West Haven Mayor Nancy Rossi voted against a move that would increase state control over the city's finances.

A team of auditors is set to review tens of thousands of dollars in overtime-related pay that went to several West Haven officials over the past year as part of an ongoing investigation into the city’s finances. 

The state Office of Policy and Management sent a letter to West Haven Mayor Nancy Rossi on Oct. 6, asking her administration to explain why a handful of employees were able to boost their annual income by issuing payments out of the roughly $1.1 million in federal CARES Act funding the city received last year. 

That federal funding is already at the center of a financial scandal after federal criminal charges were filed against two city employees over the past month. Federal authorities arrested Michael DiMassa, a former state Democratic lawmaker and West Haven city employee, on Oct. 20, and on Thursday, the FBI charged John Bernardo, who reportedly worked as a housing specialist in West Haven.

Both men are accused of funneling more than $636,000 in federal aid to an alleged shell company they set up earlier this year.

OPM’s audit of West Haven’s finances is expected to look all of the city’s CARES Act expenditures over the past year, but the state is already homing in on the extra money that was sent to several high-ranking officials in the West Haven government.

The city recently provided information to the state that showed more than $80,000 in CARES Act funding was used to pay administrative officials in West Haven for hundreds of overtime hours they reportedly worked during the pandemic.

Some of that cash also went to DiMassa and Bernardo, according to records obtained by the CT Mirror.

DiMassa, 30, told the Mirror in early September that he received more than $14,000 for overtime pay out of the federal funding, but he claimed all of those payments were legal.

“Do you think I would sacrifice my reputation for $14,000?” he asked at the time.

State Rep. Michael DiMassa leaves federal court in New Haven on Oct. 20, 2021.

DiMassa and his attorney, John Gulash, did not return phone calls and emails seeking comment for this story. Bernardo has not returned numerous voicemails left on his cell phone over the course of more than a month.

But they aren’t the only city officials who collected extra compensation from the federal funding.

Financial records obtained by the CT Mirror show that a handful of people appointed by Rossi also received checks from the city’s CARES Act fund. That includes Louis Esposito, Rossi’s executive assistant; Thomas McCarthy, the public works director; Beth Sabo, the director of human resources; and Lee Tiernan, the city’s top attorney. Similar checks were also sent to Maureen Lillis, West Haven’s health director, and Mark Bisaccia, who works in the city’s community development administration.

Most of those West Haven employees did not respond to emails sent to them this week. Tiernan, who has served as the city’s corporation counsel, said he followed the city’s policies when he claimed hundreds of hours of compensation time during the pandemic.

Several West Haven residents have complained for months about that overtime-related pay, especially the checks that went to Rossi’s appointees. In response, several people tried to request information about those payments through the state’s Freedom of Information Act, but those requests went unanswered throughout the summer and early fall as Rossi ran for reelection.

There are circumstances under the CARES Act where cities and towns can use the federal relief money to cover extra payroll costs for municipal employees. But the federal rules say those workers need to be “substantially dedicated” to “mitigating or responding” to the pandemic.

As a result, OPM demanded that Rossi and her team to provide documentation showing that each person who received the federal money actually worked the hours they claimed. The state also wants the city to show how that work was tied to the pandemic.

OPM officials informed Rossi in early October that her administration would need to provide auditors with any policies that dictate how and when city employees can claim overtime and compensation time, which is frequently used as extra vacation days. 

Martin Heft, an undersecretary at OPM, said the auditors would also need to understand how appointed officials in West Haven track their compensation time and when those hours can be traded in for additional pay.

The CT Mirror asked Rossi for the same city policies last week. The mayor responded by producing a 2017 letter that was written by Sabo, who has served as the city’s commissioner of human resources for several years.

In that letter, Sabo explained that West Haven allows appointed officials to keep their own records of how many hours they work. And as long as those hours are written down somewhere privately, the salaried employees can cash out any extra time for additional compensation. 

“It has always been that some appointed employees have documented their compensatory time for accountability and some elect not to record any. Each appointed official, if documenting, has always kept the records themselves,” Sabo explained. 

Beth Sabo, West Haven’s commissioner of human resources, claimed in 2017 letter that appointed officials in the city could keep track of the extra hours they worked in their own records and have that compensation time paid out by the city.

The only check on that private payroll information, according to the letter, is a final approval by West Haven’s “Chief Elected Official.” 

Members of the state Municipal Accountability Review Board, which has overseen West Haven’s finances for several years now, have already voiced skepticism about the city’s financial oversight this week.  

At a meeting on Wednesday, members of that state review board questioned whether West Haven’s lax accounting practices contributed to DiMassa allegedly stealing more than half of the city’s CARES Act funding. And they debated whether the state needed to intervene more forcefully in West Haven’s finances. 

Stephen Falcigno, one of the MARB board members, said he was frustrated by how long it has taken West Haven to make basic improvements to its finance department. Many of the problems experienced by the city, he added, can be traced back to a lack of basic financial controls.  

“This is where all these problems stem from. They stem from the basic issues we’ve been talking about for the last two years,” he said. “It is getting a little tiresome.”  

In September, Rossi told the CT Mirror she was uncertain who signed off on the extra hours that her employees charged to the CARES Act fund. “I would have to check because I don’t get comp time,” Rossi said at the time.

But last week, she changed that answer. She defended the extra money her appointees received and said she personally signed off on all of the extra hours they recorded during the coronavirus pandemic. 

“During COVID, I have approved comp time for my appointed officials, Louis Esposito, Beth Sabo, Lee Tiernan and Tom McCarthy,” Rossi explained via email. “They all were here during the COVID pandemic, as was I.  Myself and all of my appointed officials, mentioned above, were working many extra hours, sometimes double their weekly 35 hours to keep our employees safe and the residents safe.” 

Those individuals, Rossi said, could not take time off during the pandemic, and as a result, they were paid for their extra hours. She also said some of the extra time her staff put in was spent working at a local food bank. 

It’s unclear at this point whether West Haven’s policies for documenting its overtime costs will meet the federal regulations under the CARES Act. That’s up to OPM and its auditors from CohnReznick to sort out.

The results of that audit could take several months to complete, according to OPM officials. But that hasn’t stopped Rossi’s political opponents from seizing on the federal money that went to her inner circle. 

Barry Cohen, the Republican candidate for mayor, said it was “unacceptable” and “outrageous” for officials in West Haven to keep their own payroll records. And he questioned whether those officials could prove how much extra time they put in during the pandemic. 

“Where’s the logs? Where’s the documentation?” Cohen asked.

The Mirror submitted requests for that type of information in early September, but West Haven officials have yet to publicly release the records. 

Andrew joined CT Mirror as an investigative reporter in July 2021. Prior to moving to Connecticut, Andrew was a reporter at newspapers in North Dakota, West Virginia and most recently South Carolina. He’s covered business, utilities, environmental issues, the opioid crisis, local government and two state legislatures. Do you have a story tip? Reach Andrew at 843-592-9958