Southold Justice Court Audit Talk Sparks Contention

NORTH FORK, NY - A discussion on an audit of Southold Town's justice court sparked heated discussion among the town board Tuesday morning.

The audit followed the conviction of former senior justice court clerk Christine Stulsky — Stulsky pleaded guilty in January 2015 to stealing $230,000 in fines, bail money and other monies from Southold Town. She was mandated to pay back the stolen funds, according to Suffolk County District Attorney Thomas Spota. Stulsky had worked for Southold Town since 1980 and was arrested in March, 2014; a district attorney said she had stolen the funding to buy cigarettes, pet food and groceries.

The audit followed the arrest, and was focused on examining the town's bail account; Justice William Price has said that those expecting their bail money back were left waiting for long periods of time while the investigation commenced.

Meanwhile, the town hired a new justice court director, Leanne Reilly; she and Price have been working for months to go through years of records and receipts.

On Tuesday, Robert Posner, partner in the Albrecht, Viggiano, Zureck & Company P.C. public accounting firm, came before the Southold Town board to discuss results of the external audit.

Posner said the audit showed "discrepancies," including a discrepancy of $24,000 in bail receipts over three years, Posner said.

Stulsky, Posner said, "was not supposed to have access to that account."

In addition, he added, Stulsky had promised the board and justices that she was addressing issues. "The crime here is that Christine Stulsky defrauded the justices and the board. She assured the board at meetings with the justices that she was taking care of these problems — so she defrauded the justices, too," Posner said.

Posner said "internal control deficiencies" were identified. "It's the justice's responsibility to make sure their employees were doing the right thing. In this case, repeat findings were never addressed."

Russell agreed that even previous to the "blowup", there had been findings; an audit is filed annually, he said. The supervisor reminded that both the fines and forfeitures are "heavily regulated" as well. Posner said neither Justices Price nor former Town Justice Rudy Bruer had any discrepancies in either account.

Sparks ignited when Councilman Jim Dinizio said he felt an outside forensic audit should continue, to determine exact numbers, which are not yet available.

The board discussed whether to pursue the audit any further would be cost effective and whether it would ultimately yield any more information than what had already been gleaned.

Reilly could potentially hire an independent person to assist with the "tremendous" amount of work, a move that would prove costly, to determine if cash was missing or just still to be located in other files, Posner said.

Reilly was hired after Stulsky's arrest.

Price, Russell said, "has been very assertive in getting involved with records, going over them with a fine-toothed comb. He and Leanne have been working together to make sure it's all done, brought to light, and improved."

"I don't think that's enough, Scott," Dinizio fired back. "It's how it looks to people. They come to court and they understand that they are going to be paid back their money; we should be able to give it back."

The same people performing the audits, he said, "are the same people who were involved in this. Maybe not Leanne, but the justice court. And this is basically monitoring themselves."

Dinizio said he believes hiring a forensic accountant might be in order. "We have to pay the price for what went on and make sure those numbers are correct."

He added that he'd like to see the numbers mentioned in Tuesday's preliminary report verified. "The only way is someone from the outside."

The supervisor, however, said a forensive audit of the bail account is exactly what's been undertaken already.

"Leanne has a job to do and it's not as a forensic accountant," Dinizio said. He added that he doesn't believe the audit should be "cut off in the middle."

"Nobody's cutting this off in the middle," Russell said. What needs doing, he said, is a "monotonous" review of files going back years; a review of those files is one of the exact tasks Reilly was assigned and why she was hired, he said.

"We hired her to run a justice court," Dinizio said.

"Part of the justice court is to review" those files, Russell said. He suggested Dinizio prepare a bid spec of what he expectants the forensic accountant to do and submit it to the town board.

Dinizio said he's not a accountant or a lawyer, he installs alarm systems, but said he believes the forensic accountant is needed, as per the report he'd heard Tuesday morning.

Councilwoman Jill Doherty said the files needed to be organized before a forensic accountant could even step in, and that's what Reilly has been working on.

"No other justice court has to do this, go back in records year after year, to justify what has been done," Dinizio said. "I would like to get to the bottom of it."

Councilman Bob Ghosio said while he agreed to a certain extent, he'd wasn't sure the town needed to spend a substantial amount of money on a forensic accountant to find out the "bottom line number" when the basic conclusions have been reached and all that's still to be determined is that exact number.

Russell said he'd like to clarify that the work has not stopped; it is still ongoing. As work continues, Reilly can still submit records to Posner for auditing, he said.

Doherty agreed clerks could still do the the labor and AVZ could still oversee what they were doing.

After the discussion, Russell said AVZ was essentially performing a forensic audit. "Ordinarily , the accountant can only audit records that have been assembled. That is essentially what Leanne and the staff are doing. The auditor can't audit records that don't exist yet. That's why its taken so long."

He added that Dinizio "seemed to disparage the staff there by suggesting that he's uncomfortable with the staff working on their own records. I'm discouraged by that comment and don't know what he's implying."

And, Russell said, the staff has "stepped up to help us to correct a process put into place by their own boss, who obviously didn't have good intentions."