Introduction

In connection with an audit of the Queens Borough Public Library (the ‘QBPL’ or the ‘Library’) Auditors working for the Office of the Comptroller of the City of New York (the ‘Comptroller’s Office’) observed the absence of key financial controls and identified questionable expenditures and practices engaged in by the Library’s senior management that put the Library’s finances at risk of abuse. In light of the possibility of abuse, the Audit Bureau’s investigations staff was directed to look more closely at problem areas identified during the audit process.

In the course of their review, investigators preformed a thorough analysis of fiscal year 2012-2014 credit card purchases by the QBPL’s two most senior executives to determine whether their expenses and/or the Library’s treatment of them may have violated applicable federal, state, or local laws. As described in detail below, the investigation determined that the Library’s former Chief Executive Officer (CEO) and former Chief Operating Officer (COO), who is now serving as interim-CEO, used their OBPL credit cards for over $310,000 in prohibited expenses, including about $115,000 in purchases that appear to be taxable, undeclared income, in circumstances suggesting a significant likelihood of fraud and/or embezzlement. In addition, we found that the CEO’s records of time spent performing part-time consulting services for another public employer-the Elmont Union Free School District (‘Elmont’)-conflict with his QBPL work schedule, suggesting the possibility that either these records were not accurate or that he performed his outside consulting work on Library time. Finally, we found that the CEO made false statements in government filings by failing to disclose additional outside businesses and a federal tax lien on his VENDEX forms, a possible violation of law and noncompliance with the CEO’s employment contract with the QBPL. Accordingly, we have referred our investigatory findings to appropriate law enforcement entities and to the QBPL’s Board of Trustees.