Riverhead internal audit committee faults highway department’s compliance with town policies

The Riverhead Highway Department has occasionally violated the town’s procurement policy and procedures and has inconsistent documentation for certain equipment and purchases, according to an audit report by the town’s internal audit committee.

The audit, begun early last year, looked at the department’s activities from the beginning of 2018 through the beginning months of 2020. The audit involved analyzing various inventory and documentation for equipment, department hiring and firing practices, and interviews with department employees, Highway Superintendent George Woodson and at least one vendor. 

The audit committee presented its report to the town board during its work session Thursday. Established by the town board in 2012 to examine compliance by town departments with town laws and procedures, the committee is made up of volunteers and is led by town resident Jack Orben. The committee is supported by an outside accounting firm, East End Accounting Services, led by Charlene Kagel, a certified public accountant who has experience in municipal finance. 

In an interview Friday, Woodson, a Democrat, called the audit politically motivated. He said rumors that he would run for town supervisor this year caused the Republican-majority board to request a preliminary report in January, before the audit committee was even able to discuss its findings with him — which deviated from the committee’s normal practice.

“I think it was an opportunity for some individuals to try to make me look bad,” Woodson said. Earlier this year, Woodson announced that he would retire at the end of his term on Dec. 31.

Woodson said some things the committee would share with the town board could have been explained by him or were “petty.” One example in the audit, Woodson said, was the misdescription of a tractor as a “bucket truck.” Woodson said that although the vehicle was not a truck, the tractor did have a bucket on it.  

“I see why people don’t want to run for public office, petty things like this. Politics get in the way,” Woodson told RiverheadLOCAL. “And you have a lot of good people that would like to run for office, but they don’t want to put up with the bullshit. And that’s what people do in political life: they attack each other instead of working together.”

Orben stressed at the beginning of the work session that the audit process was purely objective and independent from the town board. He said the audit would detail infractions of town or department policy whether there was a good reason for the infractions or not. Orben said the committee was not involved in politics, contrary to comments that Woodson made to him that suggested the committee had some kind of agenda for its audit.

Before Orben started presenting, Councilman Ken Rothwell, who was made liaison to the Highway Department when he was appointed to the town board in January, apologized for the events of the Jan. 28 meeting. Rothwell said he thought the audit was just about financials and not about certain procedures and policies that Woodson was put on the spot to answer for.

“It would be impossible for anyone to field questions dating back three, four or five years ago without researching his own records,” Rothwell said.

“I believe that you have always put the taxpayers first and it is my hope that the next highway superintendent learns from all of your practices and from materials from this audit that we’ve learned to be successful in the future,” Rothwell said to Woodson toward the end of the discussion. “You’ve done a great job and I do commend you for your work for years in the town.”

Woodson, who was notified about the meeting by Orben but not required to attend it,, was not present for Rothwell’s opening statement or Orben’s explanation of the committee’s independent nature. The highway superintendent appeared in Town Hall shortly after Supervisor Yvette Aguiar mentioned he should be there and asked a staff member to contact him. The work session was the first time Woodson or the town board had seen the complete audit, according to the audit report.

Woodson said during the meeting that many of the procurement inconsistencies that appeared in the audit were because the town’s purchasing officer, who was undergoing treatment for cancer,, was in and out of work for months at a time. She passed away last year. Kagel said things became more consistent when the town hired a new purchasing agent.

Woodson also said the committee had not previously audited the highway department and therefore its members “know nothing about the highway department” and how it is run. Although they admitted they didn’t know the day to day operations of the department, Kagel said she had audited town highway departments before.

Woodson also claimed that the audit committee also targeted specific vehicles to examine, which he said indicated someone told them of alleged problems. The committee denied that assessment of their work.

In a somewhat “awkward” conversation, Woodson told Orben “he had disdain for this council. He did not believe that the council really understood what went on in the highway department,” Orben said.

“I was quite surprised, because other department heads we go to never talk this way,” Orben said. “He also told me, explicitly, that he would avoid using the procurement policy of the town to buy equipment for the Town of Riverhead… he was very proud of the fact, in his mind, that he was able to save the town money to buy a better truck at a reduced rate.”

Orben also said that Woodson told him he understood there were issues with the department that needed to be improved.

The audit mentions a few instances where the department procured equipment without the approval of the town board, which Woodson noted he had power to do by town board resolution. From 2012 to 2019, the town board granted the highway superintendent the authority to spend $75,000 per year to purchase “equipment, tools and implements” without the town board’s approval. 

The audit also mentions one transaction where the department paid $75,000 over the amount of a requisition for paving expenditures and another transaction where the department made a $160,545 equipment purchase when the department was only authorized to make a $75,000 purchase. 

In interviews with the audit committee, employees of a highway department vendor said Woodson would sometimes be the vendor’s guest at golf outings, Orben said. Orben said the behavior might be a concern to bring up with the town’s ethics board.

Orben also described a department policy that allowed employees to borrow equipment for personal use. Upon review with the town attorney, however, Orben said this was illegal and the town could be held liable should anybody be injured by the equipment’s use. Rothwell said Woodson admitted that this was an oversight and said the policy was put in place to help employees if needed. Woodson corrected his policy after the Jan. 28 meeting when he was informed it is illegal, Rothwell said.

The audit did not find any violations of hiring or firing procedures in the highway department. 

The recommendation of the audit is that “the Highway Superintendent should review the Town’s Procurement Policy and adhere to the procedures outlined in the policy and General Municipal Law.” The audit committee has no governing power, therefore the town board has to decide if they want to take any action to change the department. 

Rothwell said in an interview on Friday that the town board will talk further about the audit at a later date, discuss the findings with Woodson and deliberate if they want to implement any changes. Councilman Frank Beyrodt and Councilman Tim Hubbard were not present at the meeting and have not had a chance to review the audit, Rothwell said.

Orben also recommended at the end of the meeting that the town pause the committee’s work and go back to amend the original resolution that established the committee to more closely define their responsibilities. The board and Orben also expressed interest to hold comprehensive meetings with newly elected officials in the future to inform them of the audit committee’s role.