Purpose

To determine whether the Development Authority of the North Country (DANC) provided adequate oversight of its procurements and loan programs in accordance with the Public Authorities Law (Law) for the period April 1, 2012 through March 31, 2015.

Background

DANC is a self-supporting public benefit corporation overseen by a 13-member Board of Directors. DANC was created in 1985 under Article 8, Title 29 of the Public Authorities Law to provide infrastructure services and economic development in Jefferson, Lewis, and St. Lawrence counties. DANC operates a solid waste management facility, a fiber-optic network, and a water/sewer facility. DANC’s operations provide services to customers at Fort Drum and in surrounding counties. DANC has partnered with an energy company to create a gas-to-energy plant that converts methane, a by-product of waste, into electricity. In addition, DANC administers several State-funded loan programs that promote job creation and affordable housing. DANC spent $21.6 million and $15.2 million for all procurements during fiscal years 2012-13 and 2013-14, respectively. During our audit period, DANC also received payments on a total of 70 loans it had awarded for various purposes, including affordable housing, business development, and tourism enhancements. The outstanding balance on these loans was almost $35 million as of December 31, 2014.

Key Findings

Generally, we found that DANC officials have provided appropriate oversight for procurements and the loan programs, having established policies and procedures and maintained sufficient monitoring systems. However, we did identify some areas where DANC could improve its operations, specifically in terms of procurement reporting and determining reasonable cost.

Key Recommendations

• Establish procedures to ensure complete and accurate annual procurement reporting.
• To promote greater accountability and transparency, and to ensure that accurate information is available to the public and decision makers, to the extent possible, correct prior year Procurement Reports included in PARIS reporting.
• Establish and enforce procedures to analyze the reasonableness of cost associated with all applicable procurements, and retain documentation supporting these efforts as an integral part of the procurement record.

Other Related Audits/Reports of Interest

Central New York Regional Transportation Authority: Selected Aspects of Discretionary Spending (2012-S-153)
Capital District Transportation Authority: Selected Aspects of Discretionary Spending (2013-S-10)