A close look at the financial operations at LTV, East Hampton Town’s public-access cable television provider, showed shortcomings in record keeping on purchases of equipment that would belong to the town should LTV cease to exist, Len Bernard, the town’s budget officer, reported Tuesday. LTV receives the lion’s share of its annual budget from the town, $712,000 last year.
The budget office spent the last few months conducting an “internal audit” of LTV, said Mr. Bernard in a report to the town board. Under a long-term contract that will expire next year, the town funnels 80 percent of the money it receives from Cablevision for operations in the town to LTV. In addition, the town provides $40,000 a year for equipment.
LTV tapes and airs meetings of town government bodies, including the town board and the planning, zoning, and architectural review boards, on channel 22, which also airs school and educational programs. It also provides an opportunity for community members to create and air programs on its other channel, 20.
The financial review, Mr. Bernard said, examined whether LTV spent its money from the town on providing public TV access, as required; on whether expenditures were properly approved and documented, and on whether the equipment bought with town funds was properly used and controlled.
Money is being properly spent at LTV, he reported, but the procurement process does not necessarily ensure that purchases are made at the best possible prices. At least, he said, there is no documentation to prove it.
One problem, Mr. Bernard said, is that LTV’s records do not distinguish which pieces of equipment were purchased with town money versus other funds. In addition, he said, while LTV requires employees to sign equipment out and back in, control over how and where it is used is lacking.
“Could LTV employees use equipment for their own business?” Supervisor Bill Wilkinson asked. “That’s something that needs to be looked at,” Mr. Bernard said. “At a minimum, you certainly can go back and determine which fixed assets were bought with town funds,” he told the town board.
In preparing a new contract with LTV next year, he said, those types of record keeping procedures should be specified.
Mr. Bernard suggested the organization should follow the purchasing procedures outlined in municipal law, which the town employs. That may be proper, Mr. Wilkinson said, but if so, then the town should hold other organizations for which it provides funding to the same standards.
Councilman Dominick Stanzione questioned the nature of the agreement with LTV, which guarantees an annual grant regardless of whether that much is needed.
Although LTV is regularly funded by the town, akin to a town department, he said, the arrangement is unlike the budgeting process for departments, wherein a department head tells the board how much money will be needed in a coming year and board members allocate that specific amount.
The town first contracted with LTV in 1999, when it was just getting off the ground, Councilman Pete Hammerle explained. Federal Communications Commission rules requiring cable companies to provide public access stations were in place, and Frazier Dougherty, an East Hampton resident, started LTV to fill that requirement. “Everybody wanted LTV to be hugely successful, and we agreed to dedicate the entire franchise fee,” Mr. Hammerle said.
That scenario could now be revisited as a new contract is prepared, board members suggested. Other towns do not allocate their franchise fees to public access providers, as East Hampton has, Mr. Wilkinson noted.
The budget office reviewed annual audits of LTV performed by an outside auditor, Mr. Bernard said. The overall revenue at LTV last year was $806,000, he said, including the town’s contribution. Fund-raising, and a grant from East Hampton Village, helped make up the difference.
LTV’s board of directors has ultimate control over expenditures, including salaries for seven employees, among them a director who makes $75,000 a year.