Written by Joe Rizza Friday, 24 July 2009 00:00
According to the state comptroller’s audit report, the district did not seek a Request for Proposal or RFP when securing services of six professional contracts totaling $267,379, including a legal services firm that was paid $91,092 and five occupational and other therapeutic services firms that were paid $176,287. The purpose of obtaining bids is to encourage competition in the procurement of supplies, equipment and services, which are paid with tax dollars.
In a response letter to the Office of the State Comptroller, Franklin Square School Board President Joe Armocida states that the district created an RFP for professional services related to students with special needs in January 2008. Subsequently, the RFP has been issued prior to the annual reorganization meeting and the district assigns services after contacting three respondents to the RFP. The letter also stated the district would continue to issue RFPs for professional services as needed or required by law for accounting, auditing and legal services.
In addition, the audit states district officials made payments for purchases and public work contracts totaling $177,074 without publicly advertising for competitive bids and $23,607 without obtaining documented verbal and written quotes in accordance with district policy, according to the state comptroller’s audit report.
In his response, Armocida states the district did get multiple quotes but did not engage in competitive bidding. Armocida noted that the public works contracts referred to in the audit were obtained through county bids and met the requirements of the law, and the district has implemented procedures to confirm state and county contract pricing and vendors.
Also, the comptroller’s office said it tested 10 credit card claims packages totaling $24,897 as part of the audit and found that nine of the claim packages, totaling $18,445, were not supported with adequate documentation such as receipts supporting individual charges listed on the credit card statements or receipts that were not signed by the individual who made the purchase, according to the audit report.
In response, Armocida states that the credit cards referenced are gas cards used only by the transportation staff and Home Depot credit cards used to purchase materials in emergent situations. Armocida stated that missing signatures were the result of electronic gas purchases made at the pump. Armocida stated that the issue has been addressed and signatures are now required for all purchases.
The comptroller’s office also concluded that controls over the district’s check-signing process were not adequately designed and not operating effectively. According to the audit report, 20 checks totaling $293,282 were reviewed and all signed by the assistant superintendent for curriculum and instruction using an electronic signature. The audit report stated that the audit did not disclose any inconsistencies among the cancelled checks, claim vouchers and warrants. However, the report stated “unless the board of education provides adequate oversight over the check-signing process, the district does not have adequate assurance that district payments are made for legitimate district purposes and in the correct amount.”
In response, Armocida stated that the findings in this section of the audit were the most troubling since the district was assured by both its external and internal auditors that its procedure of having the assistant superintendent for curriculum and instruction sign checks would enhance procedures.
According to Armocida, based on the audit’s findings, the Franklin Square Board of Education would appoint a treasurer who is also a full-time employee to affix signatures to checks in the appropriate manner.
Furthermore, the comptroller said that an attorney, William Cullen, who did work for the district was classified as an employee when, in fact, he was an independent contractor. As an employee of the district, the attorney would be entitled to enroll in the Employee Retirement System (ERS) and receive pension credits while an independent contractor would not.
According to the comptroller’s audit report, during the 2006-2007 fiscal year, the district paid $23,000 to Cullen through its bi-weekly payroll and paid his law firm $57,495 from July 1, 2007 through February 29, 2008. The district paid the Cullen law firm $38,097 while he was paid $16,192 out of its payroll.
According to the comptroller’s office, although Cullen did not meet the comptroller’s criteria for employee status, he had been reported to ERS by the district since 1990 and had an agreement with the district in which he would receive a salary of $23,000 for the 2006-2007 fiscal year and $25,000 for the 2007-2008 fiscal year.
The Office of the State Comptroller has set guidelines for employees that include employees having their work hours and duties fixed by the employer and employees compensated by salary or wages and other benefits based on collective bargaining agreements or other employee agreements. Independent contractors are usually retained to do specialized or expert services, but are not supervised with respect to how those services are rendered, according to the state comptroller’s office.
According to the audit report, based on interviews conducted and review of agreements and payroll records, the attorney would determine his own work hours and was not required to submit timesheets, did not receive annual performance evaluations and was not required to attend any district training. The comptroller’s office determined that the attorney should not be considered an employee of the school district and should not be entitled to a public pension.
According to Armocida, the district resolved this matter by way of board action in May 2008 by accepting Cullen’s resignation. He was then reassigned as an independent contractor with all appropriate modifications made to his agreement with the district.
In May 2008, New York State Comptroller Tom DiNapoli announced that he revoked Cullen’s membership in the New York State and Local Retirement System.