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Grand Jury Report Blasts City Of Newburgh's Fiscal Practices

The City of Newburgh was blasted in a grand jury investigation into its financial practices.
The City of Newburgh was blasted in a grand jury investigation into its financial practices. Photo Credit: City of Newburgh

ORANGE COUNTY, N.Y. – An Orange County grand jury report is lambasting the city of Newburgh for its money-handling practices, according to District Attorney David Hoovler.

The grand jury’s investigation, which was initiated by Hoovler, followed an investigation that ultimately led to the prosecution of then-City Comptroller John Aber, who pleaded guilty to grand larceny, for stealing $9,570 in city funds.

The grand jury found a lack of oversight built into the structure of the city of Newburgh government, specifically in its comptroller’s office, the District Attorney said in a report issued Wednesday.

Fiscal procedures in place throughout Aber’s tenure led to a culture of unaccountability, the grand jury report said, and an absence of checks and balances created the conditions that permitted Aber to take cash from the City’s coffers.

The report also details other deficiencies in the way the city of Newburgh is operated, such as failing to retain officials such as the police chief, the city manager, and the city comptroller.

Since 2007, there have been a total of eight different city comptrollers, which has led to constantly changing policies and procedures, the report said. About 3 percent of the city’s $44 million annual budget comes from funds that the city collects in cash from various sources, including the boat launch, miscellaneous petty cash collection, and parking meters, and the City did not have procedures in place to adequately account for how that cash was handled.

The report also alleges the city has no records of how many parking meters it has, where they are located or when the money is being collected.

The grand jury urged the city to adopt recommendations made in a report submitted by the State Comptroller's Office back in 2012. Some of these recommendations include:

  • Require the city manager and the comptroller to maintain complete, accurate, and reliable financial records and prepare periodic and timely reports for the Council to use to assess the city’s financial position.
  • The Council should continue to closely monitor financial operations and take appropriate actions to maintain the city’s financial stability. Appropriate actions would include: appropriating only available unexpended surplus funds, maintaining documentation to support tax levy increases, preparing cash flow analyses to determine the necessary amount of short- and long-term debt to issue, and completing long-term financial plans that include the comptroller’s input.
  • City officials should establish policies and procedures which detail the responsibilities and actions to be taken to ensure all revenue is collected, monitored and analyzed.

“It is distressing that city officials never fully implemented the practical recommendations that were contained in the report issued by the State Comptroller’s Office in 2012,” Hoovler said in a statement. “The residents of Newburgh deserve to have their public officials safeguard municipal funds so that they can be used to benefit City residents and not be stolen or wasted.”

The grand jury also included several recommendations of its own, including:
  • Stop the high turnover rate of employees in the City Comptroller’s Office and other key positions such as the city manager and police chief. The grand jury has significant concerns that the lack of oversight and stability in the Comptroller’s Office can have equally negative effects in the police department.
  • Increase the city manager’s oversight overall cash collection within city government, including consistent reporting from the comptroller to the city manager to help identify trends in cash flow and plan accordingly. Such measures will help reduce the possibility that missing cash will go undetected.
  • Work collaboratively with the City Council and the DPW to determine where to immediately install the three new parking meters, which are now sitting in the DPW building.
  • Create a reporting system through which city employees can anonymously report concerns about cash-handling practices without fear of professional repercussions.

"Poor controls and lack of oversight are an invitation to fraud. The Grand Jury's report details lapses which permitted the City Comptroller to defraud taxpayers and offers essential recommendations for moving forward," said State Comptroller Thomas P. DiNapoli. "I thank District Attorney Hoovler for his continuing partnership in fighting public corruption."

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