INSPECTOR GENERAL FINDS INDUSTRIAL DEVELOPMENT AGENCY OUT OF COMPLIANCE

July 18, 2008;

MOUNT VERNON , NY - The City of Mount Vernon’s Office of Inspector General has released a report indicating the Industrial Development Agency is not in compliance with New York State law, seriously lacks internal controls and is fertile ground for fraud waste and abuse. The report falls short of making any accusations of actual fraud but, recommends an immediate detailed independent operational and financial audit of the Agency.

Contrary to State law and the express rules of the New York State Comptroller, the Agency has failed to make annual reports to the City Council and has failed to implement an effective tracking system for the administration of its PILOT (payments in lieu of taxes) projects. The report further states that required supplemental schedules to the Agency’s annual report which is filed with the State fail to properly identify and describe the PILOT projects being administered by the Agency.

It was observed that the outside accounting firm which performs the Agency’s annual audit did not certify that it employed the legally mandated audit standards.

The Inspector General concluded that, based upon the sworn testimony of Agency officers and an inspection of the Exhibits produced to City Council, it is impossible to determine exactly how many PILOTs are active and their status. Three different lists of projects were presented listing from 7 to 15 PILOTS and the lists were never reconciled during the hearings. Equally troubling was the apparent cavalier attitude of some of the Agency’s key officials. The Treasurer testified that she did not implement a tracking system because it wasn’t her job and she could Are members the necessary transactions without the need for a written tracking system. The Inspector General called this very troubling and until a full and complete independent audit is performed it cannot be determined whether the City has lost revenue as the result of the lax operation of the Agency.

The Inspector General was asked to review the official transcripts of public hearings which were conducted by the City Council in February of this year and to comment on the testimony and evidence submitted. The full report is available in .pdf format using the link below.