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Audit Responses - Press 2-Pager-final

Audit Responses - Press 2-Pager-final

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Published by: Zvnnyv1019 on Apr 28, 2010
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04/28/2010

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NYCEDC Response to Comptroller’s Audit
Audit Finding: $98,297,350 in Payments from the 42
nd
Street Project Not Returned to the City
Facts :
 NYCEDC is meant to – and of course legally permitted to - receive these amounts under our master contract with the City – a contract that the Comptroller’s Office has signed off on in each of the last 17 years. On an annual basis, NYCEDC returns to the City far more than the averageamounts the Comptroller’s Office improperly identified, helping to pay for vital services and keeptaxes down. In fact, during the same period examined by the Comptroller’s Office, NYCEDC hasremitted more than $400 million to the City.
 As they are received by NYCEDC, the funds are disclosed in NYCEDC’s Financial Plans that arereviewed by the City on a quarterly basis and are also disclosed in NYCEDC’s publicly-availableaudited financial statements, which, in addition to being supplied to the Comptroller’s Office every year, are also available on NYCEDC’s website.
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The payments NYCEDC has retained help to support NYCEDC’s mission of spurring economicactivity, creating jobs, and generating tax revenues.
Audit Finding: $10,682,600 Funding from Inactive Public Purpose Fund Accounts Not Returned to City
Fact :
NYCEDC cannot legally remit these funds to the City until a milestone set forth in an agreement between the City and State that has not yet occurred occurs. The contract was signed about twodecades ago, and NYCEDC is not permitted to break it.
Audit Finding: $16,533,843 from Sale of City Assets Not Remitted to the City Retained, i.e.: QueensFamily Courthouse $7,870,000, Bronx Charter School $496,843 and Canarsie Plaza $8,167,000
Facts :
The Comptroller’s Office examined 36 other similar land sales conducted in the same manner by NYCEDC on behalf of the City and found no issues with the process in those cases.
With respect to the three land sales cited, it is NYCEDC’s legal right to retain the funds under the plain terms of the master contract that the Comptroller’s Office has registered in each of the last 17  years. NYCEDC may retain amounts it receives from a variety of sources, including the sale of City-owned assets up to a cap. NYCEDC has never retained amounts in excess of that cap.
These sale proceeds are public; they are included in NYCEDC’s Financial Plans which are reviewed by the City on a quarterly basis and are also disclosed in NYCEDC’s publicly-available audited  financial statements.
Audit Recommendation: Provide for proper classification and enhance the transparency of its revenueamounts due to the City
Fact:
While NYCEDC will continue to work with the City to refine and enhance its existing  processes, it believes that these processes do generally classify its revenue amounts due to the City properly and are generally appropriately transparent.
Audit Finding: PILOT Revenue Calculation Not Verified Site 8 42
nd
Street Project
Fact :
The audit is simply incorrect. The plain language of the agreement is clear, and there have beenno underpayments from the tenant.
Audit Recommendation: Use the total funding balance of $10,079,415 as of June 30, 2008, from inactivePublic Purpose Funds #12, #13, #18, #28, #30 and #31 in accordance with the terms and provisions of therespective funding and trust agreements.
Fact :
NYCEDC has already spent more than 80% of that funding balance on appropriate economicdevelopment uses. NYCEDC will continue to work, as it has always done, with appropriate partnersto find further appropriate economic development uses for the balance of these funds.
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http://www.nycedc.com/AboutUs/FinStatementsPubReports/NYCEDC/Documents/Certified%20finanical%20audit.pdf 

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