Legal Aid Society lacks financial oversight: Maragos audit

Legal Aid Society lacks financial oversight: Maragos audit
Nassau County Comptroller George Maragos is seen in September 2016. (Photo by Noah Manskar)

By Kristy O’Connell

Nassau County’s Legal Aid Society mistakenly kept nearly $40,000 owed to the county and spent almost $450,000 without administrative approval over three years, a recent county audit found.

The audit, released on March 22 by county Comptroller George Maragos, found that some of Legal Aid’s banking and financial procedures were not completely adequate, though the society is appropriately using funds and performing accounting as required by its contracts with the county.

The auditors recommended that the Legal Aid Society hire additional staff to ensure stricter checks and balances of spending and accounting, and keep better records of all rebates and refunds owed to the county.

“I’m satisfied that Legal Aid has accepted our findings and recommendations and agreed to institute changes in their financial management to address the fiscal and operational concerns raised in the audit report,” Maragos, a Democrat, said in a statement.

The Legal Aid Society provides legal representation to criminal defendants in Nassau courts who are unable to hire their own attorneys. The society has contracts with the state and county that pay for attorneys, paralegals, witnesses and investigations. 

Maragos said the Hempstead-based nonprofit should properly maintain records of all rebates and refunds; modify its vacation policy; introduce a supervisory review of all expenses and accounting records; and record bank statements and adjustments to accounting records with supporting detail.

The audit, conducted between Jan. 1, 2012 and Dec. 31, 2015, found the Legal Aid Society failed to properly return $38,296 to the county for health insurance, lie-detector tests and other expenses. The money was kept and used for operations and documented expenses, the audit says.

Expenses were not always approved by management, the audit found.

About 50 payments from the society’s petty cash fund totaling nearly $230,000 exceeded the $500 limit for such expenses, and three payments totaling nearly $5,000 were posted to incorrect accounts in accounting records, the audit says.

Additionally, inadequate recordkeeping makes it difficult to verify the accuracy of unearned vacation time borrowed by Legal Aid employees, as allowed by an organization policy, the audit said.

It has been noted by Legal Aid, however, that when employees have borrowed unearned vacation time, they have received a salary adjustment so they are not compensated for that time. 

In a Feb. 27 response to the audit, N. Scott Banks, Legal Aid’s attorney in chief, said efforts are being made to return the funds that are owed to the county.

The society thinks the unapproved payments mentioned by the auditors were in fact authorized and approved by the previous attorney in chief, but may have been mistakenly issued without approval from the treasurer or president of its Board of Directors.

The society also no longer permits employees to borrow unearned leave time, its response says.

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