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Mar 13, 2013 9:50 AMPublication: The Southampton Press

Attorney Accuses Westhampton Beach Village Trustees Of Altering Audit

Mar 13, 2013 1:12 PM

The outside attorney hired to oversee an audit of Westhampton Beach Village finances insinuated that the trustees who hired him somehow manipulated the final report that was completed earlier in the week—so that it more positively reflected village finances—before storming out of last Thursday night’s Village Board meeting.

Scott B. Augustine of Bellport, who was hired by a divided board in the fall to review all of the municipality’s finances after a payroll error was uncovered, stated that his copy of a detailed 300-page report from Satty, Levine & Ciacco, the village’s auditing firm, had been altered and that two copies of the final report are now in circulation. He told trustees that the document in his possession, which he received on March 1 and reviewed last week, has fewer pages than the one given to them last Wednesday, the day before the board meeting.

Mr. Augustine—who appeared agitated during his 10 minutes at the podium, and grabbed his coat and left the meeting after a tense exchange with Mayor Conrad Teller at the end of his remarks—went as far as accusing the mayor and trustees of contacting the Jericho-based auditing firm and having the report changed. He did not offer specific details of what had been added or removed from the document.

“I would like to know if somebody contacted [John] Lundy and asked the report to be altered between the date that I received it and the date you received it,” said Mr. Augustine, referring to the CPA with Satty, Levine & Ciacco who oversaw the report. He noted that his copy of the report was dated February 17; the version received by trustees was dated Tuesday, March 5.

The suggestion angered Mr. Teller, who stated that the final report shared with trustees was the same one that arrived at Village Hall at 9:35 a.m. on Wednesday, March 6, and that if there is an issue, it was Mr. Augustine’s fault. Mr. Teller, who has made it clear that he never wanted to hire Mr. Augustine in the first place, also said he called the auditing firm over the weekend, before the final report was sent to the village, to ask if auditors had found any red flags.

“I talked to Mr. Lundy [over] the weekend,” said Mr. Teller, who was yelling at Mr. Augustine at one point during last week’s meeting. “I don’t ask him a damn question on their audit other than is there a red flag or not.”

Mr. Augustine’s comments also angered Richard Haefeli, the village attorney, who stated that he was violating the municipality’s attorney-client privilege by making such comments during a public meeting. Mr. Haefeli said that the attorney’s concerns should have been brought up in executive session when all parties, including Mr. Lundy, are present.

“This is something that should have been discussed with the board in an attorney-client relationship and not in front of the audience that is here,” he said. “Then it could have been cleared up. The village could have found out what the issues are.

“But you are not supposed to be discussing these sorts of issues in front of the board and in front of the audience,” Mr. Haefeli continued. “You are an attorney.”

Mr. Lundy, who did not attend last week’s meeting because he was in the hospital, could not be reached for comment this week.

On Friday, Mr. Teller said the only document in his possession dated March 5 is the three-page cover letter that’s signed by Mr. Lundy and accompanies the report. The mayor would not specify what the cover letter states. He speculated that the document might not have been included with Mr. Augustine’s copy. Mr. Teller added that there was a letter from Mr. Augustine also attached in the packet and dated March 1.

When reached on Friday, Mr. Augustine said he regretted his actions the night before, stating that he did not mean to accuse the trustees of misconduct. He said his intention was to alert the board of a possible discrepancy.

“I did not handle that as well as I should have,” he said on Friday, regarding his prior behavior. “That was not my intention and I could have handled it a lot better.”

Mr. Augustine refused to say what had been added to the version of the report received by trustees, but noted that he was alerted to the discrepancy by members of the board that he would not identify.

According to Mr. Augustine, he first received his report, which was dated February 17, on Friday, March 1. At the time, he was told the trustees would have the report for review by that Monday, March 4. They did not receive the document until March 6.

At that time, Mr. Augustine said that at least two trustees contacted him to ask why the report is now dated March 5. At that point, he had one of the trustees fax him the first five pages of the report so he could compare them. It is then, he said, that he realized that the report had been altered.

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Three problems. 1. Why did the Mayor contact the auditing firm over the weekend to see if there were any "red flags"? Especially if he did not want the report in the first place. I would think by not wanting it he was confident in there being nothing found. 2. The Mayors statement "the Village finances was in good standing" is not correct as Tucker found he was approving monies- to people that were not due. Luckily the Mayor got the money back AFTER the error was found. and 3. What is in that Police ...more
By realistic (472), westhampton on Mar 13, 13 3:28 PM
Maybe the Special Grand Jury investigating the SHT PD and Town Board will expand its scope?
By PBR (4956), Southampton on Mar 13, 13 5:08 PM
Will probably all be swept under the rug. Business as usual.
By dnice (2346), Hampton Bays on Mar 13, 13 10:48 PM
1 member liked this comment
Looks like they ARE records that should be disclosed -- it fits the category of an external audit.

While somewhat convoluted, the statute below says the Village does not have to disclose stuff the agency has not finished, except external audits....

NY Public Officer’s Law § 87 (2012)

2. Each agency shall, in accordance with its published rules, make available for public inspection and copying ...more
By Publius (358), Westhampton Beach on Mar 13, 13 6:06 PM
Seems all Mickey Mouse to me but when I publish something (and I often do publish reports and spreadsheets) I use a system such as Sample v1, sample v2, Sample Final etc. Oh and anything that is "Final" is sent as a PDF which you have to work at to alter!

Also a simple password on a document also secures the data
By Hambone (514), New York on Mar 13, 13 6:14 PM
1 member liked this comment
FYI, with the right tools you can easily modify PDFs and open password protected files
By Moneybogue (37), Westhampton Beach on Mar 14, 13 12:08 PM
Well put. When I've been in audits, stakeholders receive a draft copy to review and offer corrections, as well suggestions as to tone and nuance. There are often multiple iterations. Both the auditors and stakeholders benefit from this, as an audit ultimately produces lessons learned, not smoking guns. The article suggests to me that the Board did not receive a draft copy.
By Speonk Shores (31), Remsenburg on Mar 15, 13 11:18 AM
I agree with both Publius and Hambone, the report should be released and How could anybody change the report? The attorney the three member majority hired is so bizarre that the current Village Attorney Dick Haefeli had to remind him he was an attorney and question what he was doing!! Isn't it more likely noting the ineptitude of Mr. Augustine that he just didn't understand the report and until the cover letter was presented he was clueless! It sounds like this is now the third report that shows ...more
By Sug Tonmi (25), southampton on Mar 13, 13 8:53 PM
Thanks for the props but what did you mean by "It sounds like this is now the third report that shows that there are no major issues with the Village procedures"

I don't know to what level the State's audit was conducted. I would think it was more superficial just based on the notion that they were not physically present (to my knowledge) in the Village.

In publishing they call it "POP" which means publish or perish. The implication is it is final and the further implication ...more
By Hambone (514), New York on Mar 14, 13 11:13 AM
Sure Mr Haefeli give Mr Augustine hell for expressing something to the public. You know the public the idiots that pay your salary.
By chief1 (2800), southampton on Mar 14, 13 4:49 PM