Apparently, the stink attached to Ramapo’s auditor fraud, made redolent with fines and sanctions from the SEC, has motivated other local clients of O’Connor Davies to skip the clothespins and go directly to showing the auditing firm the door. In a press release yesterday, County Executive Ed Day is asking the County Legislature to open the windows and fire PKF O’Connor Davies. The company has three contracts with the County for $1 million.Here is the full text of the Press Release from Ed Day’s office:
Rockland County Exec Ed Day Asks Legislature to Terminate Auditing Firm
NEW CITY, NY – “Rockland County Executive Ed Day is asking the Rockland County Legislature to terminate nearly $1 million in contracts with the auditing firm cited by the federal government for fraud connected to municipal bonds in Ramapo.
County Executive Day today forwarded to the Legislature for consideration a draft resolution seeking to end the county’s relationship with PKF O’Connor Davies.
“Our character is judged by the company we keep,” Day said. “PKF O’Connor Davies is our auditor and conducts a business that speaks to the county’s credibility and financial stability. Our auditing firm must be above reproach.”
The draft resolution will be introduced by entire Legislative Minority for immediate discussion and potential action.
Day is urging the entire legislature to move forward with the resolution.
“We cannot jeopardize our bond rating,” he said. “We have to stand united to protect the county’s finances and its standing with credit-rating agencies. There cannot be any unanswered questions.”
The Mamaroneck-based PKF O’Connor Davies was cited by the SEC and agreed Monday to pay $500,000 to settle charges that it issued fraudulent audit reports related to the bonds sold by the town of Ramapo to finance construction of a controversial baseball stadium in Pomona.
One of its managing partners who sits on the company’s oversight committee which reviews audits, was suspended from practicing public company accounting and prohibited from acting as quality-control reviewer on any municipal audit for five years.
Rockland County has three contracts with PKF O’Connor Davies:
- A contract for $532,950 for auditing county finances for fiscal years 2015, 2016 and 2017.
• A contract for $319,000 to audit Summit Park Hospital and Nursing Care Center and the Department of Mental Health.
• A contract for $111,000 for accounting services to review the proposed 2017 budget.
The county is also looking into other contracts with PKF O’Connor Davies, including one involving a Deferred Compensation plan offered to employees.
Resolutions for all three contracts were approved by the Legislature. The County Executive returned the resolutions to the Legislature unsigned, reflecting his discomfort doing business with a firm that was under investigation in the Ramapo case.
He stated at the time that under the county charter, “the selection of this firm is clearly the choice of the County Legislature.”
County Executive Day would like to see proposals for a new accounting firm.
Rockland County has been doing business with PKF O’Connor Davis and its predecessor companies for more than 30 years.”
(We will report back on the response from the County Legislators, especially from those with direct links to the Ramapo political machine.)