A yearlong investigation into record-keeping practices at the Edgartown wastewater treatment plant came to an end this week with the release of a sharply critical report from a special town attorney, who found a long list of deficiencies in management practices at the plant and in the way the elected members of the town wastewater commission conducted themselves.

At a joint meeting of the wastewater commission and town selectmen Tuesday morning, the wastewater commission voted swiftly to place plant superintendent Joseph Alosso on paid administrative leave. At a meeting on Feb. 7, they are expected to consider whether to follow the recommendation of special attorney John Paul Sullivan and fire him.

The 64-page report prepared by Mr. Sullivan, a retired judge and longtime seasonal resident of Edgartown, followed a fraud investigation by state and local police that began last year and concluded in December with criminal charges against an Edgartown septic hauler. Police investigators found that the record keeping at the plant was so poor that they were unable to conduct a meaningful investigation.

Mr. Sullivan’s report expanded on that finding.

“Failure to properly maintain records has cost Edgartown taxpayers perhaps many hundreds of thousands of dollars,” he wrote.

Specifically at issue are practices at the area of the town sewer plant used to treat waste pumped from individual septic systems.

Mr. Sullivan’s report details the so-called honor system used at the plant where septic haulers were allowed to dump their waste and record the amounts themselves with no formal oversight or system of checks, and the failure to keep receipts from an electronic deposit meter, a violation of the state records retention law. He found that some employees, including one wastewater commission had received services for free, a matter that has been turned over to the state ethics commission for separate review.

He also examined a forensic audit commissioned by the town that concluded at least $90,000 could not be accounted for due to poor record keeping.

“Alosso’s use of an honor system whereby the independent haulers who delivered septage to Edgartown’s septage receiving facility, were billed solely for the gallons that they themselves had written in the manual logs showed extremely poor judgment. His decision never to cross-check the figures the independent haulers had written on the manual logs with the figures from the electronic meter demonstrates poorer judgment still. But to use such an honor system when he knew that all the independent haulers were aware that their bills were based solely on the manual logs was to act with reckless disregard for the interests of Edgartown taxpayers,” Mr. Sullivan concluded.

The report provided a detailed examination of billing methods and operations at the plant from 2001 to present. In 2001, the plant received upgrades that would allow septage material delivered to the facility to be metered so haulers would be charged for exactly what they brought, instead of being charged by the load.

The facility installed an EleMech Electrical Control system metering machine, which haulers could use with a personal access code. The machine produced receipts that recorded how many gallons of material were deposited: a white receipt for the hauler, and a yellow receipt that remained in the meter, which was locked.

But the meter system was never used, Mr. Sullivan found. Waste haulers continued to log their drop-offs on manual paper logs, with different logs for each town where the hauler would record information including how many gallons were dropped off, the source of the septage, and the hauler’s name. The manual logs were the “sole basis for billing,” Mr. Sullivan found.

Until January 2011, Edgartown septage was charged at a lower rate than septage from other towns, making the manual logs necessary for billing. Mr. Sullivan said it was not clear whether haulers passed on the savings from the lower rate to Edgartown residents. “The gallons listed on the logs could have been cross-checked against the yellow receipts from the meter,” Mr. Sullivan wrote. “This was never done.”

He added that waste haulers would often make their deposits unsupervised, using automatic garage door openers to enter and exit the facilities.

“Simply put, Alosso instituted a system of billing that relied solely on information that the parties who were being billed had provided,” Mr. Sullivan wrote.

A January 2011 forensic audit conducted at the town’s request examined the plant’s billing and financial records from Jan. 1, 2010 through Sept. 30, 2010. The auditing company, Sullivan, Rogers & Company, could find only 15 days of receipts from that time period; 250 days’ worth of receipts were missing.

State law requires town departments to keep records for seven years. One of the reasons for the law, Mr. Sullivan said, is so periodic audits can be conducted.

The failure to keep the receipts also prevented a more thorough criminal investigation by police, Mr. Sullivan said. The criminal investigation that concluded in December resulted in charges against Jason Araujo, the owner of Jay’s Septic, for allegedly defrauding the town of about $26,000 by improperly recording deposits.

Due to the missing records, the forensic audit was expanded to include 68 days in 2009 where receipts were available. The report found that billing discrepancies during that time added up to a loss of $89,000.

Mr. Sullivan found that Mr. Alosso was well aware of the problems with the logs and billing system at the plant and had expressed concerns about them as early as 2009. “Despite Alosso’s expressed concern that some of the haulers were entering false or inadequate information in the logs, the billing system did not change,” Mr. Sullivan wrote.

Mr. Sullivan also said just hours after he learned of the criminal investigation by police last year, Mr. Alosso contacted EleMech about installing a new system, saying that the plant’s system was not used because of malfunctions. But Mr. Sullivan questioned sincerity of the plant manager, given the fact that company had no record of any maintenance or service calls from the Edgartown plant. “If Alosso had found problems with the unit, one might reasonably expect at least one complaint in ten years,” the report said. “There were none.”

The report continued:

“I infer that [Mr. Alosso] realized, as the audit was being conducted . . . that his billing method, which he knew to be deficient , would become public . . . all these steps demonstrate that he well understood the deficiencies of the system he had put in place . . . and, sadly, well knew how to correct them . . . his failure to meet standards . . . and his failure to properly maintain records has cost the Edgartown taxpayers perhaps many hundreds of thousands of dollars. Unfortunately, because he did not retain the required records, we will never know for certain what the actual figure is.”

Mr. Sullivan also singled out the wastewater commission for its conduct which he described as passive and uninvolved, in allowing the wastewater facility to become a “manager-dominated” institution.

“The commissioners were insufficiently attentive to their responsibilities . . . [they] only knew what the facilities manager wanted them to know,” Mr. Sullivan wrote. “It was their statutory responsibility to learn what was transpiring and not simply accept what the manager told them.”

Mr. Sullivan raised the possibility of changing the wastewater board from elected to appointed, but stop short of recommending this, noting “that is a decision for the voters and town officials.”

Reached on Wednesday this week, wastewater commission chairman Timothy Connelly had no comment about the report.

The complete report is posted on the Gazette Web site at mvgazette.com.