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Audit finds Albany Water Board owed $1.5M to vendors

ALBANY -- An audit found the Albany Water Board continually paid bills late and had more than $1.5 million past due. The board also owed $46,102 in late fees for property taxes to surrounding towns.

“We were surprised that it was as much as it was,” said Chief City Auditor Leif Engstrom. “Invoices were sitting on desks and the chief finance officer wasn't pushing the invoices forward and getting them paid.”

An internal investigation did not reveal any fraud. Auditors found the board had the money in its account, but didn’t realize it owed the money because of poor bookkeeping.

Water Board Assistant Commissioner John Kosa declined an on-camera interview with CBS 6, but said the problems were addressed and blamed its prior chief fiscal officer for poor management. He added all vendors have now been paid.

The audit did not name the CFO, but board minutes from Febryary 2011 identify her as Barbara White, who was said to have resigned last month after admitting to the board she wasn’t “on task” with her responsibilities.

Water customers were forced to absorb the late fees assessed by other towns, which amounts to approximately $1.50 each. Engstrom believed the most impacted were local business owners, who have had to wait years to get paid.

The board believed it owed vendors $653,224. A survey sent to 200 vendors found 66 disagreed with amounts the water board believed it owed them, totaling $1,569,852. The audit also called out an unnamed employee who supposedly asked a vendor to change an invoice to receive payment.

“One vendor that we know of was asked to change a date on an invoice so that it looked like it was more recent than it was and they were told they weren't paying invoices that were older which isn't true,” said Engstrom. “If we're going to be a business friendly city, we need to be a good organization to do business with.”

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