Auditor: Plainview Water District was 'run like a bad family business'

The Plainview Water District did not follow state law when making purchases, had inadequate controls over time off granted to employees and approved more than $25,000 in travel and conference expenses that were either not valid or properly documented, according to an audit released Wednesday by the Nassau County Comptroller’s Office.

The district, at a time it instituted a 75-percent rate increase, had poor budgeting practices that led to high fund balances. In addition, it paid commissioners per-diem stipends of $100, which is double that of similar districts, the audit found.

In addition, no nepotism policies were in place and — during the period of the audit, 2015 and 2016 — 40 percent of employees were family members of current or former water commissioners, which are elected positions.

“The Plainview Water District was a case study in mismanagement run like a bad family business and not as a public utility,” Comptroller George Maragos said in a news release. “Everywhere the auditors looked they found fiscal, administrative and control deficiencies.”

The district, which had fewer than 30 employees at the time of the audit, serves 34,000 people in all of Plainview and parts of Old Bethpage and Syosset.

Water Commissioner Amanda Field, who was elected in December 2016, said the district has taken the audit seriously and brought on a business clerk with finance experience, hired a new superintendent, revised time-off policies and implemented a no-nepotism policy.

“We knew we had to have a change in structure at the district,” she said, calling the audit a “starting point for us to really go and look and start making some changes.”

Maragos, in an interview, said the district exhibited “pervasive mismanagement” and he was happy a new superintendent and business manager had been hired.

“Some of the issues are so ingrained it’s going to be very difficult and it’s certainly going to take some time,” he said, though.

In reviewing $44,374 in travel costs, the comptroller’s office said it found 25 payments totaling $25,270 that showed a lack of controls to ensure the spending was appropriate. It cited $200 for late hotel check-out fees, $63.60 for cab fare despite an employee having a rental car and meals that were charged from a location as far as two hours away from a conference site.

District officials on Wednesday described overbilling of customers as a paperwork failing. Bills that overstated water consumption were corrected in terms of the fee but not usage, so the water use appeared to remain high in records. “No one is being charged for water they didn’t use,” Field said.

Field also said the commissioners are active and spend a lot of time working district issues, justifying the pay they receive. “We’re here and we’re active in the district.”

Over the past year nearly 15 percent of customers have reported pinhole leaks causing thousands of dollars in damage, prompting the district to boost alkalinity levels in hopes of halting corrosion. The district is also focusing on emerging contaminants and infrastructure improvements.