Review finds no misuse of funds
Outside firm studied Albany’s lead service replacement program
ALBANY — An outside firm’s review of the city’s lead service replacement program found no issues beyond isolated incidents in which a former employee allegedly steered work toward a contractor.
The city released the report Tuesday in response to a Freedom of Information request.
The forensic review by Stone Bridge Business Partners was not an audit of the program, which is overseen by the city Water Department.
The city requested the review in August last year after a homeowner filed a notice of claim against the city, alleging that a city Water Department employee had claimed there was a leak in the homeowner’s water service line and then steered them toward a specific contractor to pay a deposit on work that was never done.
The Times Union is not naming the former city employee, who resigned in late July, because he has not been charged with a crime in connection with the lead service replacement program.
Mayor Kathy Sheehan’s Chief of Staff David Galin said that after discussing it with Stone Bridge, the city determined the forensic review was the first step. If the $16,000 review had uncovered any problems with the grant program, the city would have undertaken a full audit.
“By using this two-step process, we saved taxpayer dollars,” Galin said in an email.
Galin said he was not aware of any other claims filed against the city connected to the lead service replacement program other than ones that had already been made public.
The city’s lead service replacement program provides a reimbursement of up to $2,000 to replace lead water pipes that run from city water mains to homes. The grant only covers about half of the total cost of replacing the full length of the water line from the water meter to the water main.
The city has set aside $500,000 in American Rescue Plan funding to expand the program.
The firm’s review was meant to identify any suspicious or possibly fraudulent transactions or other possible misuse of program funds. The review noted that the former employee should not have had any crossover with the lead service replacement program.
As part of the review, analysts looked at the payments since the program began, including looking for any unusual payment amounts or duplications. The review also included testing a sample of the transactions in the program to ensure they were supported by documents.
“Any alleged issues involving property owners and the former AWD employee that we were made aware of appeared to be isolated to activity outside the scope of his assigned duties with the AWD,” the report found.