Department of Economic Development
Empire State Development Corporation

Oversight of Grants Awarded to the Suffolk-Nassau Chamber of Commerce at Huntington

Between 1999 and 2005, the New York State Department of Economic Development (DED) and the Empire State Development Corporation (ESDC) awarded ten grants to the Suffolk-Nassau Chamber of Commerce at Huntington (nine of the grants were member item grants sponsored by the State Legislature). The grants funded various projects and other activities that were intended to promote economic development in and around the Town of Huntington. As of December 31, 2005, DED and ESDC had reimbursed the Chamber for $496,195 in claimed expenses under the ten grants. However, we found that $124,872 of this amount (about 25 percent) was not, in fact, reimbursable. For example, some of the claimed expenses were not actually paid by the Chamber. In other instances, either the same expense was reimbursed twice or the amount claimed by the Chamber for an expense exceeded the amount that had actually been paid. In addition, some of the claimed expenses were not supported by records confirming that the expenses had actually been paid and were related to authorized grant purposes.

We determined that most of these inappropriate reimbursements could have been prevented if effective procedures had been in place at DED and ESDC. Under the procedures that were in place, most of the inappropriate and unsupported expense claims could not be detected, either because the expenses were misrepresented on the reimbursement claims or because insufficient documentation was required in support of the claims. In addition, the two agencies did not closely monitor the Chamberís progress in accomplishing grant objectives, and most of the inappropriate and unsupported expenses were claimed on grants in which little progress was made. If the two agencies had monitored the Chamberís progress more closely, the inappropriate reimbursements might have been averted. We recommend DED and ESDC recover the $124,872 in inappropriate reimbursements, strengthen their controls over grant reimbursements, and more closely monitor grant recipientsí progress in accomplishing grant objectives.

For a complete copy of Report 2005-R-6 click here.
For a copy of the 90-day response click here.