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Saugerties Town Board faces scrutiny over improper credit card spending

by Crispin Kott
June 2, 2025
in Politics & Government
0

A report released last month by the state comptroller’s office found the Saugerties Town Board had improperly authorized numerous credit card purchases and failed to conduct adequate audits of financial claims. 

The audit, covering the period from January 1, 2021 to December 31, 2022, reviewed 50 claims totaling $2.1 million, and 50 credit card purchases totaling $28,815. Their review found that 15 purchases totaling $91,979 did not comply with the town’s own purchasing policy, with nearly half the total coming from a single $46,500 to a contractor without bid or documentation to clear debris for the highway department. 

Elsewhere, the comptroller’s office found that 36 credit card purchases totaling $10,868 weren’t properly authorized, including the use by an unauthorized individual of the town supervisor’s credit card without the knowledge of supervisor Fred Costello totaling $383, with the equipment purchased being shipped to the town’s former video supply contractor. 

“The supervisor and we were unable to verify if the town received this purchase due to lack of supporting documentation,” read the report. 

Also found in the review of credit card purchases was a lunch to celebrate an employee’s birthday paid for by town credit card by Costello. 

“This is not an appropriate use of taxpayer money,” the report surmised. 

The period in question included a total of 5,131 claims for $25.7 million, with 836 credit card charges totaling $328,629. 

The 50 claims earmarked by the audit were found to have been approved without ensuring that sufficient budget appropriations were available. 

“For example, in 2022, town officials paid $203,775 to replace the water department’s roof when there were no appropriations available in the budget,” read the report. “As a result, the accountant used a journal entry to borrow from the general town-outside-village fund to cover the water district’s capital project.” 

Electricity bills past due in 2022 were paid in the amount of $121,380, when the amount budgeted for that year was just $96,400. 

“The board continued to approve payments for electricity throughout the year without verification of sufficient appropriations,” the audit found. “As a result, town officials exceeded budgeted appropriations for electricity by at least $75,497.”

The audit also noted six claims totaling $14,320 were mathematically incorrect, including a $1,380 claim with duplicate charges for website design services resulting in a $690 overpayment to that vendor. 

Town board members were also shown to have used different methods to approve purchase requests by different departments, and that those department heads often provided council members with different types of documentation. 

“Overall, the board did not know how to conduct a proper claims audit or know that it was their responsibility to audit claims,” read the audit, and cited a lack of experience or training in auditing claims; some said they believed it was the bookkeeper and external accountant’s responsibility. “As a result, officials paid claims totaling $22,820 that lacked proper authorization and included duplicate charges. Without a thorough review of all claims to be paid, the board’s ability to effectively monitor town financial operations is diminished and errors and irregularities may occur and remain undetected and uncorrected.”

In an interview with Hudson Valley One last week, Costello said the comptroller’s report was a welcome opportunity for the town to improve how it operates. 

“We try to apply best practices within our capability, but an outside perspective is always helpful, Costello said. “We audit ourselves every year, but an outside perspective is going to offer a more critical look.” 

Costello said the report covered a period of transition in the bookkeeping department, which resulted in delays in finding some of the information requested by the comptroller’s office; since Diane Friedmann became the town treasurer, the department has become more streamlined. 

Regarding the $46,500 payment to a contractor to clear debris for the highway department, Costello said it was during a February 2022 ice storm, and in order to clear Old Stage Road to allow passage for utility crews to restore power, the emergency payment was authorized. 

“I understand why it didn’t comply with our policy, but given the same circumstances today, I would probably make the same decision,” Costello said. 

Costello also addressed the $383 credit card purchase without his knowledge, saying the former unnamed video supply contractor purchased malware software. 

“They needed to use the credit card so we trusted them and gave them the number,” Costello said. “Months later a charge came through, and I knew I didn’t make it and I’m trying to figure it out. Rather than dispose of the card number they kept it and used it again and that was certainly not my intention.”

Costello said the $45 credit card purchase he made to celebrate an employee’s birthday was to show appreciation for hard work. 

“When folks go above and beyond we don’t have a lot of opportunities to say thank you,” he said. “In that instance, we had done a lot of good work mostly related to our investment strategies and it was clear at that point we were gonna be successful for the year and I took her out for lunch, and it was 45 bucks. I don’t remember why I used that particular card that day, but it’s not uncommon for me to do that, not uncommon for me to buy food for town employees.”

Costello said in context, he’d “comfortably gifted thousands of dollars in food to the employees” in the past without issue. 

“I’m happy to do what I can to try to let employees know that we appreciate them,” he said. 

Costello said the report was an opportunity for the town to ensure they do a better job moving forward. 

“Now that they’ve pointed to these areas, we’ve already adopted a lot of changes that would capture many of the concerns they’ve already brought forward,” he said, adding that the town will change its purchasing policy to reflect rising costs across the board. 

“It’s pretty easy to spend $10,000 on an equipment repair or facility repair, and that doesn’t mean you’re putting on a new roof anymore,” he said. “That means that we’re fixing the boiler buying a transmission for a truck or car. We need to update that policy to be more effective of today’s costs and tighten it up with regards to the credit cards.” 

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Crispin Kott

Crispin Kott was born in Chicago, raised in New York and has called everywhere from San Francisco to Los Angeles to Atlanta home. A music historian and failed drummer, he’s written for numerous print and online publications and has shared with his son Ian and daughter Marguerite a love of reading, writing and record collecting.

 Crispin Kott is the co-author of the Rock and Roll Explorer Guide to New York City (Globe Pequot Press, June 2018), the Little Book of Rock and Roll Wisdom (Lyons Press, October 2018), and the Rock and Roll Explorer Guide to San Francisco and the Bay Area (Globe Pequot Press, May 2021).

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