LAKE LUZERNE — Two audits from the New York State Comptroller’s Office faulted Lake Luzerne Town Supervisor Gene Merlino for his lack of oversight over payroll processes and failure to obtain competitive bids for projects. Auditors said the town could have saved tens of thousands of dollars with proper work.
This is the continuation of the troubles Merlino faced when he ran for office in 2021. The town board then held a vote of no confidence in him. Contacted Friday, Merlino said that the town has taken care of the issues raised. He said a separate investigation exonerated him of any crimes, which was something election opponents had alleged.
According to the audit, 39 of 54 hourly wage registers were improperly reviewed and certified, a problem Merlino said is now corrected. None of the 67 time cards reviewed had all the needed punches for time in and out. Time taken for lunch was also assumed to be 30 minutes and inserted into the time off. The card often did not indicate whether the employee had taken the time, or not. Overtime payments to hourly employees were improperly calculated because they included paid time off in determination of wages.
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“When payrolls are not properly reviewed and certified, there is an increased risk that employees could be paid for hours not worked, and that errors of irregularities could occur without detection,” the auditors wrote. In this case, the town made overpayments of $8,052 out of $47,192 in payments reviewed.
Town officials said that employees working off site do not always return to the office at the end of their shifts to punch out, or to track lunch time out and back in.
Merlino said the town will be reviewing time card procedures, noting that it is not efficient for employees who are working away from the garage to return to punch out.
Eight employees received mid-year wage increases in 2020 ranging from 50 cents to $2.50 per hour, resulting in an increase of $13,650 in payroll annually.
The board did not approve these raises. The supervisor told auditors that five of the eight employees assigned to the building and grounds department took on additional responsibilities when the department director retired. Employees in the highway department were given raises to correspond with increases given to building and grounds employees.
Auditors said wage increases must be approved by a board resolution.
“The Supervisor approving pay raises after the budget was developed resulted in the lack of transparency and lack of any Board oversight or approval,” the audit said.
Auditors recommended that the board standardize wage increases, require employees to sign time cards and supervisors to certify the time worked. The Town Board has been provided with a proposed salary listing for all employees during the budget process and should approve midyear raises.
In addition, the board has amended its overtime policy to include sick leave time, vacation time and personal time in calculating the time worked.
A separate audit faulted the town for not obtaining competitive bids on goods and services, totaling $561,829, or 48% of the purchases reviewed.
Four purchases totaled $417,674. The town could have saved taxpayers at least $37,000 by seeking competitive bids, auditors wrote. This included purchases of two medium-duty plow trucks, a pickup truck, a salt brine maker and fire hydrant, according to the audit.
Also, the audit faulted Merlino for trading the town’s 18-foot pontoon boat for a 24-foot boat without providing an invoice or written agreement detailing when the trade occurred, the value of the transaction or if the board authorized the transaction.
Auditors said that emergency purchases were not conducted properly. Merlino sought to fix a failing water pump and spent $45,161 for two pumps, for crane services and electrical services.
Merlino told the auditors he was focused on correcting the problem and not on documenting what actions he took to solicit vendors.
“Therefore, the Supervisor could not provide any documentation that competition was sought by informal solicitation of quotes or otherwise, to the extent practical under the circumstances,” the auditors wrote.
Also, Merlino awarded a $15,000 contract for a roof repair without a formal declaration of an emergency.
Auditors reviewed three “sole source” purchases totaling $23,022 for a snowplow and a snowplow blade. There was no documentation as to why only the selected vendor could provide this equipment.
In his written response, Merlino said he did not dispute the findings and that the town would comply with all applicable bidding statutes.
Merlino’s oversight of town finances was a key issue in the race for supervisor in 2021. The rest of the Town Board in June 2021 had voted to express no confidence in him, accusing him of acting without board authorization in approving overtime, awarding contracts and making purchases.
After initially declining to run, Merlino mounted a write-in campaign and was re-elected as supervisor.