State: former Hudson River-Black River Regulating District official mistakenly received retirement benefits

Published: Apr. 8, 2021 at 2:03 PM EDT
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WATERTOWN, N.Y. (WWNY) - “Concerning” and “troubling.” That’s how the state describes the findings of its investigation into a former official with the Hudson River-Black River Regulating District.

The New York State Inspector General says the district’s former chief financial officer, Richard Ferrara, received more than $50,000 in wrongful retirement benefits when he left in October 2019 – and took no action to address the mistaken payout.

Ferrara served as CFO at HRBRRD from April 2005 until his retirement in October 2019. The inspector general’s investigation found that for the first six months of his tenure, Ferrara was working as a temporary contractor via CFO for Hire, LLC before being hired as an employee in October 2005.

The dates are important from a benefit perspective because employees hired prior to July 2005 are entitled to a payout of up to 100 days of unused sick leave upon retirement and do not have to contribute toward their health care insurance premiums during retirement.

Employees hired after July 2005 are not entitled to such a payout and must contribute 10 percent toward their health care insurance premiums during retirement.

The state says Ferrara was ineligible to receive certain retirement benefits. However, the inspector general found that Ferrara was mistakenly paid $51,082.58 in October 2019 for his sick leave accruals.

The state says Ferrara should have been aware that his payout was not permitted and did not notify HRBRRD of the error or return the money. Ferrara also declined to cooperate with the inspector general’s investigation.

“The former CFO’s actions in failing to acknowledge the wrongful payout, compounded by deficient checks and balances within the District, are troubling,” said Inspector General Tagliafierro in a prepared statement. “Our investigation found that a series of missteps led to this payout and outlined recommendations to ensure the District can continue its mission while adhering to fiscally responsible practices.”

The IG found the payout was calculated in error by an HRBRRD senior administrative assistant under the mistaken belief that Ferrara had been an actual employee – and not a contractor – in April 2005.

The miscalculated benefits were reviewed and approved by the HRBRRD’s executive director, the incoming CFO, and the board of directors.

“This lack of diligence by the Board in questioning Ferrara’s payout is concerning given that Ferrara had repeatedly petitioned the Board — most recently in June and October 2018 — seeking this revision and was repeatedly denied the payout of the value of his sick leave accruals and health care insurance coverage at no cost,” the report states.

The state said no one identified the mistaken payout, which was compounded by inaccurate personnel records, poor internal controls, and the recent hiring of staff who were unfamiliar with Ferrara’s prior work history.

The state also said HRBRRD erred when it allowed Ferrara to receive health care insurance without requiring him

to pay any portion of his premiums.

The IG made a number of recommendations which the HRBRRD accepted. The recommendations include taking action to recoup the money that Ferrara mistakenly received.

7 News was unable to reach Ferrara for comment.

The HRBRRD maintains reservoirs and regulates water flow in two watersheds in the Adirondacks: the Upper Hudson River, and the 125-mile Black River that empties into Lake Ontario.

See the inspector general’s full report here

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