Audit: Comlinks director used $100,000 for herself

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July 21, 2010

By DENISE A. RAYMO Staff Writer The Press Republican Wed Jul 21, 2010, 06:25 PM EDT

MALONE — Nancy Reich allegedly used $100,000 in ComLinks grant funds to pay for room service, a golf-club membership, appliances for her home and Swedish massages.

A 51-page audit released Wednesday by the State Comptroller’s Office says the former chief executive officer at the community-action agency:

E “Arriving the day before a conference in Syracuse, Reich had room service deliver six glasses of wine. The next day, she said she could not attend because she had the ‘flu,’ but she ordered an eggs benedict breakfast from room service and charged it to ComLinks.”

She was later ordered to repay the agency for the wine.

E Paid $2,477 for her membership to the Malone Golf Club with ComLinks money.

E Used $1,839 in grant money to attend fundraisers for former Gov. Eliot Spitzer during his campaign for the office.

E Spent $6,682 on gifts and flowers using ComLinks grant money.

E Stayed after conferences she attended were over and charged ComLinks for the Swedish massages she obtained.

E Threatened to fire employees who questioned her actions.

LEADERS CRITICIZED

Auditors say Reich got away with all of it because “the board of directors failed in its oversight” and Chief Financial Officer Brenda Mallette-Glennon “did not take steps to stop it.”

Executive Director Brain Cassini was cited for providing auditors with invoices that falsely showed ComLinks expenses that were really for appliances purchased for Reich’s home.

He was also criticized for hiring his wife and his son’s former football coach and for using ComLinks funds to pay for a mini vacation in Florida for himself and his wife after Cassini attended a conference there.

The agency board itself was also flagged for paying $8,000 so Reich; her secretary, Mallette-Glennon; and an outside attorney could attend a conference in San Francisco and for reimbursing Reich for expenses, even though she didn’t provide any receipts or say what the expense she incurred was.

The board was also written up for purchasing vehicles from board member Rick Ellis’s car dealership and for ignoring employee complaints when they were taken to the media.

Mallette-Glennon was cited, in general, for “failing in her professional responsibilities” as a CFO and certified-public accountant “because she served Reich’s interests rather than ComLinks and taxpayer interests.”

COVERING UP

Auditors said the Board of Directors was given a letter in December 2007, stating signed by 40 of 49 Comlinks employees saying they had no confidence in the board or Reich, saying she was using agency money for her own spending.

She continued to be in charge for another year until an accountant hired to do the agency’s annual audit was fired because he was going to report discrepancies in the books.

Reich refused to allow the state to look at ComLinks books when they asked in February 2009 then relented, the auditors said.

She still did not give complete records and did not let employees speak with the state representatives.

PUT ON LEAVE, FIRED

As the process continued, Reich, who was paid $80,000 a year, was placed on administrative leave with pay in June 2009.

This was about seven months after she was charged with driving while intoxicated while operating a company vehicle.

The charge was later dismissed.

Once she was suspended, the state got to see the agency’s entire financial picture.

“All $5.8 million was co-mingled into one account,” and few supporting documents were available to show which accounts had what money, the audit said.

She was finally fired by the board last July.

Reich could be reached for comment Wednesday.

RECOMMENDED

The first recommendation from auditors is for the board to contact the Franklin County District Attorney’s Office to “take legal action” against Reich to get the money back since she used it for “inappropriate and fraudulent expenses.”

It also recommends that ComLinks “hire a competent executive director and chief financial officer and hold them accountable to high ethical standards.”

BOARD RESPONSE

ComLinks Board President Marc “Tim” LaShomb said he could not comment on Reich’s portion of the audit “on the advice of the district attorney” and said he also wanted to speak to his staff before talking with the media.

He did acknowledge that beyond Reich, no one has been fired at ComLinks, including Mallette-Glennon and Cassini.

LaShomb provided the Press-Republican with copies of the audit responses written by Mallette-Glennon and Cassini, which were not included in the state’s final audit document.

A written response from board member Rick Ellis will be made available today, he said.

“We find that Ms. Reich is primarily responsible for the misuse of funds,” the audit states. “She frequently used grant monies to inappropriately pay for items that benefited her personally and were irrelevant to ComLinks’ mission.

“She set the wrong tone for the control environment at ComLinks, and that tone permeated operations,” the audit states, adding that she used “a haphazard management style to keep ComLinks employees off balance and the ComLinks Board of Directors at bay.”

Because the board and others in management did not provide proper oversight of her or her actions, “taxpayers were cheated and the needy individuals of Franklin County were deprived of program resources.”

E-mail Denise A. Raymo at:

draymo@pressrepublican.com