State Comptroller Alan Hevesi has proposed new regulations to require “more transparent, timely and accurate financial reporting” by 215 public authorities in New York State that have statewide or regional significance.
Similar regulations were issued for the Metropolitan Transportation Authority (MTA) last year, the comptroller’s release said.
“Public authorities are an immense shadow government that have offered continuous and unambiguous proof of the truism that, when no one is watching, the increase in mismanagement and corruption is dramatic,” Hevesi said.
He said the new regulations, which are to be be implemented after a period of review and comment, “will set a new standard for financial reporting and will require public authorities to make basic financial information available to the public. These rules are a step towards making public authorities fully accountable to the public they serve.”
The release said a new analysis by the comptroller’s offices that public authority spending and debt are growing.
The survey, which covered authority fiscal years ending in 2004-05, found that:
- Spending and debt service increased 10 percent over two years.
- Overall, spending at all 255 public authorities totaled more
than $31.3 billion.
- Outstanding debt at all 255 public authorities surveyed now
totals $125.3 billion, with the 18 largest public authorities
accounting for more than 95 percent ($120.4 billion) of that debt.
Debt service amounted to $5.48 billion in 2004-05.
- The authorities had 107,613 employees.
- In 2004-05, the 46 public authorities and subsidiaries that
submit annual procurement data to the comptroller entered into
10,404 contracts valued at $5.5 billion. These same entities made
payments of $4.8 billion pursuant to contracts in 2004-05. Unlike
state agencies, with few exceptions public authority contracts
are not subject to approval by the comptroller before they take
effect.
“It is absolutely absurd that these public authorities are still not answerable to any public body, and that even after all the irregularities we have uncovered, there remains no central accounting for the billions of dollars that flow through these entities. The public deserves to know how all this money is being spent and whether decisions are proper and appropriate,” the comptroller said.
The new regulations would:
- Require consistent presentation and development of four-year
financial plans in accordance with generally accepted accounting
principles and greater transparency, with detailed estimates of
revenues and expenditures, quarterly updates to each Board, and
certifications signed by each chief operating officer.
- Increase the number of entities required to report financial
information annually to the comptroller’s office.
- Require each governing board and authority management to develop
written investment policies, to review them annually, and to follow
prudent investor standards. They also will require each authority
to establish a pre-qualified list of firms eligible to transact
business with them.
There was some question about the comptroller’s standing to unilaterally issue the regulations.
“The comptroller made some positive suggestions, which we will certainly take under advisement,” said Kevin Quinn, a spokesman for Governor Pataki, told the Syracuse Post-Standard. “However, we remain unconvinced that he has any actual legal standing to require these changes.”