DiNapoli audit faults former Niagara County treasurer
Denise Jewell Gee
March 12, 2010
The Buffalo News
http://www.buffalonews.com/2010/03/12/985615/dinapoli-audit-faults-former-niagara.html
Former Niagara County Treasurer David S. Broderick used his position as public administer of estates to benefit friends and family, according to an audit released this morning by State Comptroller Thomas P. DiNapoli.

State auditors who reviewed 15 estates Broderick handled during a five-year period found that he failed to safeguard the decedents’ assets when he administered estates for people who died without wills or had no one qualified to oversee their estates.

The auditors found that Broderick sold assets at prices below their value and contracted with attorneys, real estate agents and appraisers without seeking competition.

“There was a lax operation here that left open the possibility for exploitation,” DiNapoli said this morning during a news conference in Niagara Falls City Hall. “And we have to be sure that doesn’t happen again.”

The Buffalo News in April 2009 reported on questions raised about Broderick’s handling of estate cases in Niagara County.

DiNapoli said he turned the audit findings over to Niagara County District Attorney Michael J. Violante to determine if any laws were broken.

Among the examples cited by auditors:

• There was no evidence that Broderick obtained professional appraisals to determine the value of five houses he sold from estates.

• There was no evidence that Broderick advertised three of the houses before they were sold and no documentation of how he found buyers for the properties.

• He sold three vehicles to a county sheriff’s deputy for a total of $2,000, including a 1970 Chevrolet Monte Carlo that may have had “substantial value” to a classic car collector. Auditors said they found local classified advertising listings asking for as much as $38,000 for the same car.

• Broderick sold the contents of one house for $270 in an estate valued at more than $450,000.

Broderick, in a written response included in the audit, said the Monte Carlo was “just a frame with a small engine that did not run,” and that it was sold by the deputy sheriff for parts.

DiNapoli said proving that Broderick purposefully exploited the system is difficult because there is a lack of documentation for many of the items sold.

“Take the case of that car. There was no record, no photograph of the condition of the car. Was it a pristine classic that could have sold for that $38,000 — that Monte Carlo — that we saw a listing of?” DiNapoli said. “Or were the doors hanging off and the headlights busted and was it fair price? We can’t answer that question.”

That’s why, DiNapoli said, there needs to be better documentation and review of the public administrator’s work.

“Certainly, when you don’t have adequate records and when some of the people involved in the transaction have personal relationships with the public administrator, it raises a big question,” DiNapoli said.

DiNapoli also faulted Broderick for using a county-paid secretary to work on the estates.

Broderick, citing health concerns, abruptly quit his post in January after months of public allegations that he had manipulated estates he controlled because of his public position.

The audit examined 15 estates handled by Broderick during the period between January 2004 and October 2009.

Broderick has denied wrongdoing.

“Nowhere in this report does it indicate that a single dollar was missing from an estate,” Broderick wrote in a lengthy response to the audit. “It is the conclusion of this public administrator that your audit is flawed in its methodology, and unfairly, critical of my procedure, without candidly regarding that the audit found NO instance in which any loss occurred during my administration of these many estates.”

Broderick also said that DiNapoli’s referral of the audit to the Niagara County District Attorney was “unwarranted and without any basis.”

In response to Broderick’s criticism of the audit, DiNapoli said simply, “He’s wrong.”

Audit critical of ex-Niagara Co. treasurer
March 12, 2010
Business First of Buffalo
http://www.bizjournals.com/buffalo/stories/2010/03/08/daily44.html
The state comptroller’s office chastised the work of the former Niagara County treasurer, concluding David Broderick under valued estates and gave business to family members and friends.

The audit, released Friday, covered the period from January 2004 to October 2009.

Comptroller Thomas DiNapoli said Broderick did not take adequate steps to safeguard assets when he administered estates for people who had no one qualified, willing or able to administer their estate. Also, Broderick apparently sold assets at prices below their value, contracted with attorneys, real estate agents and appraisers without seeking competition, and had his county-salaried secretary spend a significant amount of county time performing estate-related work.

DiNapoli has referred his report to the Niagara County District Attorney’s office for review to determine if any laws or statutes were violated.

“There is an expectation, rightfully so, that public servants will act in the public’s best interest. That’s not what happened in Niagara County,” said DiNapoli. “The county treasurer did not take adequate steps to properly value and protect the assets contained in people’s estates.”

Broderick, 71, left his post in January, citing medical issues. He served as public administrator of estates since he began as treasurer more than 30 years ago.

Auditors reviewed Broderick’s processes for the identification, documentation, collection, safeguarding and liquidation of estate assets, cash management, record keeping, and the selection of service providers for 15 estates with gross assets totaling approximately $1.8 million. For administering these estates, the treasurer will receive commissions totaling approximately $73,000.

DiNapoli’s auditors found the county treasurer:

• Sold three vehicles to a county sheriff’s deputy for a total of $2,000. One of them was a 1970 Chevrolet Monte Carlo which may have had substantial value to a classic car collector and/or enthusiast, as auditors found seven listings for 1970 Monte Carlos with asking prices ranging from as low as $9,850 to as high as $38,000;

• For one estate, valued at more than $450,000, which included a house and a significant amount of cash, Broderick sold the contents of the house for $270;

• Did not use a competitive selection process for individuals he retained to perform certain duties, such as attorneys, real estate agents and appraisers; family and acquaintances benefited from estate activities;

• Used his secretary to do estate administration work on county time;

• Did not ensure that assets were adequately identified, collected, safeguarded, appraised, liquidated and properly credited to the estate; and

• Did not control the identification, collection, and sale of assets found during searches of decedents’ premises.

DiNapoli made a series of recommendations to rectify operations within the treasurer’s office.

The report also noted that although an attorney for Broderick indicated his client disagreed with the findings of DiNapoli’s audit, auditors discussed the findings and recommendations with the Surrogate’s Court judges. The judges generally agreed with DiNapoli and have already implemented new procedures that address the findings.

NIAGARA COUNTY: Broderick audit sent to DA
Mark Scheer
March 12, 2010
Niagara Gazette
http://www.niagara-gazette.com/local/local_story_071224429.html
The Niagara County District Attorney’s Office has been asked to review a state comptroller’s audit to determine if former Niagara County Treasurer David Broderick violated any laws or statutes while performing his duties as the county’s public administrator of estates.

In a visit to Niagara Falls City Hall on Friday, state Comptroller Thomas DiNapoli accused Broderick of “cutting corners” in his handling of estate affairs. He based his assessment on the findings of his audit team, which determined Broderick sold estate assets at below their value, hired attorneys, real estate agents and appraisers without seeking competitive bids, failed to maintain adequate records of transactions and regularly assigned his secretary to perform estate duties on county time.

In a 16-page response, Broderick took exception to many aspects of the audit, suggesting that it was performed without “any defined auditing standards” and “without regard to uniformity.” Broderick suggested that DiNapoli’s staff failed to address a key question about the status of state rules governing the duties of public administrators and ignored “the practical aspects” of dealing with small or difficult estates. Broderick also labeled the comptroller’s office referral of the audit to the DA’s office as “unwarranted and without any basis,” noting that the auditors did not identify any instances where laws were broken or estate assets were missing.

When asked about Broderick’s response, DiNapoli said simply: “He’s wrong.”

“It was a lax operation here that left open the possibility for exploitation and we have to be sure that it doesn’t happen again,” he added.

Attorney: Report ‘flawed’

Broderick resigned in January, citing health problems and an interest in spending more time with his family. His resignation followed a dispute over his handling of the estate of a Lewiston woman whose daughter, Amherst attorney Teresa Snyder, raised questions in court about Broderick’s performance as public administrator. The audit followed after a formal request for a review from county surrogate court judges Matthew Murphy and Sara Sheldon Sperrazza.

As the county’s chief fiscal officer, the county’s treasurer is responsible under state law for overseeing the affairs of individuals who die without wills or have no one qualified or willing to administer their estate.

Reached by telephone on Friday, Broderick’s attorney, George Muscato, said his client considers the audit “flawed” in many respects and noted that DiNapoli’s team did not identify an instance in which any assets were not properly accounted for or had gone missing. Muscato acknowledged that in some instances better accounting practices could have been employed by Broderick, but he insisted his client did his utmost to make sure the assets under his care were handled appropriately. He also insisted that Broderick violated no laws or committed any ethical violations in performing his duties as administrator.

“There’s not a single dime missing from any estate that anybody has complained about,” Muscato said.

Muscato echoed concerns raised by Broderick in his response to the audit, noting that the review was requested by Murphy and Sperrazza in an effort to address questions about the Report and Guidelines of the Administrative Board for the Offices of Public Administrator, a set of state rules for public administrators that was developed in 1995.

Muscato, County Attorney Claude Joerg and other assistant county attorneys have consistently maintained that those rules , which, among other things, bar administrators from doing business with relatives, were never ratified and, therefore, cannot be enforced. Broderick and Muscato say not only did the auditors fail to answer those questions, but never applied the guidelines in performing the audit.

“They can say whatever they want to say, but these allegations are unsubstantiated,” Muscato said.

“I think that Mr. Broderick has been a public servant for 37 years and it’s unfortunate that at the end of his career he has been confronted with these issues,” Muscato added.

DiNapoli referred questions about the public administration rules to the state Office of Court Administration.

Officials from that office have previously indicated that public administrators are barred from “self-dealing” or involving relatives in estate business. DiNapoli noted that many of the issues raised in audit refer to instances in which Broderick acted outside the bounds of commonly accepted practices for individuals holding public office of any kind.

“Very clearly, there are sound practices that public officials involved with managing estates should be incorporating as part of looking out for the people’s business,” DiNapoli said.

Correcting past mistakes

District Attorney Michael Violante issued a letter in January 2009 in which he indicated that his office found no indication of any wrongdoing on Broderick’s part and concluded that no county employees were assigned to the former treasurer’s estate-related work. In the letter to Snyder, Violante said his office investigated her concerns about Broderick’s estate dealings and found “no violations of the general municipal law or the penal law have occurred.”

DiNapoli said the audit was referred to the county District Attorney’s office as a matter of common practice.

“We’re not a law enforcement entity. We are not lawyers. We are not involved in that end of it,” DiNapoli said. “We do an audit. When there are unresolved questions we then refer it for those who have a responsibility for answering those questions.”

DiNapoli suggested county lawmakers take a close look at the recommendations from his office and take any necessary steps to ensure that public resources will be used appropriately where future estate work is concerned. He noted that the county surrogate’s court judges have indicated a willingness to follow the recommendations.

“Obviously, there have been some significant issues here,” DiNapoli said. “The individual we are talking about has resigned. Someone new is coming on very soon. I think we’ve given a very professional and a very clear road map on how to do things the right way here.”

He pointed to the use of the county employee in the treasurer’s office for estate work as something worthy of further investigation.

“If there’s money being paid for the public administrator for work and work is being done by someone else on the county payroll, it would raise an obvious question about reimbursement to the county,” DiNapoli said.

The comptroller said the goal now is to ensure that the county’s public administration work is handled with a higher level of professionalism.

“The key point of it is, how do we put a government operation back on a stronger and more positive path to look out for the interests of the citizens of the community,” DiNapoli said. “I think in this case, we’ve seen a very positive response to what we’ve been laying out and we look forward to a better public administrator role here in Niagara County as we move forward.”