Niagara Gazette

January 24, 2013

Housing authority controls questioned

By Mark Scheer
Niagara Gazette

Niagara Gazette — The New York State Comptroller’s Office wants the Niagara Falls Housing Authority to improve oversight of its executive director after an audit identified issues related to her compensation and use of accrued vacation time. 

In an audit covering activities between Jan. 1, 2010 and July 31, 2012, the state comptroller’s office determined that housing authority Executive Director Stephanie Cowart received $6,400 in “improper” stipends and “improperly accrued more vacation leave than authorized without board approval.”

The audit, which reviewed payments made to Cowart to determine if they were accurate and in compliance with her employment contract and authority personnel policies, found 70 payroll checks totaling $290,460 were properly allocated to Cowart during the period in question. It also revealed “certain other payments” that were “improperly paid, not supported with appropriate documentation, and/or did not comply with the terms of the employment contract.”

In its report, the comptroller’s office blamed the situation on what it described as a lack of “sufficient” board oversight. 

“Unless the board increases its oversight of the executive director, the authority is at risk of paying her for benefits she is not entitled to receive,” the audit report noted.  

In its recommendations, the comptroller’s office called upon the authority’s board to recover “any improper payments.”  

Cowart said elements of her contract may be renegotiated in compliance with the auditors’ recommendations, but said she does not anticipate being required to pay back any money. 

“All payments were approved,” she said. “They were accurate and they were fully supported.” 

Cowart’s contract runs from Dec. 1, 2011 to Nov. 30, 2014. She is paid a base salary of $105,798 per year, with a monthly stipend of $500 allowed for reimbursement of “expenses” as well as an additional yearly compensation of $5,000. She is also eligible to receive “bonus payments” at the board’s discretion for “extraordinary accomplishments.” 

In their review, state auditors determined that Cowart received $16,000 in reimbursement stipends during the audit period. They noted that it was “not clear” whether the board intended the stipends to reimburse her for personal or business expenses. According to the report, Cowart told auditors the stipend was used for the use of her personal automobile, although they noted authority officials could not provide any documentation to support the assertion.

The audit indicates that Cowart was paid a monthly mileage stipend of $200, which is not addressed in her employment contract. For the audit period, auditors said the amount totaled $6,400. According to the audit report, Cowart indicated that while not part of her contract, it had always been “standard practice” to pay a mileage stipend to the executive director. 

During the audit period, Cowart received $15,000 in “additional compensation.” Auditors noted that it was “not clear” what differentiated the amount from her base salary, or what, if any, additional duties were performed to earn the money. The report indicates that Cowart did not receive any bonus payments for “extraordinary accomplishments” during the audit period. 

Authority officials indicated that all stipends included in the review were allowed under the terms of Cowart’s employment contract, with the exception of the mileage reimbursement which they said was covered as an item contained in the authority’s annual budget. 

Under her contract, Cowart is allowed to accrue 30 vacation days each year and is eligible to receive payment in lieu of vacation leave for up to 10 days. Auditors noted that in 2011, the board passed a resolution allowing employees to be compensated for up to 15 days of unused vacation time. 

As of July 31, 2012, auditors found that Cowart’s leave accrual records reflected a vacation leave balance of more than 1,670 hours, or 239 days. Auditors determined that in 2010, Cowart exceeded the maximum accrued vacation leave allowed under the personnel policy by cashing out 10 of her 30 vacation days and carrying forward the remaining 20 - 15 more than what was allowed - without appropriate board approval. The activity, according to the report, reflected “no actual usage of vacation leave for the entire 2010 calendar year.” 

“At the current hourly compensation rate of approximately $60, the executive director’s accumulated vacation leave balance has a value of over $100,000,” the audit report notes. “If the board had ensured the executive director complied with the policy and approved the carryover of only the maximum allowed of five days annually, with her 29 years of service, the most she could have accumulated would be 145 days, rather than the 239 day reported balance.”

Auditors also found that in 2011 Cowart cashed out more days than allowed by the terms of her contract, receiving payment for 30 days in May 2011 ($12,574) and for 15 days in October 2011 ($6,287). 

When asked about the payments, auditors said Cowart provided them with a copy of a board resolution from October 2011 that authorized authority staff to sell up to 15 days of vacation leave. Authority officials subsequently provided a board resolution dated May 2011 that approved the sale of six weeks, or 30 days, of leave specifically for the 2011-2012 fiscal year, the audit notes.

“Due to the manner in which vacation leave days have been accrued and these transactions were handled — one resolution not specifically listing the executive director and the other resolution being provided at the exit discussion — we question the legitimacy of payments for unused leave that exceed the relevant provisions in her employment contract,” the audit report reads. 

The comptroller’s office recommended the board more “clearly define” Cowart’s employment contract and all compensation and benefits to be received, as well as take steps to ensure she is adhering to authority policies and control procedures in the future. Auditors also encouraged authority officials to ensure that all payments to Cowart are periodically reviewed and audited moving forward. 

Cowart indicated that the authority would follow through on those directives. 

“We intend to use the state comptroller’s examination as it was intended, as a recommendation and a resource,” Cowart said.