Oceanside sanitation district trashed in 94-page county audit

Nassau County's comptroller completed a lengthy audit of the Oceanside sanitation district and determined disorganization led to myriad issues, including improper budgets, six-figure deficits and procurements at odds with state law.

The district, established in 1931, provides waste collection services to 13,000 households and 950 businesses in Oceanside and parts of Baldwin and East Rockaway. The four-part, 94-page audit, completed in March, examined the district’s finances and policies from 2018 to 2021.

It found the district failed to adopt “structurally balanced” budgets and didn’t adequately monitor spending, leading to years of deficits. 

Auditors also determined the district had been in “noncompliance with general municipal law” by not always seeking competitive contract bids as legally required.

A comptroller’s spokeswoman didn’t immediately respond to a Newsday inquiry Tuesday about whether her office would refer any findings to law enforcement officials.

Auditors also found the district: 

• Let unauthorized employees make purchases
• Didn’t comply with IRS requirements, leading to a potential underreporting of $93,542 on 1099 forms 
• Allowed unauthorized employees to deposit property tax revenue checks of $4.3 million to $4.5 million 
• Allowed ineligible former employees to receive benefits 

The district’s five-member commission requested the audit. Commissioners are elected in staggered five-year terms and make $7,500 annually. The commissioners agreed with audit findings and vowed to improve, according to a letter district Chairman John Mannone sent the comptroller's office.

“For far too long the District was run by a group of people who ran the District without regard for the taxpayers’ concerns and the concerns of the employees of the District,” his letter said in part.

Mannone said in a statement provided to Newsday on Tuesday that the comptroller's office provided a "road map" for the district to improve that includes "insightful guidance to finally tackle the hard policy changes that have evaded us." 

Financial management

Most of the district’s operating revenue comes from property taxes. Auditors found the district overspent its revenue in 2019, 2020 and 2021.

In 2020, the district spent about $9.9 million but only gained about $9.1 million in revenue, leading to a $769,779 operating deficit. The district used its fund balance to close the gap, which auditors said may indicate the fund was oversized and the tax levy was excessive. 

Auditors also found the district didn't accurately calculate its final budgets. The district in 2019 reported its final budget as about $10 million, but auditors discovered it was around $9.17 million — an $878,360 difference. 

The district also “inappropriately spent” $1,061 in 2018 and $737 in 2019 on meals, food and beverages for holiday parties, the audit said. 

Procurement and bidding 

Auditors said the district’s procurement policies were disorderly. Documents weren’t time-stamped, contract documents weren’t properly maintained and besides not always seeking competitive bids, in one case officials awarded a contract to a higher bidder instead of the lowest bidder.

Auditors found no evidence the district's information technology consultant followed procurement criteria and said that consultant also did work for the then-chair’s law firm. The audit didn’t name the consultant or chair. 

Hiring and personnel 

The hiring process was disorganized, with no records tracking it, auditors found. Part-time sanitation workers were hired arbitrarily, with someone in the district randomly pulling an application from a folder and offering that person a job, the audit said. Only part-time sanitation workers were considered for full-time roles. 

Additionally, auditors determined employees didn’t receive proper policy training — including some without anti-sexual harassment training.

They also found the health benefits administrator didn’t understand how to determine who received benefits, struggled to add or delete enrollees and didn't know how to maintain retiree and spouse coverage.

By Brinley Hineman

brinley.hineman@newsday.com

Brinley Hineman covers the Town of Hempstead and the City of Long Beach for Newsday. She previously was a reporter in Nashville, Tennessee, and is a West Virginia native.