to be made prior to the audit of claims, there is an increased risk that payments may not be for the agreed-upon products and services or may be for improper purposes," the report read.

Fire district officials reported that no financial abstracts were created in August and September 2019 and April and May 2020 because no meetings were held, at first because of a lack of quorum and later because of the coronavirus pandemic, according to board treasurer Gail Miner, Thomas' wife.

Gail Miner said the claims were verbally presented because bond payments had to be made in a timely manner.

The board allowed payments to be made during this time so that district operations could continue, and told state examiners that the associated claims were audited and approved by the board at the next meeting, the report read. "However, district officials were unable to provide us with any evidence that the board audited the claims at the next board meeting."

In a March 9 response to the Comptroller's Office, Thomas Miner wrote that the board created and unanimously adopted a code of ethics at its January organizational meeting. Miner also pledged that the board will approve all financial claims before they are made, and in the event of a meeting cancellation or reschedule, the treasurer will still obtain authorization via signature to pay the claims.

Thomas Miner said the board agreed with the audit findings and that he was pleased with the audit process overall.

Sarah Eames, staff writer, can be reached at seames@thedailystar.com or 607-441-7213. Follow her @DS_SarahE on Twitter.