The second shoe has dropped. As the County Legislature prepared to make way for the removal of the auditing firm tainted by the federal fraud charges filed against Ramapo, the company decided to quit before they could be fired. Next is an account that needs some serious additional scrutiny. O’Connor Davies has done the East Ramapo audits for a school board already accused of misplacing millions.
“The auditing firm cited by the federal government for fraud connected to municipal bonds on Wednesday night withdrew its contracts with Rockland County, just as the Legislature was preparing to cut ties with the firm.
“The firm has come to the conclusion that without the full support of the Legislature given the set of circumstances surrounding the town of Ramapo and the (U.S. Securities and Exchange Commission) settlement, that it would be in the best interest of you, as a Legislature, the citizens of Rockland … and in the best interest of our firm, that we part ways,” Nick DeSantis of PKF O’Connor Davies told lawmakers.
Legislature Chairman Alden Wolfe had been prepared to introduce a resolution to end the remainder of contracts worth nearly a half-million dollars with the firm.
On Monday, the SEC announced that PKF O’Connor Davies and one of its senior partners had agreed to pay more than a half-million dollars in penalties for issuing fraudulent audit reports in connection with municipal bonds sought by Ramapo to build its controversial baseball stadium.
“We’re very troubled by the factual background that was outlined in the SEC order relating to O’Connor Davies’ services provided to the Town of Ramapo,” Wolfe, D-Montebello, said earlier Wednesday. “I’m troubled by this. The public deserves to have full confidence in those providing services on behalf of the taxpayers.”
On Tuesday, County Executive Ed Day called on legislators to terminate the contracts with the Mamaroneck-based firm.
“We cannot jeopardize our bond rating,” Day said in a statement. “We have to stand united to protect the county’s finances and its standing with credit-rating agencies. There cannot be any unanswered questions.”
Rockland County has three contracts with PKF O’Connor Davies:
- $532,950 for auditing county finances for 2015, 2016 and 2017.
- $318,000 for auditing Summit Park Hospital and Nursing Care Center and the Department of Mental Health in 2015 and 2016.
- $111,000 for accounting services to review Day’s proposed $674 million 2017 budget. The Legislature must approve a budget by Dec. 7.
Rockland County has been doing business with PKF O’Connor Davis and its predecessor companies for more than 30 years, according to Day’s office.
The East Ramapo and Clarkstown school districts also were examining their contracts with the auditing firm.
“The full board will discuss together how best to proceed with respect to PKF O’Connor Davies at our next meeting on Nov. 9,” board President Yehuda Weissmandl said in a statement. “We will also seek advice from the state monitors and our legal counsel to determine the best course of action for the district.”
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