4/03/2007

Good Night Mr. Peanut...It's Very Quiet On The Borderline.

at 4/03/2007 Posted by JPN

6 comments:

Anonymous said...
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April 04, 2007
Anonymous said...
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April 04, 2007
CANRAC said...

Who writes all this crap? Point being, chalk another up for public education in the St. Croix Valley.

April 04, 2007
Anonymous said...

Comments were deleted. Obviously these hideous comments were put on by a local blogger who needs to get a job and get out of the basement more.

April 04, 2007
Anonymous said...

A new study by the Cato Institute takes an in-depth look at allegations of corruption and abuse of assets in the nation's public schools, a system built upon the expectation of public accountability. The proper response to such mismanagement, the study's author says, may be found in providing parents with the opportunity to choose the schools that best meet their children's needs.

In Corruption in the Public Schools: The Market Is the Answer, published April 20, author Neal McCluskey (a contributing editor for School Reform News) tackled an issue that affects every American in one way or another: public school systems' efficiency and accountability.

It isn't that the government isn't interested in ferreting out corruption in the education system, McCluskey concludes--it's that the system itself has become so encumbered with rules and regulations that it is more difficult for teachers to educate kids, and much easier for criminals to get away with exploiting loopholes for their own financial gain.

"Regulations governing almost everything a school can do have failed to stop fraud, waste, and abuse but have rendered school districts cripplingly inefficient," he writes.


Disturbing Examples

Though McCluskey was careful to point out the corruption isn't universal, it is widespread. He examined hundreds of fraud allegations in his report, ranging from Floridians who misused scholarship money and school vouchers, to New Yorkers hiring at least 25 special-education bus drivers with criminal records, to a Maryland high school giving two A's and an NC (for noncredit) to a student who wasn't even enrolled there. Other reports included school officials embezzling money to buy cars and vacations.

Although per-student spending by public schools has nearly tripled in the past 40 years, students' test scores have continued to decline. While McCluskey admits many factors contributed to that trend, he says the bottom line is that public education is failing students, parents, and teachers alike. In reality, he says, public accountability is largely a myth.

"Public accountability requires that formal rules and regulations be instituted to make sure the people who run and work in the schools know what they can and cannot do and in addition, some sort of apparatus has to be erected to do the watching and enforce the rules and regulations," he explains. "And it's not like the rules and regulations remain static; people will always look for loopholes to commit malfeasance if they are so inclined, or to make their jobs easier.

"When people exploit those loopholes, it precipitates the creation of more rules and regulations to cover what the first rules and regulations missed, typically through standardization of procedures and systems. More bureaucrats are then needed to monitor the rules and execute school district functions," he continues. "Eventually, the maze of rules and regulations becomes so complicated that it's easy for those who'd do wrong to hide in it, while those who simply want to teach have to struggle mightily to get anything done."


Competition for All

The answer to that structural problem, McCluskey says, is found in models used by successful schools: choice.

When parents and students have choices, he notes, schools must prove themselves in order to maintain enrollments. Though private schools are not free of corruption, choice creates a built-in mechanism for weeding it out. It's called, "I'm taking my business elsewhere," McCluskey notes.

By definition, any school that must attract and keep a student body must make sure it is an effective instrument of education, McCluskey points out, or it will simply shrivel up and fade away, making way for other institutions that can rise to the occasion. School choice makes that happen.

"Choice would provide better accountability because parents would be able to exercise the ultimate sanction: They could pull their kids out of a school that's been ripping them off or doing a poor job of educating their children," McCluskey writes. "Not only would that provide swift justice, it would eliminate the need for cumbersome rules, regulations, and bureaucracies that keep our schools--especially our worst schools--from being able to change."

April 05, 2007
Anonymous said...

CONTACT: Press Office
(518) 474-4015 FOR RELEASE:
Immediately
March 2, 2005



Hevesi Audit Finds School Employees Used At Least $11.2 Million of Roslyn School Funds for Personal Benefit
Audit of Roslyn Schools Details Breakdown of Oversight and How Dozens Benefited with Cash, Cars, Travel, Personal Goods at Taxpayers’ Expense

After reviewing 57,000 checks dating back eight years and tens of thousands of computer records, State Comptroller’s Office auditors have identified $11.2 million that was used by school employees, their friends and families for personal benefit, according to an audit released today by New York State Comptroller Alan G. Hevesi. Some senior employees had the School District pay their personal credit card bills, which included more than $1 million in cash advances withdrawn from automatic teller machines, and pay for mortgages on luxury homes, personal automobiles and much more.

The audit identifies 26 individuals, in addition to the three already charged, who personally benefited from the misuse of School District funds. It details the monumental failures of the Roslyn School Board that was charged with monitoring school financial operations and of School District employees who were charged with handling District funds and reviewing and approving expenditures.

The audit findings and documentation have been referred to the office of Nassau County District Attorney Denis Dillon for a determination as to whether further criminal prosecutions may be appropriate.

“At least $11 million of public funds were spent to benefit individuals because those responsible for watching were not doing their jobs. Certain senior officials with the keys to the cash register went on a spending spree of massive proportions. That means Roslyn taxpayers paid more than they should have and Roslyn students and teachers were shortchanged. The trust that is essential for school districts to do their job has been shattered,” Hevesi said. “The education provided by the Roslyn School District was and remains impressive. The new leadership of the School District has pledged to implement our audit’s recommendations and to provide us with reports every three months on their progress. Those changes are critical to restoring public confidence in the Roslyn School District. Auditors will return in a year to conduct a follow-up audit to assure that the Board and superintendent have implemented management reforms recommended by this audit.”

Nassau County District Attorney Denis Dillon said, “I would like to thank State Comptroller Alan Hevesi for his office's hard work in conducting the audit of the Roslyn School District. The audit will be incorporated into our ongoing investigation, in which I fully intend to prosecute all involved in this scandal to the full extent of the law. Protecting the taxpayers of Nassau County has always been a top priority of mine. Crimes of this nature have many victims, which include the students and teachers of the Roslyn Union Free School District and the residents and taxpayers of the Roslyn community. If proven, the unscrupulous behavior of these defendants will be most swiftly and certainly punished.”

Nassau County Comptroller Howard Weitzman said, “The most important lesson of the Roslyn embezzlement scandal is that corruption festers when there is no light. One of the best ways to shine a light into school business practices is for school boards to establish audit committees made up of citizen volunteers, as we have done in Nassau County. These committees provide an additional layer of oversight that complements the work of the District’s outside auditors. In addition, we strongly recommend that Long Island school districts regularly conduct a competitive selection process for auditors. Comptroller Hevesi and I are working together to help local school officials combat theft by improving their districts’ financial controls and oversight.”

Senator Michael Balboni (R-East Williston) said, “It’s time to turn our anger into action. Comptroller Hevesi has pointed out the problem, District Attorney Dillon will prosecute those responsible for it, and Assemblyman DiNapoli and I will work to pass laws that will prevent it from ever happening again.”

Assemblyman Thomas DiNapoli (D-Great Neck) said, “Comptroller Hevesi’s audit has revealed the alarming depth of the financial abuses in Roslyn. This points out the essential need to enact the oversight legislation we developed with the Comptroller’s office to protect school district taxpayers and to prevent such abuses from occurring again.”

Assemblyman Charles Lavine (D-Glen Cove/Roslyn/Plainview) said, “Comptroller Hevesi has now exposed the full extent of the problem. Those who misused the public trust will be punished. The Comptroller has given us management reforms, the superintendent and Board have said they will adopt them, and we are changing laws in Albany to make sure this never happens again. We need to take the lessons from this tragedy and move forward. The Roslyn School District is and will continue to be the best because of its teachers, parents, children and the honest, hardworking community.”

Former School Superintendent Frank Tassone, former Assistant Superintendent for Business Pamela Gluckin, and former District Account Clerk Deborah Rigano (Gluckin’s niece), have already been charged by the Nassau DA with multiple felonies for their role in this scheme. Auditors found that, in total, Gluckin personally benefited by at least $4,634,012. Tassone’s personal gain was at least $2,407,965. Rigano’s personal gain was at least $334,452. A total of $1,580,274 was not traceable to a specific individual. Twenty-six other individuals, including other school officials and other relatives and friends of Tassone, Gluckin and Rigano, had a personal gain totaling $2,288,462.

The largest component of the losses involved payments totaling $5.9 million the District made for personal credit cards for Tassone, Gluckin, and Rigano and at least ten of their family members and friends. Gluckin and Tassone would not only charge purchases to their credit cards, but also withdraw cash advances using ATMs. Gluckin and Tassone withdrew at least $1 million between them, sometimes withdrawing cash on a nearly daily basis. Tassone’s highest monthly cash withdrawals totaled $34,620, and Gluckin’s highest monthly cash withdrawals totaled $35,500. Since the District paid all credit card charges including the cash advances, Tassone and Gluckin thus effectively received School District cash and were free to spend it as they wished.

Among the items purchased or paid for with the District’s resources:

Private mortgages and loans. $1,137,939 of District funds was used to make payments on private mortgages and loans for Gluckin, Tassone, Rigano and Gluckin’s family, including homes in Florida, West Hampton and Pennsylvania, as well as payments of $81,637 for a student loan.
Businesses established by District officials . Payments of $1,074,547 were made to businesses created by District officials, their family members or friends, where there is no record that the District received anything of value in return.
Unauthorized salaries and benefits. Excessive salary and benefit payments of more than $549,129 were made to selected District officials.
Purchases at Home Depot. Payments of $609,000 were made to Home Depot for a variety of goods that were not used in the District.
Purchases of computers and electronic equipment. Payments of $249,883 were made to purchase computers and other electronic equipment that was delivered to individuals and locations outside the District.
Financing of private automobiles. Payments of $206,798 were made to purchase or lease private automobiles, most for Tassone, Gluckin and her daughter, including for a BMW and a Jaguar. This was in addition to Tassone’s vehicle allowance of $8,000 a year, later increased to $17,200 a year.
Payments for personal insurance policies. Payments of $160,171 were made by the District for various personal life, homeowners, car and boat insurance policies for Gluckin, Tassone and their family members.
Payments for unauthorized travel. Payments of $133,619 were made for travel expenses that were not related to School District business or for individuals who were not District employees, including travel to Las Vegas, San Francisco, Manhattan, New Orleans, and Bermuda, as well as trips to London on the supersonic Concorde for Tassone.
Payments for Superintendent’s parking. Payments of $42,000 were made for Tassone’s parking in Manhattan.
Food. Payments of $549,120 were made for food unrelated to any District activity.
Miscellaneous. Various other unauthorized payments benefiting Tassone included dry cleaning, cable service, a fitness club, Christmas cards, and personal phone lines. Various unauthorized payments benefiting Gluckin included payments for water service to her home, a pool cleaner, and more. Payments benefiting Rigano included a Rolex watch, dry cleaning, and hair and nail salons.
Hevesi called the number of schemes to defraud the District “breathtaking.” In some instances, changes were made to District accounting records to conceal fraudulent payments to credit card companies and financial institutions. In other instances, the fraud was barely concealed.

Auditors determined that the misappropriation of District funds occurred because:

There was a complete breakdown of the District’s system of internal controls. Tassone and Gluckin could override the system and process payments outside the normal flow of transactions.
Two employees who should have identified the ongoing misappropriations, specifically the Internal Claims Auditor and the Treasurer, did not do their jobs to ensure that only appropriate and authorized payments were being made.
The Board failed in its responsibility for monitoring and overseeing the District’s financial activities. The Board did not routinely review Budget Status Reports that would have indicated improper and excessive spending. The Board also did not establish policies required by law or sound business practice regarding cash receipts and payments, travel, credit cards, bank account reconciliations and more.
The District’s independent auditor had conflicts of interest and performed work that was so flawed and so far below professional standards that it failed to identify the millions that were stolen. After the Comptroller’s Office released an audit of the independent auditor’s failed performance, the firm went out of business.
Auditors examined a voluminous amount of information to determine the total amount that was missing. They reviewed all available checks (57,000) and electronic records primarily for the period January 1, 1996 through June 14, 2004. While numerous records and documents were missing at the District, auditors did extensive testing of transactions by obtaining missing records and documents from original sources such as banks and other financial institutions and recreating a record of transactions from these documents, records available at the District and interviews of District staff. Auditors issued 17 subpoenas to 10 different financial institutions to obtain information for 54 credit card accounts, reviewed tens of thousands of vendor files, and reviewed and analyzed eight years of the District’s data and transactions. Auditors found that some school documents have disappeared so that a full tally of the missing money is impossible.

The audit makes 27 recommendations to correct weaknesses in the District’s system of internal controls, including:

Require the School Board to review Budget Status Reports at least quarterly at a public meeting.
Establish an Audit Committee to oversee audit work.
Require claims to be sufficiently detailed and audited prior to payment.
Limit computer system access as appropriate for an individual’s job functions.
Separate duties to reduce the possibility of fraud.
Since the initiation of the Comptroller’s audit, District officials have enhanced internal controls over several important aspects of their operations. For example, an external CPA firm has been hired to perform the Internal Claims Audit function, and the District has made significant changes to the procedures related to the Treasurer and Deputy Treasurer positions, requiring them to be present when checks are being printed. They also are now maintaining a listing of check numbers through the use of a log which is initialed by the Treasurer and Deputy after each check is printed.

“Now the most important task is to see this doesn’t happen again in Roslyn or anywhere else,” Hevesi said. “With organizations that represent the school community, we have developed a five-point plan that strengthens internal controls in schools, the first line of defense. Legislation implementing that plan is being introduced in both houses. We’ve also asked for funds so that the Comptroller’s Office can resume regular audits of all school districts around the State. In the meantime, we will continue our audits of Long Island schools, and we will come back to Roslyn to make sure our recommendations are fully implemented.”

SCANDAL AT ROSLYN:
Cost to Taxpayers at Least $11.2 Million


SCHOOL FUNDS USED FOR PERSONAL BENEFIT

Personal Credit Cards
$5,902,544

Private Mortgages and Loans
$1,137,939

Home Depot
$609,000

Food
$594,121

Salaries and Benefits
$576,586

Gluckin-owned Companies
$255,537

Computers and Electronic Equipment
$249,883

Private Automobiles
$206,798

Insurance Premiums
$160,171

Travel Expenses
$133,619

Other Personal Expenses
$112,983

APPARENT MISUSE OF DISTRICT FUNDS:

Related Party Consultants
$1,074,547

Postage and Shipping
$166,945

Other Questionable Expenditures
$64.492


TOTAL
$11,245,165

April 05, 2007

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