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State Audit: Town Officials Violated Municipal Laws

State alleges town mismanaged $28 million worth of fund transfers between 2008 and 2011.

Babylon Town Hall. Credit: Patch file photo.
Babylon Town Hall. Credit: Patch file photo.
A state audit released by the New York State comptroller's office states Babylon Town officials violated municipal law with loans totaling over $28 million that were used to purchase property in Wyandanch for revitalization.

The audit released by Comptroller Thomas DiNapoli's office states the residential garbage district fund made 17 cash advances between 2008 and 2011 totaling $28 million, none of which were authorized by the Town Board.

In addition, the audit states that none of the 17 advances were paid by the end of each fiscal year nor was no interest paid as required by law.

"The Board has not taken appropriate actions to maintain the general fund’s sound financial condition," auditors wrote.

While interfund transfers are common in town and village governments during the fiscal year, auditors noted the board broke municipal law when the transfers were not repaid by the end of each year, including interest that should have been owed.

Town Supervisor Rich Schaffer disagreed with the auditors' report, noting the the board did not authorize each transfer individually but rather did so in each town budget and capital plan each year.

In addition, Schaffer noted in an attached response on the report that the town had repaid the loans from the funds with interest. He also added the town had excellent credit ratings from Moody's and Standard & Poor's.

The audit gives the town 90 days to file "corrective action plans" with the state outlining any changes they plan to make.

In the statement along with the report, Schaffer stated the town officials "look forward to discussing these comments with you and to preparing the Town's Corrective Action Plan."

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