US News

MIKE: HOW SLUSH CASH SLIPPED BY

Mayor Bloomberg said yesterday that his budgetary watchdogs did not catch wind of a secret City Council fund because no money was ever actually paid to the phony entities set up as part of the scam.

“We vet every organization before we send out checks. In these cases, checks were never sent out,” Bloomberg said, explaining why the Office of Management and Budget failed to spot a longstanding practice exposed by The Post last week.

Noting that the list of projects or organizations “that receives money is negotiated by the City Council,” the mayor spoke for the first time about why his office was in the dark about the slush fund – the existence of which imperils Council Speaker Christine Quinn’s mayoral aspirations.

But left unanswered was why, in six years in City Hall, Bloomberg’s watchdogs never questioned why some groups were repeatedly allocated funds that went undelivered.

Quinn admitted last week that she learned last year that some of her staff had stashed away millions of budget dollars to fund certain projects without public processing.

In 2007, 24 percent of $3.7 million in such set-aside slush funds went to organizations in Quinn’s Manhattan district.

She said she ordered the practice stopped, only to learn in recent months that not only had it continued but that phantom groups had been created as a way to hide the money.

Two Quinn staffers resigned in the wake of her discovery of the phantom organizations, which are now being probed by the city Department of Investigation and the US Attorney’s Office.

David Weprin, chairman of the council’s Finance Committee, said he didn’t know about the practice until last week and suggested that it sailed under the radar for years because the amount of money involved was such a minute part of the $59 billion annual budget.

“There were a lot of people involved in the process that didn’t know, including the mayor,” the Queens Democrat said. “This is not a situation where money was stolen.”

frankie.edozien@nypost.com