Audit faults Suffolk County system that disburses opioid settlement fund

Suffolk County’s system for selecting, awarding and disbursing money from the state’s opioid settlement fund has been beset by delays, a faulty selection process, poor documentation and lack of public participation, according to an audit released by the Suffolk comptroller Tuesday.

Lack of meeting records and approval of big-dollar awards without public participation "question the integrity and validity of the whole process," Comptroller John Kennedy said in an interview Tuesday. He said he also was surprised at the size of some of the awards and their potential uses.

In addition, the 31-page report, which covered midyear 2021 to midyear 2024, noted that two former top county officials were hired as executives by not-for-profits that were awarded "significant opioid settlement funds." But the comptroller found that "no current county ethics rules were violated by their employment" and neither has been accused of wrongdoing.

Kennedy recommended strengthening the county ethics law to bar employees from taking jobs at firms that have dealings with the county and were "directly concerned with or personally participated" in the dealings.

Newsday in 2023 reported that former Suffolk Executive Steve Bellone took a top post at Northwell, which was awarded $3.5 million in funds, the audit found. Ryan Attard, his former chief of staff, went to a firm that was awarded $2.55 million (Attard has since left the Family & Children’s Association, Newsday reported.). Both said their hirings occurred after they’d left the county and were unrelated to any award disbursements.

Separately, Kennedy’s audit took issue with a county practice that essentially excluded county government entities from receiving money from the settlement fund, and said he agrees with changing that restriction in the next round of awards. "Some opioid funding should be utilized to augment current services being provided by the county in future awards," the report said.

The comptroller’s audit released Tuesday found the county’s Opioid Settlement Funding Selection Committee, formed in 2021 to disburse more than $104 million in total funds coming the county’s way, "did not hold any meetings that were open to the public" and did not prepare minutes of past meetings. Newsday also reported there were no records of votes by committee members for specific fund awards.

The county began announcing awards from the opioid settlement on Feb. 1, 2023, when it gave $36 million to 43 recipients over a three-year period. In December, 2023, it announced another $21.5 million to 33 organizations.

The audit found the selection committee used a faulty system to grade potential awardees, noting that 22 of the 50 proposals that did not win awards in the first round appeared to meet "all selection criteria for a contract award." In the second round, 10 of 30 also appeared to meet the criteria but were rejected.

The comptroller recommended the creation of a "quantifiable scoring system" for use in future awards, one similar to that used for county requests for proposals, and said applicants should be made to provide more detailed financial information related to the qualifications and assertions on applications.

The comptroller’s auditors were unable to find documents to support recipients’ claims for receiving funds, the report notes. Fifteen of 37 awarded contracts were flagged as needing "significant additional information."

The audit also found that the county took a long time to disburse money after selecting awardees. Only 28 of 43 grant recipients from the first round of awards had a fully executed contract in place as of June 30, 2024, and none of the 33 recipients from the second round did as of that date. (Since November, however, a total of 25 more contracts have been executed, though 20 more remain unexecuted.)

The comptroller cited lingering impacts from the 2022 ransomware attack on Suffolk County and lack of experience with county contract reimbursements by awardees in noting that only around $3.03 million had been disbursed in the 17 months since money was appropriated by the county legislature. Since November, however, the figure has risen to $5.15 million.

Kennedy urged county agencies to look for ways to streamline the payment process, particularly because it’s expected to become "more challenging" as claims increase. He suggested hiring more open positions to help with the work.

County Executive Ed Romaine has proposed a series of reforms to help restore efficiency and transparency to the fund’s processes, Newsday has reported. Some will require legislative action.

"We are going to have a different system," Romaine told Newsday last year. "If anything, the past has been instructive because it tells us what we should do and maybe what we should not do."

Bellone didn’t immediately respond to a request for comment.

One observer said there’s considerable work to do.

"Ethics is last thing on my list of how this [process has been] a total and complete failure," said Paul Sabatino II, former counsel to the Suffolk Legislature and an expert in municipal law. There was "no logic to what they did."

He cited the lack of published criteria for how funds should be awarded and "no votes, no minutes" from meetings. He also said the process appeared to operate in violation of the state’s open meeting law.

Suffolk isn’t alone in being slow to disburse opioid funding.

As Newsday reported in December, of the total $213.5 million awarded to Nassau and Suffolk from opioid settlement funds, $97.2 million in grants had been announced but only $8.1 million had been paid out among the two counties.

Newsday reported Nassau disbursed just over $3 million to 14 vendors, while guaranteeing some $12.7 million to another 18 vendors.