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QUEENSBURY — A bookkeeping issue has caused the loss of crucial federal funding for the restructured Lake Champlain Lake George Regional Planning Board.

Funding through a U.S. Economic Development Administration program has at least temporarily been discontinued, Regional Planning Board staff said Thursday. The annual grant provides $71,000 a year in funding to help keep the Lake George-based organization operating.

But the agency’s former auditor failed to turn in an audit report for 2017, and that report was required for continuation of the funding, said David O’Brien, the Hampton town supervisor who serves as the Regional Planning Board’s chairman.

“We haven’t been able to get an answer on when we can get reconsidered,” O’Brien said. “This is a bad thing if it doesn’t get re-approved.”

The Regional Planning Board was completely restructured last year when major financial issues were discovered, both in its business loan funds and its procedures. The longtime executive director retired and a state audit is ongoing as a new administration tries to resolve financial issues they found.

The agency’s members got an otherwise good financial report Thursday about that re-organization and an improvement in financial footing. But O’Brien said the loss of the federal grant money would require some significant changes if it is not reversed.

O’Brien said the problem was “entirely caused” by Marvin & Co., which contracted with the Regional Planning Board for years to do its annual audits, but did not complete its work for 2017 as required.

The company, which has offices in Queensbury and Latham, was the auditor at the time, but the Regional Planning Board has since cut ties with the company. A phone message left Friday morning for the auditor who handled the account was not returned.

A representative of the EDA regional office said the EDA itself was not withholding funding for a compliance issue, but that another funding source the Regional Planning Board uses may be responsible for withholding the money.

The loss of funding was the only negative issue discussed Thursday as board members looked back at progress over the past year, when concerns about the Regional Planning Board were first aired publicly.

Washington County Treasurer Al Nolette, who has served as the board’s bookkeeper since the shakeup last year, said the board’s operating fund is up nearly 30 percent, and an equity deficit that was documented at the end of 2017 was now over $200,000 improved, so the organization’s equity is in the black.

“Financially, we are in much better shape than we were a year ago,” Nolette said. “I still am concerned because it turned around so quickly. It makes me wonder what was going on before.”

O’Brien said the board has not heard from the state Comptroller’s Office about its ongoing audit. A spokesman for the Comptroller’s Office said Friday that the audit was ongoing, and it was scheduled to wrap up by the fall.

The board has also filed lawsuits to recoup past due loans, which board member Ron Jackson, the Essex town supervisor, said “weren’t pursued before now.”

The Regional Planning Board, which assists communities and organizations in Warren, Washington, Essex, Hamilton and Clinton counties with planning, grants and economic development, oversees its own regional development corporation that has federally funded loan funds for high-risk businesses.

It was questioned about those loans, including losses they incurred and the relationships that those who borrowed money from the funds had with leaders of the board, which led to a review and the shakeup.

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reporter - crimes & courts, public safety and Warren County government

Don Lehman covers crime, Warren County government and the outdoors for The Post-Star. His work can be found on Twitter @PS_CrimeCourts and on poststar.com/app/blogs.

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