Suffolk hacking fallout: County owes contractors $140m

0

Suffolk County owes outside contractors nearly $140 million after missing payments for more than a month, causing financial strain on “vendors at all levels” as the county grapples with a malware attack on its computer systems, it said County Comptroller John M. Kennedy Jr.

At a meet-the-candidates forum in Holbrook Wednesday night, Kennedy said he had been conducting handwriting checks since the Sept. 8 cyberattack and the subsequent shutdown of county systems, including the financial management apparatus.

Kennedy, who estimated the county spent $1 million investigating the hack, said Suffolk makes $15 million to $20 million in supplier payments every Monday during so-called operational runs.

The county has missed payments for five such weekly cycles since the shutdown.

WHAT TO KNOW

  • Suffolk County owes outside contractors nearly $140 million after missing payments for more than a month due to a malware attack on computer systems.
  • Offerer “Start calling because they can’t do payroll,” Comptroller John Kennedy said.
  • Suffolk usually does $15 to $20 million in seller payments every Monday, but has missed payments for five such weekly cycles.

“Salespeople at all levels are starting to call because they can’t do payroll,” Kennedy said.

David Mahler says he has been a county provider for 35 years and has contracted for services ranging from technology equipment to marine products.

Mahler said he had long viewed county funds as “money in the bank.”

He said he is expecting payments of $85,000, including about $50,000 for PVC pipe for a County Department of Public Works dredging project in Riverhead, for which Mahler’s firm supplied materials in June.

Mahler told Newsday he sold stock to raise money for the company and put expenses on a credit card.

“It was a few weeks of sleepless nights,” Mahler said. “It’s not just worrying about paying bills. It’s all I owe [for products] I already paid.”

An unidentified group has claimed responsibility for the cyberattack in a post on the “dark web,” an anonymized part of the internet where criminal activity can take place.

The group has released copies of some county documents and says they want a “small reward” for uncovering vulnerabilities in Suffolk’s computer systems.

County officials have not said whether the group asked for a specific ransom.

Suffolk Borough officials say they have begun restoring some services, such as 911 and property title searches, but have not given a timeline for when all borough systems will be operational.

District spokeswoman Nicole Russo said the auditors’ office has processed more than $40 million in payments to district vendors since the hack.

“We expect he will continue to prioritize important payments as the county works to strengthen our financial management systems to ensure the safe transfer of funds,” Russo said in a statement to Newsday.

Kennedy has said he would prioritize payments to nonprofit social services, which often operate on tight margins.

Some owners of for-profit companies indicated that they offer similar services.

Fahad Khan, whose family owns and operates The Learning Cottage Daycare at Huntington Station, said Suffolk County owes the company an estimated $33,000.

Khan said more than half of the center’s 20 students receive subsidies through a county social services program for low-income families, which reimburses Learning Cottage for the childcare it provides.

Khan said the company didn’t receive any payment for August or September, leading to a liquidity crisis.

The store opened just 10 months ago, and Khan expressed concern that without the county reimbursement, the company will not be able to obtain a line of credit to continue.

“We’re continuing our service, but I honestly don’t know how much longer,” Khan told Newsday. “If I don’t get paid for these kids, I might have to literally remove them from the program.”

Edward Attard, who owns three locations of The Learning Experience child care center in Ronkonkoma, Plainview and Massapequa, faces the same problem.

Attard, who also hosts Nassau County DSS students, said the county’s funds are usually deposited like “clockwork.”

But he estimates that Suffolk owes him about $135,000 for August alone.

“We depend on county revenue to pay our staff,” Attard told Newsday. “If this keeps up, I guess there’s still something I need to find out.”

Kennedy, a Republican seeking re-election in November, said the district is “serving our most urgent needs.”

But he added, “I would be lying to you if I didn’t tell you we have a crisis that’s growing every day,” that the county isn’t paying what it owes.

Share.

About Author

Comments are closed.