Audit reveals Orleans didn’t properly account for and manage inmate and commissary accounts

Mallory Diefenbach

The Daily News

Feb 8, 2018

Orleans County did not properly account for and manage its jail inmate and commissary accounts, according to a State Comptroller’s Office audit released Friday.

The audit covered financial activities between Jan. 1, 2015 through May 10, 2017. It found the former sheriff, Scott Hess, improperly transferred about $33,800 from the inmate bank account to a civil bank account.

In addition, the former secretary — who was not identified — failed to periodically account for and deposit all commissary surcharges into the separate commissary account as required, the audit reads. Instead, a check was issued in November 2015, that the former sheriff signed, to transfer about $23,900 from the inmate account to correct previously unmade transfers to the commissary account.

“The former sheriff did not review the bank reconciliations prepared by the secretary and neither the former nor the current sheriff prepared monthly accountabilities for the inmate and the commissary accounts to reconcile the bank account balances with the outstanding liabilities (e.g., money owed to inmates or vendors),” the audit stated.

The Orleans County Sheriff’s Office is required to maintain an inmate fund to account for all money collected from sentenced inmates at the time of incarceration. Those funds are deposited into an inmate bank account and include funds earned by an inmate during imprisonment and any other money received by or on an inmate’s behalf.

A commissary may be established, maintained and operated for the purpose of making available, for sale to inmates, items deemed proper by such officials and consistent with the inmates’ health and welfare, along with the facility’s security and general operation. On top of this, the Sheriff’s Office — with the legislature’s approval — imposed a 22 percent commissary surcharge on each purchase.

In an accountability performed for the inmate account, it was found as of Feb. 28, 2017, the Sheriff’s Office had approximately $5,400 more in this account than the known amounts owed, according to the audit. Further, department officials incorrectly made disbursements from the inmate account for shared expenditures, such as cable bills, and made disbursements, such as personal inmate telephone charges, from the commissary account.

The former sheriff also did not always account for and transfer surcharges collected from inmates to the commissary account. As a result, excess funds accumulated in the inmate account. In 2015, the treasurer conducted a review of the former sheriff’s records and determined that while inmates and vendors were owed a total of approximately $35,000, the bank account had a balance of more than $68,960. As a result, upon the Legislature’s approval, the former sheriff signed a check for the treasurer to transfer approximately $33,800 from the inmate account to the civil bank account.

However, the comptroller found no evidence the legislature approved this transaction, despite both the treasurer and county administrator saying the Orleans County Legislature was aware of and approved the transfer as part of the 2015 year-end budget adjustments.

“Further, the treasurer’s commissary account audit did not identify any instances in which civil money was erroneously deposited in the inmate account. Consequently, department officials have no documentation to support the necessity of this transfer,” the audit stated. “Because the former sheriff did not properly account for and transfer surcharges from the inmate bank account to the commissary account, it is likely that the $33,800 in excess funds in the inmate account were actually surcharges. However, instead of treating the balance as surcharges and transferring it to the commissary account to be used for the benefit of the inmates, it was transferred to the civil account.”

State Comptroller Thomas P. DiNapoli’s office suggested the legislature and sheriff should ensure commissary surcharges are used only for inmate welfare and rehabilitation and return the funds improperly transferred from the inmate account to the civil account. It also suggested the sheriff’s department should:

• Accurate monthly accountabilities are prepared and reviewed.

• All commissary surcharges in the inmate account are transferred to the commissary account.

• Departmental policies and procedures over the inmate and commissary accounts are established.

• Disbursements are made from the appropriate accounts.

In a response to the state, Chuck Nesbitt, Jr., chief administrative officer for Orleans County, thanked the comptroller for its time and effort, pointing out Orleans County officials requested a review during every audit entrance interview for the past five years.

“Since discovering problems with the sheriff’s accounts, the county has had at least two audit procedures done and a top to bottom review done by the Orleans County Treasurer’s staff,” he said. “County officials have been unable to find guidance or obtain any assistance from the New York State Comptroller on this matter until now.”

Nesbitt added to the current sheriff — Randall Bower — and his staff’s credit, they have been extremely diligent in identifying and addressing issues with the administration practices of the previous sheriff.