A December letter from the Village of Saddle Rock’s auditing firm identified “significant deficiencies” in the village’s financial controls, months after the auditors approved the village’s financial statement for the 2012 fiscal year.
The letter, obtained by the Great Neck News in a Freedom of Information Law Request to the village, raised concerns about the village’s bookkeeping and monitoring of its expenditures. Those concerns were beyond the scope of an audit released in October, wrote the firm, but led auditors to a “communication of significant deficiencies and material weaknesses” to the board on Dec. 18.
“We identified certain deficiencies in internal control that we consider to be material weaknesses and other deficiencies we consider to be significant deficiencies,” wrote the auditors.
The concerns, which included having only one person sign village checks in violation of village policy and missing invoices during the auditor’s initial financial inquiries, were not made public. The auditors wrote that the letter was solely intended for internal village use.
Village of Saddle Rock Mayor Dan Levy and trustees David Schwartz and Avery Modlin did not return requests for comment. Village Attorney James Murphy could not be reached for comment prior to publication.
The December letter was not the first time the village’s auditing firm, Satty, Levine & Ciacco, had expressed concern over Saddle Rock’s financial practices. A July 16 letter to the village, sent while the firm was putting together its audit, raised issues including missing invoices, questionable charges on the village gas card, an unaccounted for purchase of a laptop and checks to a contractor personally cashed by Levy.
Levy, an opthamologist who succeeded long-time mayor Leonard Samansky after Samansky’s death in 2011, cashed checks written out to Next Capital Corp., a contractor that was paid $22,200 for maintenance work and other jobs, according to the July letter.
Next Capital is a Queens-based company run by Yaniv Erez, who identified himself as a “close friend” of Levy’s in an interview with the Great Neck News, and one of the firm’s employees who did work for the village was Levy’s daughter.
Village Attorney James Murphy said in an interview last week that the completed audit, released in October, addressed the issues raised in the July letter.
“The village stands by the audit that was conducted and finalized,” said Murphy. “At the end of the day the audit was completed, and these issues were all addressed.”
The village did send supporting documents, including affidavits, to address the auditors’ concerns, according to the Dec. 18 letter.
Invoices from Next Capital were also obtained in the Freedom of Information Law request. They describe maintenance, repair and clerical work dating from March through early July 2012.
But the authenticity and dates of the Next Capital invoices provided to auditors after the July letter was disputed under oath by former Village Clerk Treasurer Donna Perone.
Perone, who testified earlier this month at the trial of Saddle Rock resident Sasha Masri on assault charges related to a fight between Masri and Levy at an October village board meeting, said at the trial that Levy instructed her to create the invoices after receiving the July 16 letter from the auditors.
“I was given instructions to create them by the mayor,” Perone said on the stand.
Assistant District Attorney Christine Geier, who cast doubt on Perone’s credibility at the trial, questioned her testimony about the invoices during cross examination.
“So even though you believed these to be not accurate, you submitted them to the accountants?” Geier asked.
“Yes,” replied Perone.
A judge later found Marsi guilty of a misdemeanor assault charge against Levy. Marsi had originally been charged with felony assault.
The December letter from Satty, Levine & Ciacco did not question the authenticity of the invoices, but did indicate that, months after the firm approved the village’s 2012 financial statement, it still held concerns about the village’s financial controls.
“The Village’s existing procedures at times place one person in the position of initiating purchases, approving them for payment, and signing checks. The overlapping of these responsibilities increases the risk that fraud or error could occur and go undetected,” wrote the auditors.
The firm recommended that the village tighten its financial policies.
“The Village should adopt a strict procurement policy and communicate these expectations” to employees and vendors, wrote the auditors.
How the village responded to the letter is unknown, as requests for comment were not returned prior to publication.
