Dive Brief:
- Rhode Island Resource Recovery Corporation will receive $2.86 million in a lawsuit against Restivo Monacelli, the Providence accounting firm that the state agency hired to audit its books. The jury award, valued at $6 million including interest, represents a portion of the estimated $75 in lost or squandered public dollars uncovered in a 2009 audit.
- The award included $2,551,052 in damages for investment losses the state partially attributed to auditing lapses, which Rhode Island Resource Recovery believed made the accounting firm partially responsible for years of corruption, poor management, and shady land deals.
- Providence Journal reported that Restivo Monacelli will likely appeal the decision. A hearing is scheduled for Nov. 19 on post-trial motions.
Dive Insight:
The verdict is a landmark one, in that the agency’s multiple previous attempts to recover lost funds ended in settlements, including in a suit against accounting firm Lefkowitz, Garfinkel, Champi & DeRienzo; one against Van Liew Trust Co., the investment manager for the Central Landfill Remediation Trust Fund; and Recovermat.
"As the Administration’s representative on the RIRRC’s Board, I am pleased with the jury determination. The case represents the closing chapter of the Resource Recovery Corporation’s continuing efforts to rectify past issues so it can meet its present and future challenges," said Department of Administration Director Michael DiBiase.
Edmund A. Restivo, managing partner of Restivo Monacelli stated: "We did the audit according to generally accepted accounting principles ... We weren't hired to uncover fraud and illegal activities. That's not the nature of an audit. We reported on the financial statements as a whole."
