New York City politics are rife with corruption. The city’s School Construction Authority (SCA) violated the law and squandered an opportunity to earn the money city. The agency kept over $104 million sitting in an account with an absurdly low interest rate.
The SCA is responsible for the construction and maintenance of the city’s public schools. By allowing the money to effectively gather dust rather than investing it, they robbed N.Y.C. children of hundreds of thousands of dollars.
“By maintaining a significant amount of cash in a checking account, not only did the SCA fail to comply with the investment requirements of the Public Authorities Law, but also lost the opportunity to generate additional investment income on these funds,” reads a report by Comptroller Scott Stringer.
It’s not clear why the SCA didn’t do anything with the money. New York politics are fraught with problems.
According to the New York Post: “The interest rate during those years was an abysmal .05 percent and .13 percent respectively… If the SCA had invested just $60 million of the $104 million in one-year treasury bills, the fund would have made at least $334,542 more… Better yet, if $60 million had been invested in the city’s special treasury fund, the authority would have been at least $580,000 richer.”
The SCA failed to do what it needed to do. Agency officials deserve the public chastisements that they’ve received. Their only excuse for their behavior is that they didn’t expect to grow so rich so quickly.
“The growth of the OFA from fiscal year 2007 through 2013 was attributable to reimbursements for projects that the SCA performed for the Port Authority and Developer Agreements,” an SCA spokesman said.
No one is really surprised to see yet another N.Y.C. government agency accused of incompetence. The city is in the iron grip of liberals, and they’re running it to the ground. “We’re talking about a gold medal-winning corruption performance by New York,” said John Kaehny, executive director Reinvent Albany, an advocacy group. “It’s a pretty bleak moment for public governance.”
Punishing an entity for not investing may seem odd, but the SCA’s behavior was truly negligent. The funds were supposed to help the city’s children. Reasonable investments might have greatly increased the amount of money available.
“When the bureaucracy can’t get its house in order, taxpayers lose and our kids miss out on the facilities they deserve. The SCA’s bungling of financial records potentially cost the City millions. When we could’ve earned a significant return by investing tens of millions of dollars, the SCA knowingly left money on the table. That incompetence comes at the expense of our children,” said New York City Comptroller Scott M. Stringer.
“Hundreds of thousands of critical, additional dollars that could have been put toward supporting our schools, our kids, and facilities were ultimately lost. That’s unacceptable. The SCA must immediately implement controls that will allow for stronger oversight of public funds in the future.”
It’s not clear what will happen next. Management shake-ups at the SCA are expected but beyond that nothing else is known.
New York Governor Andrew Cuomo implemented a special commission to combat corruption in the state, but its efforts so far have been laughable.
“The Joint Commission on Public Ethics was established in 2011 and is controlled by genteel hacks appointed by Cuomo… It has never — not once — caught a pol with his hand in somebody else’s pocket.This should be astonishing…” the New York Post notes.
“More importantly, power in New York State is closely held. The most enduring cliché about New York politics is the notion of ‘three men in a room.’ Nearly every major decision, from setting the state budget on down, is made in private by the governor.”