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Battery Park City Authority Seeks New Auditor

By Julie Shapiro | March 16, 2011 1:34pm
The Battery Park City Authority will soon have a new auditor managing the neighborhood's finances.
The Battery Park City Authority will soon have a new auditor managing the neighborhood's finances.
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By Julie Shapiro

DNAinfo Reporter/Producer

BATTERY PARK CITY — The Battery Park City Authority is hiring a new auditor, three months after a report slammed the authority for wasting $300,000 on parties and fancy lunches.

The authority plans to hire an outside firm to perform its internal audits from now on, to ensure that the audits are independent and thorough, board members said at an Audit Committee meeting Wednesday.

"When you have a person who is part of the organization reporting internally, it is a difficult process," said Robert Mueller, chairman of the authority's Audit Committee.

In the past, the authority had an internal auditor, Roy Villafane, who reported to Lisa Miller, vice president of internal audit and compliance.

The inspector general's scathing report on the authority last December criticized both Villafane and Miller for inappropriately documenting the car and driver perks that former authority Chairman James Gill received.

Miller still works for the authority, but Villafane retired about six months ago and the authority never replaced him.

"We've been operating without an internal auditor for almost six months," Mueller said Wednesday. "One way we can solve this problem is to come up with an outside firm who's had experience."

The authority had planned to spend about $128,000 per year to hire a new internal auditor. Hiring an outside firm to perform the same job will likely cost more for the first year or two but over time could save money, Mueller said.

While it is somewhat unusual to hire an outside firm to perform internal audits, it is not unheard of — the city's Office of Management and Budget does so as well, said Gayle Horwitz, president of the authority.

The authority plans to release a request for proposals to select the new auditor within the next 10 days, Horwitz said. The authority could vote on a contract as early as May, said Bill Thompson, the authority's chairman.

The auditor will examine the authority's finances — which include tens of millions of dollars of year in profit — along with the authority's contracts and technology, Mueller said. To prevent conflicts, Mueller wants the auditor to report directly to the Audit Committee, rather than to members of the authority's staff.

Last year's inspector general report uncovered a culture of "extravagant spending practices" at the authority and accused former President Jim Cavanaugh of firing a whistleblower and paying her to keep quiet. Cavanaugh and Gill both left the authority before the report came out.

At Wednesday's meeting, the Audit Committee also talked about ways to avoid misspending in the future, including establishing a zero-tolerance environment and protecting whistleblowers.