Town Shelter In Danger Of Misspending Funds, Audit Finds

An audit released today by Nassau County Comptroller Jack Schnirman revealed that the Town of Hempstead Animal Shelter operated its "Tails of Hope" program without transparency and was in danger of misspending the funds that people donated for animal care.

The audit was begun by the county's previous comptroller, George Maragos, and was delayed due to a lawsuit from the town trying to stop the audit. Maragos wanted to look at the performance of the shelter and how animals were treated, which a judge ruled were outside his purview as comptroller. In 2018, the audit was restarted after Supervisor Laura Gillen requested the audit continue, but it focused only on the financials of the shelter.

Schnirman's office wrote in the audit that work was impeded by the town, which did not allow auditors to examine personnel records or an organizational chart of the shelter. The auditors said this meant they couldn't determine the qualifications of personnel or if the shelter had adequate staffing levels and supervision. Auditors also were not allowed at the shelter without an appointment, and were supervised during their work by a communications employee from the town comptroller's office.

Despite the limitations, the auditors found problems with the town's Tail of Hope Program, which collects donations to supplement services at the shelter. The audit found that donations made to Tail of Hope are not kept in their own bank account, but are instead kept in an account with many other funds, including PILOT payments, payroll tax deductions and more. The report says this "creates an environment where Tails of Hope Program funds could be diverted to other programs."

The audit also found that there was no financial reporting for the Tail of Hope funds, and that expenditures of the funds are not subject to the procedures as other spending in the town. There is no bidding process before funds are spent, and most of the funds are spent with people who do not have contracts with the shelter.

The majority of the shelter's annual budget -- usually 80 percent or more -- is spent on personnel, the audit found. The system used for tracking overtime is also susceptible to fraud, according to the audit. The shelter uses electronic systems to track employee hours, but a paper system to mark overtime. The paper system didn't always line up with what the electronic system said employees worked, the audit found. The system was at risk for error that could lead to over-payment.

The audit suggested that the town should undertake its own, much more complete, audit of the animal shelter, which should include the treatment of animals. The audit attached a list of 56 complaints received, dating back to 2016, that it suggested the town take into account and investigate.

"I am pleased to report that many of the comptroller’s recommendations, such as the need for greater restraints over spending, have already been embraced and implemented during my new administration," said Town Supervisor Laura Gillen. "The audit also echoes my concerns about the Town’s antiquated record keeping system, which is why my administration has aggressively moved to replace paper files, which have dominated Hempstead for centuries, with digital files. For the first time ever, we have moved all of the Town’s financial information online for everyone to view, as well as implemented a new digital financial and payroll records system so that information is properly maintained. A broader audit would have been preferable, but a state Supreme Court decision limited the review to only financial records, and we complied with that decision."

You can read the full audit yourself by clicking here.