ALBANY—It’s not every day that one state entity condemns another for lack of transparency and oversight.

That’s what happened on Thursday, when the state Authorities Budget Office, an independent agency with subpoena power, released a report finding that the Environmental Facilities Corporation, an ostensibly independent board, rubber-stamped a Cuomo administration plan to divert clean water funds to help pay for the multi-billion Tappan Zee bridge replacement project.

But the administration and the environmental corporation quickly dismissed the accuracy of the report, while Albany watchdogs said its findings—that yet another would-be independent entity is instead acting as an extension of the Cuomo administration—was an unsurprising confirmation of the grim facts of life in the capital.

“We seem to have arrived at a point where anybody who knows how Albany works these days would be the least bit surprised by the new things in this,” said E.J. McMahon, president of the fiscally conservative Empire Center for Public Policy. “What’s the point of even having a board?”

The Authorities Budget Office, an independent agency with subpoena power, announced Thursday that it had conducted an investigation and concluded that the Environmental Facilities Corporation gave little thought or consideration to a plan to divert $511 million from the Clean Water State Revolving Fund. The board actively planned for the loan for almost a year, keeping it obscured from public view until a few days before the E.F.C. was due to vote, the investigation found.

The report also found that the E.F.C. board had secret meetings on the controversial Tappan Zee that improperly excluded the public loan plan since August 2013. That’s in spite of E.F.C. board member and Department of Environmental Conservation commissioner Joe Martens’ public claims that they had to approve the plan less than two weeks after it was revealed only because the federal fiscal year was ending. “Board members had little to no interaction with each other on the loan proposal during this nine month period, did not receive any project status reports or financial updates from staff during this time, and as a matter of practice approved loans for all eligible projects with little discussion,” the report found.

In reality, state officials were actively planning for the clean water loan funds even as they kept the plan from public scrutiny. In December, the state Thruway Authority told bond investors part of the bridge funding would come from “a below-market financing program managed by a state public-benefit corporation,” according to a state bond disclosure report.

Martens took umbrage with the A.B.O. report’s claim that the E.F.C. board asked few questions about the highly unusual loan and that it did not explore whether the arrangement was proper even after the federal Environmental Protection Agency told the administration it would be rejected.

“The ABO’s investigation utterly failed to demonstrate that the board lacked knowledge about any material aspects of the loan,” Martens wrote in a statement. “In light of these undisputed facts, the ABO’s attempt to insinuate that the EFC Board acted improperly simply does not hold up.”

An E.F.C. official also dismissed the report’s findings.

“The ABO’s report correctly determined that the EFC Board of Directors acted appropriately and discharged its fiduciary responsibilities by protecting the assets of New York’s Clean Water State Revolving Fund,” E.F.C. spokesman Jon Sorensen said in a statement. “Aside from that important finding, the ABO report is filled with inaccuracies and omissions.”

For former Democratic assemblyman Richard Brodsky, who helped create the Authorities Budget Office, Thursday’s report raises questions about other state authorities, including the Metropolitan Transportation Authority and the state Thruway Authority, and whether board members at other entities are living up to their statutory obligation to act in the interests of their organizations, rather than the governor’s office.

“Doing what you think is right, and not what you’re told, is really important,” Brodsky said. “Board members have an obligation.”

© 2014 Capital New York