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Power Authority spending criticized State audit points to $340,000 for parties and other nonbusiness items

The New York Power Authority spent approximately $340,000 on such things as holiday parties and AARP memberships for retirees "during difficult fiscal times for New York State," a new state audit says,

Comptroller Thomas P. DiNapoli's report finds the vast majority of the authority's expenditures were "business-related and generally reasonable and necessary."

But it also pointed to "questionable discretionary expenditures," including:

* $160,000 on 21 holiday parties and picnics for employees, retirees and guests, including $9,100 and $9,500 for food at two successive holiday parties.

* $46,000 and $39,000, respectively, on gifts for employee service and recognition. In addition, the authority spent at least $57,000 on service award or recognition ceremony expenses, mostly on food and beverages.

* $21,000 for complimentary AARP memberships for all retired employees.

* $10,000 for "empathetic" gifts, such as flowers, to employees and relatives; and $7,000 in entrance fees and other expenses for staff participation in the Corporate Challenge road race.

As a result, the Office of the Comptroller recommended the authority "limit or eliminate spending on nonessential items such as parties, ceremonies, gifts and memberships."

The audit arrives just as CEO Richard Kessel announced he will resign Sept. 6 in a move thought to be part of the transition stemming from the new administration of Gov. Andrew M. Cuomo. The Inspector General's Office had previously started an investigation of the authority's donations to politically connected organizations under Kessel's watch.

In response, authority Chairman Michael J. Townsend defended spending practices, according to the comptroller, calling the questioned expenses minor and helpful in boosting employee morale.

He also cited significant reductions in expenses already initiated by the authority, including cutting the cost of the annual service award and employee recognition programs by 62 percent in 2010, cutting travel costs for award programs and reducing the cost of the annual holiday party by 27 percent in 2010.

"However, while reducing costs, management will seek to retain the benefits inherent in such programs," Townsend said, "including employee retention in the highly competitive and skilled utility industry."

The Comptroller's Office also said the authority has agreed to discontinue empathetic gifts and AARP memberships not covered by contractual commitments and will cut back on service and recognition awards and ceremonies, picnics and holiday parties.


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